OT:RR:CTF:FTM H311978 PJG
Center Director
Apparel, Footwear and Textiles Center, Team 054
139 Southern Boulevard
Savannah, Georgia 31405
Attn: Mayra V. Asencio, Import Specialist
RE: Application for Further Review of Protest No. 4103-20-100943; Section 301; Subheading 9903.88.03, HTSUS; Plain Woven Fabric
Dear Center Director:
This is in reference to the Application for Further Review (“AFR”) of Protest No. 4103-20-100943, timely filed on May 11, 2020, by Lamb & Lerch, on behalf of Fluvitex USA, Inc. (“Fluvitex” or “Protestant”). Fluvitex is protesting denial of the applicability of U.S. Note 20(w)(11) to Chapter 99, HTSUS, which is an exclusion to Section 301 of the Trade Act of 1974 (“Section 301”) issued by the U.S. Trade Representative (“USTR”) to plain woven fabric sheeting that was classified by the Protestant and CBP in subheading 5513.11.0040, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). This decision addresses the proper classification of the merchandise as well as the applicability of the exclusion order.
FACTS:
The merchandise at issue in this AFR is a plain woven fabric from China that is used as the “base raw material for comforters produced by Fluvitex USA, Inc. as part of the manufacturing process” for their customers, IKEA USA and IKEA Canada. The merchandise was entered from February 2019 to December 2019. The subject plain woven fabric was entered and liquidated in subheading 5513.11.0040, HTSUSA, which provides for “Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2: Unbleached or bleached: Of polyester staple fibers, plain weave: Sheeting.” The 2019 column one, general rate of duty for subheading 5513.11.0040, HTSUSA, is 14.9 percent ad valorem.
USTR issued a Federal Register Notice on September 21, 2018, announcing, in part, a list of subheadings under the HTSUS that are subject to an additional 25 percent ad valorem rate of duty imposed by subheading 9903.88.03, HTSUS, for products that are entered for consumption, or withdrawn from warehouse for consumption, on or after January 1, 2019. See 83 Fed. Reg. 47977 (Sept. 21, 2018). Included in that list was subheading 5513.11.00, HTSUS. Id.
The Protestant filed for a Section 301 Exclusion Order (Exclusion Request ID No. USTR-2019-0005-0766) with USTR to cover the product with the following specifications:
Fabric: 65% polyester; 35% cotton, NE 45/45, 110/76 threads per inch, 100 g/m2
USTR granted the exclusion request as reflected in a letter issued to the requester on September 17, 2019 and a notice published in the Federal Register on September 20, 2019, specifically in 84 Fed. Reg. 49591. In Annex A to the Federal Register notice, USTR modified Chapter 99 of the HTSUS, specifically, subheading 9903.88.18, HTSUS, to include U.S. Note 20(w)(11), to provide for “Woven fabric sheeting of 65 percent polyester and 35 percent cotton, weighing less than 170 g/m2, not exceeding 45/45 or 110/76 threads per inch (described in statistical reporting number 5513.11.0040).”
Three samples of the merchandise at issue were sent to the U.S. Customs and Border Protection Laboratories and Scientific Services Directorate (“CBP Laboratory”) for analysis, which issued three laboratory reports. Laboratory Report No. SV20200098 (hereinafter “Sample 1”) concerned Item No. FA00000204, Laboratory Report No. SV20200099 (hereinafter “Sample 2”) concerned Item No. FA00000203, and Laboratory Report No. SV20200100 (hereinafter “Sample 3”) concerned Item No. FA00000200. The CBP Laboratory found that the three samples each consisted of plain woven fabric. Moreover, they determined the following concerning the weight and composition of each of the three samples:
Sample 1 (Item No. FA00000204) – plain woven fabric that is dyed red and is made of staple yarns
66.4 percent polyester and 33.6 percent cotton staple fibers
44/27 yarn size
112/69 threads per inch
97.9 g/m2
Average yarn number is 72
Single yarns per cm2 is 71
Sample 2 (Item No. FA00000203) – plain woven fabric that is dyed red and is made of staple yarns
66.4 percent polyester and 33.6 percent cotton staple fibers
44/28 yarn size
112/71 threads per inch or alternatively,
97.4 g/m2
Average yarn number is 73
Single yarns per cm2 is 72
Sample 3 (Item No. FA00000200) – plain woven fabric that is unbleached is made of staple yarns
65.5 percent polyester and 34.5 percent cotton staple fibers
44/28 yarn size
112/71 threads per inch
97.0 g/m2
Average yarn number is 74
Single yarns per cm2 is 72
ISSUES:
What is the tariff classification of the subject plain woven fabric under the HTSUS?
