CLA-2-61:RR:NC:TAB:354 D81931

Ms. Patricia A. Perez
International Trade & Commerce, Inc.
1601 W. Calton Road
Laredo, TX 78041

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of coated knit gloves from Mexico; Article 509. Country of origin.

Dear Ms Perez:

In your letter dated August 6, 1998, on behalf of Nimex Saltillo SA de CV, you requested a ruling on the status of coated knit gloves from Mexico under the NAFTA.

The submitted sample, Style NEW AK22, is a finely knit cotton glove which you indicate is manufactured in Malaysia. In Mexico this knit glove is completely covered with a nitrile latex glove using an adhesive. The gauntlet style gloves feature a textured palm. You indicate that the gloves will be packed in polybags containing 1 dozen pairs.

The applicable tariff provision for the coated knit gloves will be 6116.1.06500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for gloves, mittens and mitts, knitted or crocheted: impregnated, coated or covered with plastics or rubber: without fourchettes: other: other. The general rate of duty will be 11.2 percent ad valorem.

The subject merchandise undergoes processing operations in Mexico which is a country provided for under the North American Free Trade Agreement (NAFTA). General Note 12, HTSUSA, incorporates Article 401 of the NAFTA into the HTSUSA. Note 12(a) provides, in pertinent part:

* * *

(ii) 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 Mexico 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 "MX" in parentheses, are eligible for such duty rate... . [Emphasis added]

Accordingly, the merchandise at issue will be eligible for the "Special" "MX" 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 Mexico. 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 Mexico so that the non-originating material undergoes a change in tariff classification as described in subdivision (t).

The coated gloves are classified in subheading , 6116.1.06500 HTSUSA. For heading 6116, HTSUS, subdivision (t), Chapter 61, rule 39, states that:

A change to headings 6113 through 6117 from any other chapter, except from headings 5106 through 5113, 5204, through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or heading 5508 through 5516 or 6001 through 6002, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

The knit glove is formed in Malaysia and considered a non-originating material. As a heading 6116 HTSUS item, it is excepted by rule 39 to chapter 61, the glove from Malaysia does not undergo the requisite change in tariff classification. Accordingly, the coated knit glove from Mexico is not eligible for the NAFTA preference. Country of origin

On September 5, 1995, Customs published in the Federal Register (60 FR 46188) T.D. 95-69 which set forth final amendments to the Customs Regulations to implement the provisions of section 334(b) of the Uruguay Round Agreements Act ("the Act"), Public Law 103-465, 108 Stat. 4809, hereinafter 19 U.S.C. 3592, regarding the country of origin of textile and apparel products. These final regulations apply to goods entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. The regulatory provisions in T.D. 95-69 that implement the basic origin principles of section 334(b) of the Act are contained in a new 102.21 of the Customs Regulations (19 C.F.R. 102.21).

The final rule for the rules for determining country of origin of a good for purposes of Annex 311 of the NAFTA was published by Customs on June 6, 1996, in the Federal Register (61 FR 28932). Therein it was stated, in pertinent part:

New 102.21 was modeled on the approach taken in the interim Part 102 texts as published in T.D. 94-4 and thus incorporates a general statement of applicability (paragraph (a)), various definitions (paragraph (b)), general origin rules (paragraphs (c) and (d)), and specific tariff shift and/or other requirements (paragraph (e)) that apply under the second general rule. Of particular note for purposes of the present document is the definition of "textile or apparel product" in 102.21(b)(5) which delineates the class of goods covered by the 102.21 rules. That definition identifies those goods with reference to classification in the HTSUS and refers to Chapters 50 through 63 (that is, all of Section XI) of the HTSUS as well as to specific headings and 6-, 8- or 10-digit subheadings of the HTSUS that fall outside Section XI. Thus, if a good is classifiable in an HTSUS provision listed in 102.21(b)(5), precedence must be given to the 102.21 rules over any other regulatory provision with regard to that good, including any origin rules contained elsewhere in part 102.

Accordingly, as the subject merchandise is classified in heading 6116, HTSUS, as an apparel product identified by 102.21(b)(5), the 102.21 rules take precedence over any other rules of origin to determine the appropriate country of origin.

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 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".

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":

We have determined that the proper classification of the subject articles is within heading 6116 of the Harmonized Tariff Schedule of the United States (HTSUS). The applicable rule is found at 19 C.F.R. 102.21(e), 6101-6117 which requires:

(1) If the good is not knit to shape and consists of two or more component parts, a change to an assembled good of heading 6101 through 6117 from unassembled components, 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 is not knit to shape and does not consist of two or more component parts, a change to heading 6101 through 6117 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5806, 5809 through 5811, 5903, 5906 through 5907, and 6001 through 6002, and subheading 6307.90, and provided that the change is the result of a fabric-making process. (3) If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.

As the subject merchandise is not knit to shape, consists of two or more component parts and is not assembled in one country, Section 102.21(c)(2) is not applicable to this merchandise.

Paragraph (c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As this merchandise is not knit to shape and was not wholly assembled in a single country it is excepted from provision (ii), paragraph (c)(3) is inapplicable.

Paragraph (c)(4) states that, "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 the case of the subject merchandise, important assembly and manufacturing operations occur in both Malaysia and Mexico. Neither the knit glove formation nor the latex coating process is considered more important than the other, paragraph (c)(4) is not applicable to this merchandise.

Paragraph (c)(5) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred". Accordingly, in the case of the subject coated glove, the country of origin is conferred in the last country in which an important assembly or manufacturing process occurred, that is, Mexico.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Brian Burtnik at 212-466-5880.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,
National Commodity
Specialist Division