CLA-2 RR:TC:TE 961238 jb
Mr. Owen Hairsine
Zeotrope Holdings, Ltd.
12993 80th Avenue
Surrey, British Columbia
V3W 3B1 Canada
RE: Modification of NY C81609, dated November 19, 1997; country
of origin of nursing pads; 102.21(c)(2); tariff shift
Dear Mr. Hairsine:
On, November 19, 1997, our New York office issued to you New
York Ruling Letter (NY) C81609 addressing the classification and
country of origin of two styles of cotton nursing pads. A review
of the file has revealed that although the classification
determination for the subject merchandise is accurate, an
inaccurate determination was made with respect to the origin of
the subject merchandise. Additionally, we note that your
question with respect to coverage under the North American Free
Trade Agreement (NAFTA) for this merchandise was left unanswered.
Accordingly, this letter will set out the proper analysis and
country of origin determination for this merchandise.
FACTS:
The subject merchandise consists of two styles of nursing
pads, one with a breathable waterproof nylon backing, and one
without this backing, made of 100 percent cotton woven fabric.
As stated in your letter, dated November 2, 1997, the
manufacturing operations for this merchandise are as follows:
China
cotton flannelette fabric is formed (for both styles)
United States
polyurethane coated nylon taffeta is formed (for style with
waterproof backing only)
Canada
cotton flannelette is cut into six pieces; three pieces with
a triangle shape and three pieces with a half moon shape
for styles with waterproof backing only, the waterproof
breathable nylon is cut into two pieces (a triangle and
a half moon)
triangle and moon pieces are joined together using an off
the arm seamier sewing machine
for styles with waterproof backing only, the two nylon
pieces are joined on a single needle sewing machine
edge of the nursing pad is closed by using a serging sewing
machine
for styles with waterproof backing only, the cotton and
nylon are attached by serging the edges of both pieces
six nursing pads are packaged
ISSUE:
1. Does the subject merchandise qualify for NAFTA treatment?
2. What is the proper country of origin for the subject
merchandise?
LAW AND ANALYSIS:
NAFTA eligibility
The subject nursing pads undergo processing operations in
Canada which is a party to the North American Free Trade
Agreement (NAFTA). General Note 12, Harmonized Tariff Schedule
of the United States Annotated (HTSUSA), incorporates Article 401
of the NAFTA into the HTSUSA. Note 12(a) provides, in pertinent
part:
* * *
(i) Goods that originate in the territory of a NAFTA party
under the terms of subdivision (b) of this note and
that qualify to be marked as goods of Canada under the terms of the marking rules... and are entered under a
subheading for which a rate of duty appears in the
"Special" subcolumn followed by the symbol "CA" in parentheses,
are eligible for such duty rate... . [Emphasis added]
Accordingly, the nursing pads at issue will be eligible for the
"Special" "CA" rate of duty provided it is a NAFTA "originating"
good under General Note 12(b), HTSUSA, and it qualifies to be
marked as a good of Canada. Note 12(b) provides in pertinent
part,
For the purposes of this note, goods imported into the
customs territory of the United States are eligible for the
tariff treatment and quantitative limitations set forth in
the tariff schedule as "goods originating in the territory
of a NAFTA party" only if--
(i) they are goods wholly obtained or produced entirely in
the territory of Canada, Mexico and/or the United States;
or
(ii) they have been transformed in the territory of
Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note,
each of the non-originating materials used in the
production of such goods undergoes a change in tariff
classification described in subdivisions (r), (s) and (t) of this
note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable
requirements of subdivisions (r), (s) and (t)
where no change in tariff classification is required, and the
goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the
territory of Canada, Mexico and/or the United States
exclusively from originating materials; or
* * *
The subject merchandise qualifies for NAFTA treatment only
if the provisions of General Note 12(b)(ii)(A) are met, that is,
if the merchandise is transformed in the territory of Canada so
that the non-originating material (the fabric formed in China)
undergoes a change in tariff classification as described in
subdivision (t).
As the nursing pads are classifiable in subheading
6217.10.9510, HTSUSA, subdivision (t), Chapter 62, rule 38,
applies. That note states that:
A change to headings 6213 through 6217 from any other
chapter, except from headings 5106 through 5113, 5204
through 5212, 5307 through 5308 or 5310 through 5311,
chapter 54, or headings 5508 through 5516, 5801 through 5802
or 6001 through 6002, provided that the good is both cut and
sewn or otherwise assembled in the territory of one or more
of the NAFTA parties.
When the fabric for the subject nursing pads leave China it
is classifiable within headings 5204 through 5212. As the
headings covering woven fabrics of cotton are excepted by
subdivision (t), chapter 62, rule 38, the terms of the note are
not met. Accordingly, the subject nursing pads do not qualify
for NAFTA treatment.
Country of origin
On December 8, 1994, the President signed into law the
Uruguay Round Agreements Act. Section 334 of that Act provides
new rules of origin for textiles and apparel entered, or
withdrawn from warehouse, for consumption, on and after July 1,
1996. On September 5, 1995, Customs published Section 102.21,
Customs Regulations, in the Federal Register, implementing
Section 334 (60 FR 46188). Thus, effective July 1, 1996, the
country of origin of a textile or apparel product shall be
determined by sequential application of the general rules set
forth in paragraphs (c)(1) through (5) of Section 102.21.
Paragraph (c)(1) states that "The country of origin of a
textile or apparel product is the single country, territory, or
insular possession in which the good was wholly obtained or
produced." As the subject merchandise is not wholly obtained or
produced in a single country, territory or insular possession,
paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states that "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 the
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."
Paragraph (e) states that "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:"
6215-6217 If the good consists of two or more component
parts, a change to an assembled good of
heading 6215 through 6217 from unassembled
components, provided that the change is the
result of the good being wholly assembled in
a single country, territory, or insular
possession.
The subject merchandise is classified in heading 6217,
HTSUS. As the subject nursing pads are wholly assembled in a
single country, Canada, the country of origin of the nursing pads
is Canada.
Sincerely,
John Durant, Director
Commercial Rulings Division