OT:RR:CTF:TCM HQ 155795 AMM
Mr. John Peterson
Neville Peterson LLP
17 State Street, 19th Floor
New York, NY 10004
RE: Ruling Request; Classification and Country of Origin Marking of Pillows and Cushions
Dear Mr. Peterson:
This is in response to your ruling request, dated December 22, 2010, filed on behalf of Plantation Patterns Furniture Co. (Plantation Patterns), regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) and country of origin marking of certain pillows and cushions which Plantation Patterns intends to import from the People’s Republic of China. In reaching our decision, Customs and Border Protection (CBP) has considered your original Request for Ruling, your response to our request for additional information, dated February 16, 2011, and a teleconference with CBP officials held on April 25, 2011.
FACTS:
Plantation Patterns is a manufacturer of home furnishings for indoor and outdoor use. In your ruling request, you describe a prospective transaction for the importation of pillows and cushions.
In the first step of the manufacturing process, Plantation Patterns orders converted fabric from a fabric converter. Plantation Patterns specifies the type of fabric, the pattern and color to be placed on the fabric, and other conditions. In one scenario, Plantation Patterns orders fabric from a Taiwanese converter, who then acquires greige fabric from unknown sources and performs printing or dyeing (but not both) operations on that fabric to produce converted cover fabric. The Taiwanese converter may also perform subsidiary operations on the greige fabric, such as napping, weighting, and stiffening. The converted fabric is then delivered to an assembly plant in China. You also posit an alternate scenario in which Plantation Patterns orders converted fabric from a United States company, rather than a Taiwanese converter. That unidentified company then arranges to have converted fabric delivered to the assembly plant in China. The converted fabrics are commingled in the assembly plant’s inventory based on the particular pattern.
The converted fabrics are withdrawn from inventory, cut to size and shape, and formed into a pillow or cushion shell by sewing shut three of the four rectangular borders. The shell is then stuffed with stuffing material (fiberfill or foam). The stuffed article is then sewn shut, tested, inspected, and packed for exportation from China to the United States.
In both scenarios, Plantation Patterns is not advised of the country of origin of the greige fabric used to produce the converted fabric. In fact, the Taiwanese converter has apparently refused to provide Plantation Patterns with this information upon request, citing unidentified “business reasons.”
Specifically, you state in your ruling request of December 22, 2010, that “Plantation Patterns is not advised of the country of origin of the greige goods used to produce the converted fabrics which it purchases from the Taiwanese converter or the United States-based supplier.” Further, you state that the Taiwanese converter “has indicated that it sources greige fabric from many different countries, but for business reasons, has elected not to identify these countries to Plantation Patterns.” You also indicate that “[t]he reluctance likely arises out of competitive concerns”. You also state that “Plantation Patterns is unconcerned with the origin of the greige fabric, provided it receives converted (dyed and printed) fabric meeting its specifications. Finally, during the teleconference held with CBP officials on April 25, 2011, you stated that even if the converter did identify the countries of origin of the converted fabrics, there would be no way to verify the truth or accuracy of those statements.
When asked “If made from the same fabric, will the shells be made from a single bolt of fabric or from multiple rolls”, you replied:
In general, the shells for the pillows and cushions will be made from a single bolt of fabric. There will be occasions where the fabric remaining on a bolt of cloth may be sufficient to fashion only one side of a pillow or comforter shell, and the fabric of the other side will be cut from a different bolt of fabric.
ISSUES:
I. What is the classification of the pillows and cushions under the HTSUS?
II. What is the country of origin of the pillows and cushions?
LAW AND ANALYSIS:
I. Classification
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied.
The 2011 HTSUS provisions at issue are as follows:
9404 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:
9404.90 Other:
Pillows, cushions and similar furnishings:
9404.90.10 Of Cotton
9404.90.20 Other
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The subject merchandise consists of a variety of pillows and cushions that will be used with indoor and outdoor furniture. The fabrics used for the outer shells will have different fibre contents, although each individual pillow or cushion will be made from a single type of fabric. The pillows and cushions will be stuffed with loose plastic foam or loose fibrefill. CBP agrees with the opinion that you expressed in your ruling request, that the instant articles are properly classified under heading 9404, HTSUS. If the fabric is cotton, the articles are classified under subheading 9404.90.10, HTSUS, which provides for “[A]rticles of bedding and similar furnishing (for example, … cushions … and pillows) … stuffed or internally fitted with any material … : Other: Pillows, cushions and similar furnishings: of cotton”. If the fabric is other than cotton, the articles are classified under subheading 9404.90.20, HTSUS, which provides for “[A]rticles of bedding and similar furnishing (for example, … cushions … and pillows) … stuffed or internally fitted with any material … : Other: Pillows, cushions and similar furnishings: Other”.
II. Country of Origin Marking
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), requires 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 manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. The regulations implementing the requirements and exceptions to 19 U.S.C. §1304 are set forth in Part 134, CBP Regulations (19 C.F.R. §134).
Section 134.1(b), CBP Regulations (19 C.F.R. §134.1(b)), defines "country of origin" as:
[T]he country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of [the marking requirements] …
Title 19, Section 3592, of the United States Code (19 U.S.C. §3592) was promulgated to implement the Uruguay Round Agreements Act provisions concerning the classification of textiles. CBP published 19 C.F.R. §102.21 in response. See 60 FR 46188. In Pac Fung Feather Co. Ltd. v. United States, 911 F.Supp. 529 (Ct. Int’l. Trade 1995), aff’d 111 F.3d 114 (Fed. Cir. 1997), the Court of International Trade held that CBP’s promulgation of its final regulations concerning the rules of origin for textile and apparel products to be in accordance with the law.
