CLA RR:TC:TE 959436 CAB
Tompkins & Davidson
One Astor Plaza
1515 Broadway
43rd Floor
New York, NY 10036-8901
RE: Country of origin of a hat; Section 102.21(c)(4), Customs
Regulations
Dear Sirs:
This is in response to your inquiry of July 2, 1996,
requesting a country of origin determination for hats pursuant to
Section 102.21, Customs Regulations. This request is on behalf
of Laura Ashley, Inc. Samples were submitted for examination.
FACTS:
The merchandise at issue consists of two styles of women's
hats. Each style is constructed of rabbit fur felt and features
a velvet band covering approximately two-thirds of the height of
the hat crown.
The manufacturing process for the subject hats is as
follows: In Country A felt fabric for each hat is formed in the
shape of a circle and is dried resulting in a conical shape. In
Country B 100 percent cotton velvet material is woven. The felt
is then sent to Country C where it is blocked to shape by the use
of heat and pressure, as well as water and chemicals and
stretching on a special mold. The cotton velvet fabric is also
sent to Country C where it is cut into strips and sewn to the
circumference of the crown. In addition, the edge of the brim is
folded over and sewn to finish it. Also in Country C, a "Country
C" origin hat band is sewn to the inside of the hat and trim may
also be attached to the hats by glue and/or wire.
Countries "A", "B" and "C" are used herein to denote,
respectively, two different foreign countries, territories or
insular possessions. Such "countries" will not include Israel or
a signatory of the NAFTA.
ISSUE:
What is the country of origin of the subject merchandise?
LAW AND ANALYSIS:
Pursuant to the Uruguay Round Agreements Act, new rules of
origin were effective on textile products entered, or withdrawn
from warehouse, for consumption on or after July 1, 1996. These
rules were published in the Federal Register, 60 Fed. Reg. 46188
(September 5, 1995). Section 102.21, Customs Regulations (19 CFR
Section 102.21), sets forth the general rules to determine
country of origin. Thus, the country of origin of a textile
product is determined by a hierarchy of rules set forth in
paragraphs (c)(1) through (c)(5) of Section 102.21.
Section 102.21(c)(1) sets forth the general rule for
determining the country of origin of a textile or apparel product
in which the good is wholly obtained or produced in a single
country, territory, or insular possession. As the subject
merchandise is not wholly obtained or produced in a single
country, territory, or insular possession, Section 102.21(c)(1)
is inapplicable.
Section 102.21(c)(2) provides for instances where the
country of origin of a textile or apparel product cannot be
determined under paragraph (c)(1) of this section. Section
102.21(c)(2) states:
Where the country of origin of a textile or apparel
product cannot be determined under paragraph (c)(1) of
this section, the country of origin of the good is the
single country, territory, or insular possession in
which each foreign material
incorporated in that good underwent an applicable
change in tariff classification, and/or met any other
requirement, specified for the good in paragraph (e) of
this section.
Section 102.21(e) states "The following rules shall apply
for purposes of determining the country of origin of a textile or
apparel product under paragraph (c)(2) of this section:"
6503 (1) If the good consists of two or more
components, a change to heading 6503 from any
other heading, provided that the change is the
result of the good being wholly assembled in a
single country, territory, or insular possession.
(2) If the good does not consist of two or more
components, a change to heading 6503 from any
other heading, except from heading 5602, and
provided that the change is the result of a
fabric-making process.
In this instance, the subject hats are comprised of felt
material shaped into a conical shape and a velvet strip of
material sewn to the circumference of the felt. You contend that
the velvet and the cone shaped felt form two components, and
therefore, the first tariff shift rule of Section 102.21(e)
pertaining to Heading 6503 of the Harmonized Tariff Schedule of
the United States Annotated (HTSUSA) is applicable. It is
Customs opinion, however, that the velvet strip is not a
component of the finished hat. Instead, the velvet strip is an
embellishment added to what amounts to a "hat".
The velvet strip is a minor embellishment that would not
confer country of origin. Section 102.13 sets out the De Minimis
rule and is applicable to the velvet strip embellishment.
Section 102.21(c), "General Rules", inter alia, state the
requirements or conditions of Sections 102.12 through 102.19,
where appropriate, are applicable when determining origin under
Section 102.21(c)(1) through (5).
Section 102.13 "De Minimus", states the following, in
pertinent part:
(c) Foreign components or materials that do not
undergo the applicable change in tariff
classification set out in Section 102.21 or
satisfy the other applicable requirements of that
section when incorporated into a textile or
apparel product covered by that Section shall be
disregarded in determining the country of origin
of the good if the total weight of those
components or materials is not more than 7 percent
of the total weight of the good.
We believe the weight of the velvet strip is not more than 7
percent of the total weight of the finished hat, and thus, meets
the De Minimis rule stipulated in Section 102.13. Consequently,
the velvet strip is to be disregarded when determining the
country of origin of the finished product. With or without the
velvet strip, the finished shaped hat has all the traditional
features of a finished hat. Therefore, the subject hats are not
comprised of two or more components and the first tariff shift
rule for Heading 6503, HTSUSA, is inapplicable. The second
tariff shift rule for Heading 6503, HTSUSA, is also inapplicable
since the change to Heading 6503, HTSUSA, is from Heading 5602,
HTSUSA, which is specifically excluded from the tariff shift
provision. Thus, Section 102.21(c)(2) is inapplicable.
Section 102.21(c)(3) provides for goods that have been
wholly assembled in a single country, insular possession, or
territory or which are knit to shape. Section 102.21(c)(3) is
therefore inapplicable to the subject merchandise as it has not
been wholly assembled in a single country, insular possession, or
territory, nor is it a knit to shape good.
Section 102.21(c)(4) provides the first multi-country rule.
Section 102.21(c)(4), provides the following:
Where the country of origin of a textile or apparel product
cannot be determined under paragraph (c)(1), (2) or (3) of
this section, the country of origin of the good is the
single
country, territory, or insular possession in which the most
important assembly or manufacturing process occurred.
In this case, the processing in Country C which includes
providing the form and shape of the finished hat by blocking is
the most important manufacturing process. Therefore, in
accordance with Section 102.21(c)(4), the country of origin of
the subject hats is Country C.
HOLDING:
Pursuant to Section 102.21(c)(4), the country of origin of
the subject hats is Country C.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section 19 CFR
177.9(b)(1). This section states that ruling letter is issued on
the assumption that all of the information furnished in the
ruling letter, either directly, by reference, or by implication,
is accurate and complete in every material respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished, this may affect the
determination of country of origin. Accordingly, if there is any
change in the facts submitted to Customs, it is recommended that
a new ruling request be submitted in accordance with 19 CFR
177.2.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division