Does the Section 301 Exclusion Order granted by USTR and provided for in U.S. Note 20(w)(11) to Chapter 99, HTSUS, apply to the subject plain woven fabric?
LAW AND ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on the classification and rate and amount of duties chargeable. The protest was timely filed within 180 days of liquidation. See 19 U.S.C. § 1514(c)(3).
Protestant alleges that Further Review of Protest No. 4103-20-100943 should be accorded pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts. We find that Further Review of Protest No. 4103-20-100943 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b).
The 2019 HTSUS provisions under consideration are as follows:
5513 Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2:
Unbleached or bleached:
5513.11.00 Of polyester staple fibers, plain weave:
* * *
5513.11.0020 Poplin or broadcloth
5513.11.0040 Sheeting
* * *
Dyed:
5513.21.00 Of polyester staple fibers, plain weave:
5513.21.0020 Poplin or broadcloth
* * *
9903.88.03 Except as provided in headings 9903.88.13 or 9903.88.18, articles the product of China, as provided for in U.S. note 20(e) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(f)
* * *
9903.88.18 Articles the product of China, as provided for in U.S. Note 20(w) to this subchapter, each covered by an exclusion granted by the U.S. Trade Representative
U.S. Statistical Note 1(a)-(b) and (ij) to Chapter 55, HTSUS, state as follows:
For the purposes of the woven fabrics of chapter 55:
The term “poplin or broadcloth” means plain weave fabrics, not of square construction, whether or not napped, but does not include the following types:
Fabrics weighing not more than 170 grams per square meter, containing 33 or less warp ends and filling picks per square centimeter; and
Fabrics weighing more than 170 grams per square meter, of average yarn number 26 or lower number.
(b) The term “sheeting” means plain weave fabrics, whether or not napped, of the following types:
Fabrics weighing not more than 170 grams per square meter, of square construction, containing more than 33 warp ends and filling picks per square centimeter, of average yarn number 68 or lower number, but not including printcloth; and
Fabrics weighing more than 170 grams per square meter, but does not include:
Fabrics of which the warp or filling consists of multiple (folded) or cabled yarns, of average yarn number 26 or lower number; and
Fabrics of average yarn number 27 or higher number, not of square construction.
* * *
(ij) The term “square construction” means fabrics of the following types:
Containing less than 79 warp ends and filling picks per square centimeter, of which the difference between the total count of warp ends per centimeter and the total count of filling picks per centimeter is less than 11; or
Containing 79 or more warp ends and filling picks per square centimeter, of which the total count of warp ends per centimeter and the total count of filling picks per centimeter are each less than 57 percent of the total count per square centimeter of such warp ends and filling picks.
U.S. Note 20(e) to Chapter 99, HTSUS, provides, in relevant part, as follows:
(e) For purposes of heading 9903.88.03, products of China, as provided for in this note, shall be subject to an additional 25 percent ad valorem rate of duty. The products of China that are subject to an additional 25 percent ad valorem rate of duty under heading 9903.88.03 are products of China that are classified in the subheadings enumerated in U.S. note 20(f) to subchapter III. All products of China that are classified in the subheadings enumerated in U.S. note 20(f) to subchapter III are subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.03, except products of China granted an exclusion by the U.S. Trade Representative and provided for in (1) heading 9903.88.13 and U.S. note 20(p) to subchapter III of chapter 99; or (2) heading 9903.18.18 and U.S. note 20(w) to subchapter III of chapter 99.
Notwithstanding U.S. note 1 to this subchapter, all products of China that are subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.03 shall also be subject to the general rates of duty imposed on products of China classified in the subheadings enumerated in U.S. note 20(f) to subchapter III.
Products of China that are classified in the subheadings enumerated in U.S. note 20(f) to subchapter III and that are eligible for special tariff treatment under general note 3(c)i) to the tariff schedule, or that are eligible for temporary duty exemptions or reductions under subchapter II to Chapter 99, shall be subject to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.03.
