Margaret R. Polito, Esq.
Neville, Peterson & Williams
80 Broad Street
Suite 3400
New York, NY 10004
RE: Country of origin of a down comforter; NAFTA; 19 CFR 102,
Customs Regulations; General Note 12, HTSUSA
Dear Ms. Polito:
This is in response to your inquiry of April 11, 1994,
requesting a country of origin determination for down comforters
on behalf of your client, Pillowtex. There was no sample
submitted for examination. This is a prospective request.
FACTS:
The importer contemplates importing comforter shells from
Hong Kong and/or China. These shells will either be made of
cotton or man-made fiber material. The production of the shells
will be based on particular specifications from prospective
clients. The shells will come in twin, full, queen, or king
sizes. The manufacturing process is as follows: Either in China
and/or Hong Kong, fabric is cut into pieces and sewn into a
comforter shell; One or more openings is left unattached so that
down filling can be blown inside of the shell. Shell
construction can range from a simple shell with no additional
patterns sewn onto it, to a shell that has "blocks" or separate
compartments designed to prevent the movement of the down. These
compartments or blocks are created by sewing vertical strips of
material called "baffles" through the top and bottom layers of
the comforter shell. The completed shells will be shipped to
Canada.
In Canada, down will be blown into the shells and the shells
will be finished. The down used to fill these shells will come
from various countries, including China, France, or the United
States. In certain instances, the importer will import down from
China and France into the United States for the purposes of
grading, blending and separating. The resulting mixture would be
blended with U.S. origin down to produce fill material. The down
blend would then be transported to Canada. In the alternative,
down may be shipped directly from France, China or the United
States to Canada for assembly with the shells.
ISSUE:
What is the country of origin for the subject down comforter
for marking purposes?
LAW AND ANALYSIS:
As the merchandise in question undergoes processing
operations in Canada, which is a country provided for under the
North American Free Trade Agreement (NAFTA), it is subject to the
country of origin marking rules set forth in the interim
amendments to the Customs Regulations (19 CFR 102). These
interim rules took effect on January 1, 1994. Corrections to the
interim regulations were published on February 3, 1994 (59 Fed.
Reg. 5082). Additional provisions implementing Annex 311 of the
NAFTA are contained in the interim regulations amending part 134,
Customs Regulations, published as T.D. 94-1 on December 30, 1993
(58 Fed. Reg. 69460).
Section 134.1(b), of the interim Customs Regulations states
that for a good of a NAFTA country, the NAFTA marking rules will
determine the country of origin. The NAFTA marking rules appear
in Part 102 of the interim regulations published as T.D. 94-4.
Section 102.11 sets forth the general rules to determine country
of origin.
(a) The country of origin of a good is the country in
which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classification set
out in Section 102.20 and satisfies any other applicable
requirements of that section, and all other applicable
requirements of these rules are satisfied.
As the down comforter is not wholly obtained or produced in
Canada or produced exclusively from domestic materials in Canada,
we must determine whether each foreign material incorporated in
the finished comforter undergoes an applicable change in tariff
classification in accordance with Section 102.11(a)(3) and
provided in Section 102.20.
The finished down comforter is classifiable in subheading
9404.90 of the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA). Section 102.20(t) provides the applicable
tariff shift rule for subheading 9404.90, HTSUSA. Section
102.20(t) states that a change to subheading 9404.90 from any
other heading satisfies the tariff classification shift
provisions set forth in Section 102.11(a)(3).
The comforter shell which is cut and sewn in China and/or
Hong Kong is classifiable in subheading 6307.90, HTSUSA. As
stated above, the down used to fill the comforter shell will come
from various countries, including China, France, or the United
States. In some instances down from various countries will be
imported into the United States for the purposes of grading,
blending and separating. This down sourced from various
countries is classifiable in subheading 0505.10, HTSUSA.
The change in classification pertaining to the down and
comforter shell to subheading 9404.90 for the finished down
comforter is a definite tariff classification change in
accordance with Section 102.20(t). This change satisfies the
aforementioned tariff shift rule.
Moreover, as the aforementioned provisions are interim rules
which may be subject to change, so that no question should arise
as to the appropriate country of origin of the subject comforter
for marking purposes, Customs will look to Section 102.19, the
NAFTA override provision, which states the following, in
pertinent part:
Notwithstanding any provision of these rules other than
Section 102.11(a) or (b) or Section 102.14, if a good
originates under Chapter Four of the NAFTA, and the country
of origin of that good is not determined to be a single
NAFTA country under Section 102.11(a) or (b), the country of
origin of the good is the last NAFTA country in which the
good underwent production other than minor processing. *
* *
General Note 12, HTSUSA, incorporates Article 401 of the
North American Free Trade Agreement (NAFTA) into the HTSUSA.
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.
As the down comforter is made of a comforter shell from Hong
Kong/and or China and down from the United States (a NAFTA
country), China, or France, it does not meet the eligibility
requirements of General Note 12(b)(i) or 12(b)(iii). Therefore,
a determination of NAFTA eligibility will be based on General
Note 12(b)(ii). To qualify under this provision, we must
determine whether the non-originating material (i.e., the down
and the comforter shell), undergo the requisite change in tariff
classification stipulated in General Note 12(t).
The finished down comforter is classifiable in subheading
9404.90, HTSUSA. The rule applicable to goods of Heading 9404,
HTSUSA, is provided for in General Note 12(t), Chapter 94,
Subheading rule 7, which states the following:
A change to subheading 9404.90 from any other chapter,
except from headings 5007, 5111 through 5113, 5208 through
5212, 5309 through 5311, 5407 through 5408 or 5512 through
5516.
The comforter shell is classifiable in subheading 6307.90,
HTSUSA, and the down feathers are classifiable in subheading
0505.10, HTSUSA. The finished down comforter is classifiable in
subheading 9404.90, and therefore, the requisite tariff
classification shift requirement of General Note 12(t) has been
met. Consequently, the down qualifies for NAFTA preferential
treatment.
Finally, since the down is blown into the comforter shell in
Canada and this is not considered minor processing, in accordance
with Section 102.19, the country of origin marking of the
finished down comforter is Canada.
HOLDING:
The down comforter at issue is eligible for NAFTA
preferential duty treatment. Also, in accordance with 19 CFR
102, it is a product of Canada for country of origin marking
purposes.
This ruling letter is being issued pursuant to Article 509
of the NAFTA and Section 181, Subpart I, of the Customs
Regulations.
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. 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
Commercial Rulings Division