MAR-2 RR:TC:SM 559736 AT
Margaret R. Polito, Esq.
Neville, Peterson & Williams
80 Broad Street
34th Floor
New York, New York 10004
RE: Country of origin of NAFTA qualifying down comforters and
proper country of origin marking requirements for imported
down comforter shells to be further processed into
finished down comforters in the U.S.; Section 334 of the
Uruguay Round Agreements Act; Annex 401 of the NAFTA; NAFTA
Marking Rules; 19 U.S.C. 1304; Article 509; T.D. 95-69;
19 CFR 102.19
Dear Ms. Polito:
This is in response to your letter dated March 7, 1996, on
behalf of your client Pillowtex Corporation ("Pillowtex")
requesting a ruling on the country of origin of North American
Free Trade Agreement ("NAFTA") qualifying down comforters to be
imported into the U.S. and the proper country of origin marking
requirements for imported down comforter shells which are to be
further processed into finished down comforters in the U.S.
FACTS:
According to your submission, Pillowtex intends to import
into the U.S. either finished down comforters manufactured in
Canada from foreign down comforter shells or down comforter
shells to be used in the manufacture of finished down comforters
in the U.S. You state that production operations performed in
Canada or the U.S. to make the finished down comforters are
identical and are described as follows:
Down comforter shells of foreign origin which are produced
from a specialty fabric known as "down proof", a fabric that is
woven very tightly in order to prevent down and feathers from
escaping, is to be imported into either Canada or the U.S. You
state that for purposes of this ruling the fabric used in the
construction of the comforter shells is woven in China and that
the comforter shells are also produced in China.
The foreign origin comforter shells after importation into
Canada or the U.S. are filled with down which has been produced
by refining raw feathers. After the down is blown into the
shells, the shells are sewn shut, producing the finished down
comforters. You state that some of the comforters may be quilted
in order to impart certain characteristics.
You state that with respect to the finished down comforters
which are produced in Canada, in the manner described above, and
then imported into the U.S., Customs in HQ 897005 (May 4, 1994)
determined that the Canadian produced comforters are considered
to be NAFTA-originating goods pursuant to Annex 401 of the NAFTA.
You seek a determination as to whether the NAFTA qualifying down
comforters produced in Canada, are subject to any visa
requirements when imported into the U.S. You have requested this
determination in the context of the rules of origin for textile
and apparel products set forth in Section 334 of the Uruguay
Round Agreements Act ("URAA") (Pub. L. 103-465), which will be in
effect on July 1, 1996.
In HQ 559625 dated January 19, 1996, Customs ruled that
section 334, supra, applies for purposes of determining the
country of origin for marking under 19 U.S.C. 1304 and that under
section 334 rules of origin the country of origin of the down
comforters manufactured in the U.S. from imported shells, would
be the country of origin of the fabric of the shells (China).
You now request Customs to determined whether any of the proposed
markings "Made in China", "Made in China Sewn and Stuffed in the
U.S.", or "Sewn and Stuffed in the U.S./Made in China" are
acceptable country of origin markings for the down comforters
which are manufactured in the U.S. from comforter shells of
Chinese origin.
ISSUES:
1. What is the country of origin of the NAFTA qualifying
down comforters produced in Canada, in the manner described
above, for purposes of country of origin marking and visa
requirements under the context of section 334 of the URAA. 2. On or after the effective date of section 334 of the
URAA, will the proposed markings, "Made in China", "Made in China
Sewn and Stuffed in the U.S.", or "Sewn and Stuffed in the
U.S./Made in China" be acceptable country of origin markings for
down comforters produced in the U.S. from Chinese origin
comforter shells?
LAW AND ANALYSIS:
On December 8, 1994, President Clinton signed into law URAA,
Public Law 103-465, 108 Stat. 4809. Subtitle D of Title III of
URAA deals with textiles and includes section 334 (codified at 19
U.S.C. 3592) which concerns rules of origin for textile and
apparel products.
Paragraph (a) of section 334 provides that the Secretary of
the Treasury shall prescribe rules implementing the principles
contained in paragraph (b) for determining the origin of
"textiles and apparel products".
Section 334(b)(1) of the URAA sets forth general principles
concerning how the origin of textile and apparel products should
be determined. That section provides in pertinent part as
follows:
Except as otherwise provided for by statute, a textile
or apparel product, for purposes of the customs laws
and the administration of quantitative restrictions,
originates in a country, territory, or insular
possession, and is the growth, product, or manufacture
of that country, territory, or insular possession, if-
(A) the product is wholly obtained or produced in
that country, territory or insular possessions;
(B) the product is a yarn, thread, twine, cordage,
rope, cable or braiding and-
(i) the constituent staple fibers are spun in that
country, territory, or possession, or
(ii) the continuous filament is extruded in that
country, territory, or possession,
(C) the product is a fabric, including a fabric
classified under chapter 59 of the HTS, and the
constituent fibers, filaments or yarns are woven,
knitted, needled, tufted, felted, entangled or
transformed by any other fabric-making process in that
country, territory, or possession from its component
pieces; or
(D) the product is any other textile or apparel product
that is wholly assembled in that country, territory, or
possession from its component pieces.