* * *
Products of China that are provided for in heading 9903.88.03 and classified in one of the subheadings enumerated in U.S. note 20(f) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees, exactions and charges that apply to such products, as well as to the additional 25 percent ad valorem rate of duty imposed by heading 9903.88.03.
U.S. Note 20(f) includes subheadings 5513.11.00 and 5513.21.00, HTSUS.
U.S. Note 20(w)(11) to Chapter 99, HTSUS, provides as follows:
The U.S. Trade Representative determined to establish a process by which particular products classified in heading 9903.88.03 and provided for in U.S. notes 20(e) and (f) to this subchapter could be excluded from the additional duties imposed by heading 9903.88.03. See 83 Fed. Reg. 47974 (September 21, 2018) and 84 Fed. Reg. 29576 (June 24, 2019). Pursuant to the product exclusion process, the U.S. Trade Representative has determined that the additional duties provided for in heading 9903.88.03 shall not apply to the following particular products, which are provided for in the enumerated statistical reporting numbers:
* * *
(11) Woven fabric sheeting of 65 percent polyester and 35 percent cotton, weighing less than 170 g/m2, not exceeding 45/45 or 110/76 threads per inch (described in statistical reporting number 5513.11.0040).
* * *
The subject merchandise was entered and liquidated in subheading 5513.11.0040, HTSUSA, and the classification of the merchandise was not disputed in the AFR. However, upon further consideration, we find that the merchandise was improperly classified because the merchandise does not meet the definition for “sheeting” as provided for in Statistical Note 1(b) to Chapter 55, HTSUS.
U.S. Statistical Note 1(b)(i) requires that for plain weave fabrics weighing not more than 170 g/m2, the fabric must be “of square construction, containing more than 33 warp ends and filling picks per square centimeter, of average yarn number 68 or lower number, but not including printcloth.” The CBP Laboratory determined that all three samples weigh less than 170 g/m2, therefore, we consider the applicability of the definition for “sheeting” provided for in U.S. Statistical Note 1(b)(i). Sample 1 has an average yarn number of 71 and Sample 2 and 3 have an average yarn number of 72, therefore, the three samples do not have an average yarn number of 68 or lower as required by U.S. Statistical Note 1(b)(i). Accordingly, the merchandise in Samples 1-3 (Item Nos. FA00000204, FA00000203, and FA00000200) is not “sheeting” as provided for in U.S. Statistical Note 1(b) for products of Chapter 55, HTSUS.
The CBP Laboratory determined that Samples 1 and 2 (Item Nos. FA00000204 and FA00000203) are dyed plain woven fabric that are each composed of chief weight polyester staple fibers. To determine the classification of the merchandise at the ten-digit level, we must first consider the definition of “poplin or broadcloth” as provided for in U.S. Statistical Note 1(a) to Chapter 55, HTSUS. U.S. Statistical Note 1(a)(i) to Chapter 55, HTSUS, states that the term “poplin or broadcloth” fabrics means “plain weave fabrics, not of square construction, whether or not napped, but does not include the following types: (i) Fabrics weighing not more than 170 grams per square meter, containing 33 or less warp ends and filling picks per square centimeter.” Samples 1 and 2 (Item Nos. FA00000204 and FA00000203) are plain weave fabrics, that are not of square construction (as defined in U.S. Statistical Note 1(ij) to Chapter 55, HTSUS), they do not weigh more than 170 g/m2, and they contain more than 33 warp ends and filling picks per square centimeter, specifically, Sample 1 (Item No. FA00000204) contains 71 single yarns per cm2 and Sample 2 (Item No. FA00000203) contains 72 single yarns per cm2. Samples 1 and 2 (Item Nos. FA00000204 and FA00000203) are not of square construction because for fabrics that contain less than 79 warp ends and filling picks per square centimeters, the difference between the total count of warp ends per centimeter and the total count of filling picks per centimeter must be less than 11, and for Sample 1 (Item No. FA00000204) it is 17 and for Sample 2 (Item No. FA00000203) it is 16. Therefore, the dyed plain woven fabrics are more appropriately classified in subheading 5513.21.0020, HTSUSA, which provides for “Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2: Dyed: Of polyester staple fibers, plain weave: Poplin or broadcloth.”
