CLA-2 RR:CR:TE 962001 jb
Mr. Gilles Guilbault
Affiliated
411, Des Recollets
Montreal, Quebec H2Y 1W3
RE: Eligibility under the North American Free Trade Agreement
(NAFTA) and Tariff Preference Levels (TPL) for an adult bib
Dear Mr. Guilbault:
This is in response to your letter, dated June 22, 1998,
requesting clarification regarding the eligibility under the
North American Free Trade Agreement (NAFTA) and Tariff Preference
Levels (TPL) for an adult size bib.
FACTS:
The subject merchandise was addressed in New York Ruling
Letter (NY) C84565, dated March 12, 1998, wherein a determination
was given with respect to the classification and country of
origin of the adult bib. As the determinations rendered in that
ruling are accurate, this letter will only address the issues of
NAFTA and TPL eligibility.
The subject merchandise consists of an adult bib, composed
of 100 percent woven cotton fabric, which is designed for
physically and/or mentally handicapped persons. The bib covers
the front torso, and features three button holes for adjustment
around the neck, and a fabric button.
The manufacturing operations for the subject merchandise are
as follows:
Pakistan
fabric is formed
Canada
fabric is cut into the shape of the bib
piping is sewn around the edge and neckline of the bib
three button holes are sewn at the neckline
fabric button is sewn
ISSUE:
1. Does the merchandise qualify for NAFTA treatment?
2. Is the merchandise eligible for a TPL?
LAW AND ANALYSIS:
North American Free Trade Agreement Eligibility
The subject merchandise undergoes processing operations in
Canada which is a country provided for under the North American
Free Trade Agreement (NAFTA). General Note 12, HTSUSA,
incorporates Article 401 of the North American Free Trade
Agreement (NAFTA) into the HTSUSA. Note 12(a) provides, in
pertinent part:
* * *
(i) 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 Canada 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 "CA" in
parentheses, are eligible for such duty rate... .
[Emphasis added]
Accordingly, the merchandise at issue will be eligible for the
"Special" "CA" rate of duty provided it is a NAFTA "originating"
good under General Note 12(b), Harmonized Tariff Schedule of the
Unites States Annotated (HTSUSA), and it qualifies to be marked
as a good of Canada. 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
* * *
Accordingly, 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 Canada so that the non-originating materials undergo a change
in tariff classification as described in subdivision (t).
As the adult bib is classifiable in heading 6217, HTSUS,
subdivision (t), Chapter 62, rule 38, applies. That note states:
A change to headings 6213 through 6217 from any other
chapter, except from headings 5106 through 5113, 5204
through 5212, 5307 through 5308 or 5310 through 5311,
chapter 54, or headings 5508 through 5516, 5801 through 5802
or 6001 through 6002, provided that the good is both cut and
sewn or otherwise assembled in the territory of one or more
of the NAFTA parties.
When the fabric for the subject bib leaves Pakistan it falls
within heading 5802. As heading 5802 is excepted by
subdivision (t), chapter 62, rule 38, the merchandise does not
meet the terms of the note. Accordingly, the subject merchandise
is not eligible for NAFTA treatment.
Tariff Preference Levels
The issue has been raised whether the scope of the Tariff
Preference Levels is intended to include "apparel accessories"
such as the merchandise discussed above, or whether the scope was
meant to be restricted only to wearing apparel.
Additional U.S. Note 3(a) states:
The rate of duty in the "Special" subcolumn of rates of duty
column 1 followed by the symbol "CA" in parentheses shall
apply to imports from Canada, up to the annual quantities
specified in subdivisions (f) of this note, of apparel goods
provided for in chapters 61 and 62 that are both cut (or
knit to shape) and sewn or otherwise assembled in the
territory of a NAFTA party from fabric or yarn produced or
obtained outside the territory of one of the NAFTA parties.
This office has had the opportunity to discuss the intent of
the scope of the TPL's with the relevant offices who participated
in the drafting of the pertinent Additional U.S. Notes. Based on
those discussions, it is our understanding that the term "apparel
goods" was not meant to be read restrictively to encompass only
textile wearing apparel, but was intended to encompass a broad
range of garments inclusive of wearing apparel accessories. It
is our belief that this is further bolstered by the fact that the
Notes make reference to "apparel goods" which, are indicative not
only of wearing apparel, but also of those articles associated
with wearing apparel, that is, accessories.
Accordingly, as per the terms of Additional U.S. Note 3(a),
the subject merchandise which is cut and sewn (piping sewn around
the edge and neckline of the bib) in Canada from fabric produced
in Pakistan, is eligible for the tariff preference levels.
HOLDING
The subject merchandise, the adult bib, does not qualify for
NAFTA treatment.
The subject merchandise is eligible for the TPL.
As determined in NY C84565, the country of origin of the
subject merchandise is Pakistan.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section 19 CFR
177.9(b)(1). This section states that a ruling letter is issued
on the assumption that all of the information furnished in the
ruling letter, either directly, by reference, or by implication,
is accurate and complete in every material respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished, this may affect the determination of
country of origin. Accordingly, if there is any change in the
facts submitted to Customs, it is recommended that a new ruling
request be submitted in accordance with 19 CFR 177.2.
Sincerely,
John Durant, Director
Commercial Rulings Division