OT:RR:CTF:FTM H312828 TJS
Mr. Yujia Zhang
Farrow Ltd.
475A Admiral Blvd
Mississauga, ON L5T 2N1
Canada
RE: Mattresses; USMCA; De Minimis
Dear Mr. Zhang,
This is in response to your correspondence, dated July 24, 2020, on behalf of Innocor Inc., in which you request a ruling concerning the eligibility of certain mattresses for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below.
FACTS:
The merchandise at issue a king-size foam mattress with a quilted cover, identified as “US Comfort Grande Refresh - KG.” The mattress cover is made of a rayon and polyester blend and utilizes a zippered opening to cover the mattress core. The cover is not intended to be removed once put onto the foam mattress core. According to your supplemental submission, dated September 28, 2020, the manufacturing operations of the mattresses are as follows:
Mattress covers are made in China and imported into Canada as a complete cover.
Mattress foam is made in Canada.
The mattress foam will be further manufactured into a mattress core in Canada.
The mattress cover will be put onto the mattress core in Canada.
The mattress is then compressed and boxed with retail packaging materials.
The final product will be shipped into the United States as a retail product.
According to the Bill of Materials (“BOM”) you provided, all except two materials that comprise the foam mattress cores originate from the United States. Those two materials are Polyol Stable DP1022 from Taiwan and Amine A-33 from China. The BOM provides that the Polyol Stable DP1022 is classified in subheading 2905.39, HTSUS, and the Amine A-33 is classified in subheading 3815.90, HTSUS. Furthermore, the mattress covers from China are classified in subheading 9404.90, HTSUS. Based on the information you submitted, the finished mattress imported into the United States is classified under subheading 9404.21.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: Mattresses: Of cellular rubber or plastics, whether or not covered.”
ISSUE:
Whether the mattresses imported into the United States from Canada are eligible for preferential tariff treatment under the USMCA.
LAW AND ANALYSIS:
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
…
Since the mattresses contain non-originating materials, they are not considered goods wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). The mattresses are also not produced entirely in Canada exclusively from originating materials under GN 11(b)(ii). We must next determine whether the mattresses qualify under GN 11(b)(iii). As previously noted, the imported mattresses are classified under subheading 9404.21.00, HTSUS. The applicable rule of origin for mattresses classified under subheading 9404.21.00, HTSUS, is in GN 11(o)/94.6, HTSUS, which provides “[a] change to subheadings 9404.10 through 9404.30 from any other chapter.” The Polyol Stable DP1022 of Chapter 29, HTSUS, and the Amine A-33 of Chapter 38, HTSUS, meet the tariff shift requirement. However, the quilted mattress covers are classified under subheading 9404.90, HTSUS, which provides for, “Mattress supports; articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: Other: Pillows, cushions and similar furnishings.” See, e.g., New York Ruling Letter (“NY”) N314433 (Oct. 1, 2020); and NY L81762 (Jan. 24, 2005). Since the non-originating quilted mattress cover is classified in Chapter 94, HTSUS, the tariff shift rule is not met.
You believe that the mattresses still qualify for preferential tariff treatment under the USMCA because the mattress covers meet the de minimis rule. The de minimis rule provided by GN 11(e), states in relevant part:
(i) In general.—Except as provided in subparagraphs (e)(ii) through (iv) below, a good that does not undergo a change in tariff classification or satisfy a regional value content requirement set forth in subdivision (o) of this note is an originating good if—
(A) the value of all non-originating materials that are used in the production of the good, and do not undergo the applicable change in tariff classification set forth in subdivision (o) of this note—
(1) does not exceed 10 percent of the transaction value of the good, adjusted to exclude any costs incurred in the international shipment of the good; or
(2) does not exceed 10 percent of the total cost of the good;
(B) the good meets all other applicable requirements of this note; and
(C) the value of such non-originating materials is included in the value of non-originating materials for any applicable regional value content requirement for the good.
You have provided CBP with the value of the mattress (adjusted to exclude any costs incurred in the international shipment) and the mattress cover. Based on the information provided, we agree with you that the non-originating mattress cover is de minimis, as it represents less than 10 percent of the transaction value of the mattress. Accordingly, the finished mattress imported from Canada qualifies for preferential tariff treatment under the USMCA.
HOLDING:
Based on the information provided, the mattresses are eligible for preferential tariff treatment under the USMCA.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Yuliya A. Gulis, Chief
Food, Textiles and Marking Branch