The CBP Laboratory determined that Sample 3 (Item No. FA00000200) is an unbleached plain woven fabric that is composed of chief weight polyester staple fibers. Also, in accordance with U.S. Statistical Note 1(a)(i) to Chapter 55, HTSUS, Sample 3 (Item No. FA00000200) meets the definition of “poplin or broadcloth” fabrics. This is because Sample 3 (Item No. FA00000200) is a plain weave fabric, that is not of square construction (as defined in U.S. Statistical Note 1(ij) to Chapter 55, HTSUS), it does not weigh more than 170 g/m2, and it contains more than 33 warp ends and filling picks per square centimeter, specifically, Sample 3 (Item No. FA00000200) contains 72 single yarns per cm2. Sample 3 (Item No. FA00000200) is not of square construction because for fabrics that contain less than 79 warp ends and filling picks per square centimeters, the difference between the total count of warp ends per centimeter and the total count of filling picks per centimeter must be less than 11, and for Sample 3 (Item No. FA00000200) it is 16. Therefore, the unbleached plain woven fabric is classified in subheading 5513.11.0020, HTSUSA, which provides for “Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2: Unbleached or bleached: Of polyester staple fibers, plain weave: Poplin or broadcloth.”
Additionally, the issue is whether the dyed plain woven fabrics (Item Nos. FA00000204 and FA00000203), which are classified in subheading 5513.21.0020, HTSUSA, are subject to the additional 15 percent ad valorem duty imposed on merchandise of that subheading, in accordance with subheading 9903.88.16, HTSUS, and whether the unbleached plain woven fabric (Item No. FA00000200), which is classified in subheading 5513.11.0020, HTSUSA, is subject to the additional 25 percent ad valorem duty imposed on merchandise of that heading, in accordance with subheading 9903.88.03, HTSUS.
We note that on December 18, 2019, USTR issued a Federal Register Notice indicating that the additional 15 percent ad valorem duty that was to be imposed on certain products of subheading 9903.88.16, HTSUS, which included subheading 5513.21.00, HTSUS, was suspended effective December 15, 2019. See 84 Fed. Reg. 69,447 (Dec. 18, 2019). Therefore, the only entries in this AFR that are potentially subject to Section 301 duties are those wherein the subject unbleached plain woven fabric (Item No. FA00000200) was entered.
Also, as determined above, the products considered in Samples 1, 2, and 3 (Item Nos. FA00000204, FA00000203, and FA00000200) are not classifiable in subheading 5513.11.0040, HTSUS, therefore, they cannot be subject to the Section 301 exclusion at issue, specifically, U.S. Note 20(w)(11) to Chapter 99, HTSUS. Therefore, Sample 3 (Item No. FA00000200) is subject to the duty provided for in subheading 5513.11.00, HTSUS, in addition to 25 percent ad valorem duty rate provided for under subheading 9903.88.03, HTSUS.
HOLDING:
The subject dyed plain woven fabric (Item Nos. FA00000204 and FA00000203) are classified in subheading 5513.21.0020, HTSUSA, which provides for “Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2: Dyed: Of polyester staple fibers, plain weave: Poplin or broadcloth.” The 2019 column one, general rate of duty for subheading 5513.21.0020, HTSUSA, for the merchandise that is at issue in this AFR, is 14.9 percent ad valorem.
The subject unbleached plain woven fabric (Item No. FA00000200) is classified in subheading 5513.11.0020, HTSUSA, which provides for “Woven fabrics of synthetic staple fibers, containing less than 85 percent by weight of such fibers, mixed mainly or solely with cotton, of a weight not exceeding 170 g/m2: Unbleached or bleached: Of polyester staple fibers, plain weave: Poplin or broadcloth.” The subject unbleached plain woven fabric (Item No. FA00000200) is not excluded under U.S. Note 20(w)(11) to Chapter 99, HTSUS, from the additional Section 301 duty provided for in subheading 9903.88.03, HTSUS. The 2019 column one, general rate of duty for subheading 5513.11.0020, HTSUSA, is 14.9 percent ad valorem and the merchandise at issue is subject to an additional Section 301 duty at 25 percent ad valorem.
Duty rates are provided for convenience and are subject to change.
You are instructed to DENY the protest, except to the extent reclassification of the merchandise as indicated above results in a net duty reduction and partial allowance.
In accordance with sections IV and VI of the CBP Protest/Petition Processing Handbook, you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any re-liquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page at http://www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division