(2) Special Rules - Notwithstanding paragraph (1)(D)-
(A) the origin of a good that is classified under one
of the following HTS headings or subheadings shall be
determined in accordance with paragraph (A),(B), or
(C) of paragraph (1), as appropriate: 5609, 5807, 5811,
6209.20.50.40, 6213, 6214, 6301, 6302, 6303, 6304,
6305, 6306, 6307.10, 6307.90, 6308, or 9404.90; ...
On September 5, 1995, Customs published in the Federal
Register the final regulations implementing section 334 of the
URAA. (60 Fed. Reg. 46188). These regulations are set forth in
19 CFR 102.21.
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, every
article of foreign origin (or its container) imported into the
U.S. shall be marked in a conspicuous place as legibly, indelibly
and permanently as the nature of the article (or its container)
will permit, in such a manner as to indicate to the ultimate
purchaser in the U.S. the English name of the country of origin
of the article. Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304.
Country of Origin of NAFTA Originating Comforters
You submit that the NAFTA-originating down comforters
manufactured in Canada, in the manner described above, should be
marked "Made in Canada" and that such comforters would not be
subject to quota restrictions upon importation into the U.S.
Thus, you request Customs verification as to the proper country
of origin marking and visa requirements applicable to the subject
NAFTA-originating down comforters under the context of the URAA
textile rules of origin. In T.D. 95-69 published in the Federal Register on September
5, 1995 (60 Fed. Reg. 46194), Customs stated in part that:
As regards the alleged ambiguity between section 102.19
and 102.21, Customs does not believe that any change to
the proposed regulatory texts is appropriate in this
regard. Section 102.19 was originally adopted in a
strictly NAFTA context in order to clarify the
relationship between the Part 102 NAFTA marking rules
and the separate rules of origin that apply under the
NAFTA for duty preference purposes. Proposed section
102.21(c) included section 102.19 among the existing
Part 102 provisions that may apply for purposes of the
section 102.21(c) general rules because a failure to
mention section 102.19 in this context might
incorrectly give the impression, contrary to the
express terms of section 334 as discussed in the
preceding comment response, that the rules of origin
applicable to "originating goods" under the NAFTA do
not take precedence over the section 102.21 provisions.
(Emphasis added).
Thus, in this case, assuming that the down comforters
manufactured in Canada in the manner described above are
considered to be "originating goods" under the rules of origin
for the NAFTA (19 U.S.C. 3332) and the conditions set forth in
section 102.19 are satisfied, the country of origin of the down
comforters for quota and marking purposes is Canada. If in such
instances, a non-NAFTA country is determined to be the origin of
the down comforters under 19 CFR 102.21, section 102.19 (which
implements 19 U.S.C. 3332) will "override" that origin
determination and the country of origin of the down comforters
will be Canada. Thus, marking these down comforters "Made in
Canada" or "Canada" is acceptable under 19 U.S.C. 1304.
Marking of the Comforters Manufactured in the U.S.
You have requested Customs to rule on whether the proposed
markings "Made in China", "Made in China Sewn and Stuffed in the
U.S.", or "Sewn and Stuffed in the U.S./Made in China" are
acceptable country of origin markings for the down comforters
covered by HQ 559625, supra.
The proposed markings "Made in China", "Made in China Sewn
and Stuffed in the U.S.", or "Sewn and Stuffed in the U.S./Made
in China", each indicate that the country of origin of the
finished down comforters is China (the country of origin of the
fabric) which is consistent with the origin rules set forth in section 334 of the URAA. Accordingly, the proposed markings
would satisfy the country of origin marking requirements of 19
U.S.C. 1304 and would be acceptable country of origin markings
for the down comforters which are produced in the U.S. from
Chinese origin shells.
HOLDING:
Assuming that the down comforters produced in Canada in the
manner described above are considered to be "originating goods"
under the NAFTA and the conditions set forth in section 102.19
are satisfied, the country of origin of the down comforters for
quota and marking purposes is Canada. Marking the down
comforters "Made in Canada" is an acceptable country of origin
marking for the down comforters under 19 U.S.C. 1304.
Pursuant to the origin rules set forth in section 334 of the
URAA (implemented under 19 CFR 102.21) and the country of origin
marking requirements of 19 U.S.C. 1304 the proposed country of
origin markings "Made in China", "Made in China Sewn and Stuffed
in the U.S.", or "Sewn and Stuffed in the U.S./Made in China" are
acceptable country of origin markings for the down comforters
produced in the U.S. from Chinese origin shells.
A copy of this ruling 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 Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division