19 C.F.R. §102.21 states, in pertinent part:
(a) [T]he provisions of this section will control the determination of the country of origin of imported textile and apparel products for purposes of the Customs laws and the administration of quantitative restrictions.
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(b) Definitions. The following terms will have the meanings indicated when used in this section:
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(2) Fabric-making process. A fabric-making process is any manufacturing operation that begins with polymers, fibers, filaments (including strips), yarns, twine, cordage, rope, or fabric strips and results in a textile fabric.
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(c) General rules … the country of origin of a textile or apparel product will be determined by sequential application of paragraphs (c)(1) through (5) of this section …
(1) The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.
(2) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.
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(4) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred.
(5) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory, or insular possession in which an important assembly or manufacturing process occurred.
(e) Specific rules by tariff classification.
(1) The following rules will apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:
HTSUS Tariff shift and/or other requirements
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9404.90 … the country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process
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To determine the country of origin of the instant merchandise, CBP must consider 19 C.F.R. §102.21(c)(1) through (5) in order. The outer shells of the merchandise are made up of greige fabrics imported to China from another unidentified country. You state that your converters have refused to identify the various countries which are the source of the greige fabrics. The instant merchandise is assembled and finished in China for export to the United States. Because the instant merchandise was not wholly obtained or produced in China, the country of origin cannot be determined under 19 C.F.R. §102.21(c)(1).
Next, CBP must look to 19 C.F.R. §102.21(c)(2), which in turn directs us to look at 19 C.F.R. §102.21(e). According to 19 C.F.R. §102.21(e)(1), “the country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process”. In the case of the instant merchandise, the fabric making process occurred where the greige fabric was formed. See 19 C.F.R. 102.21(b)(2). Therefore, according to 19 C.F.R. 102.21(c)(2) and (e)(1), the country of origin for the instant merchandise is the same as the origin of the greige fabric. You state that the bolts of greige fabric are manufactured in several different countries, and these bolts are mixed together at the assembly plant in China. Therefore, each individual pillow or cushion may have a different country of origin, based on which bolt of cloth it was assembled from.
However, you allege that the country of origin of the instant merchandise is not controlled by 19 C.F.R. §102.21(c)(2). You argue that, because your suppliers are deliberately obscuring the country of origin of their greige fabrics, the country of origin of the pillows and cushions cannot be determined under 19 C.F.R. §102.21(c)(2). You cite several CBP Rulings in support of this argument.
In New York Ruling Letter (NY) N112936, dated July 15, 2010, CBP considered two different manufacturing scenarios for pillows and cushions. In the first scenario, the greige fabric for the outer covers was manufactured entirely in Taiwan, and shipped to China for assembly. The country of origin was found to be Taiwan, by operation of 19 C.F.R. §102.21(c)(2) and (e)(1). In the second scenario, the greige fabric for the top panel of the outer cover is manufactured in Taiwan, and the greige fabric for the bottom panel is manufactured in a country that is not Taiwan, such that the product is made deliberately from fabrics manufactured in two different countries. In this scenario, CBP held that 19 C.F.R. §102.21(c)(2) was inapplicable, because the fabric used to manufacture the article came from two different countries. CBP also held that a determination could not be made pursuant to 19 C.F.R. §102.21(c)(4), because the top and bottom pieces of the cover were equally important. Finally, CBP held that the country of origin of the articles would be the place where the final assembly occurred, pursuant to 19 C.F.R. §102.21(c)(5), because all other options had been eliminated.
In several other rulings you cite, CBP considered situations where the fabric which makes up the final product was sourced from two different countries, and found 19 C.F.R. §102.21(c)(2) inapplicable. See Headquarters Ruling Letter (HQ) 966517, dated January 9, 2004; HQ 959912, dated November 1, 1996; and HQ 958894, dated June 14, 1996.
The above-cited rulings share a common thread. In each ruling, CBP considered textile articles assembled from fabrics sourced specifically from two different countries. In addition, there was a finding that the fabric sourced from one country was no more important than the fabric sourced from another country. Based on these facts, CBP determined that the country of origin could not be determined under 19 C.F.R. §102.21(c)(2) or (c)(4), and was forced to proceed to 19 C.F.R. §102.21(c)(5). See also 19 U.S.C. 3592(b)(3). These rulings consider a different factual scenario than the instant merchandise, where a single pillow or cushion is manufactured from a single bolt of cloth, imported from a single unknown country. Therefore, NY N112936, HQ 966517, HQ 959912, and HQ 958894 are distinguishable from the instant matter.
In addition, you cite to HQ 560768, dated May 26, 1998, and HQ 561412, dated January 31, 2000, as support for the proposition that the unavailability of origin information for component parts of imported textile articles absolves the importer of marking a product in accordance with 19 C.F.R. §102.21(c)(2), and that such articles should then be determined by subsequent origin rules, including 19 C.F.R. §102.21(c)(5), supra. HQ 560798 and HQ 561412 pertained to the country of origin marking requirements for remanufactured photoreceptor cartridges, and were revoked by HQ H012926, dated March 31, 2009, which represents CBP’s current view on the marking requirements for the subject photoreceptor cartridges.
In HQ H012926, CBP determined that per 19 C.F.R. §102.11(d)(3), the country of origin of the remanufactured cartridges was the last country in which the goods underwent production. Initially, we note that HQ H012926 applies the general marking rules of 19 C.F.R. §102.11, not 19 C.F.R. §102.21, which states the rules for textile articles. Accordingly, the analogy between HQ H012926 and the instant matter is of limited utility, if any. Nevertheless, it is noteworthy that the conclusion in HQ H012926 to apply 19 C.F.R. §102.11(d)(3) resulted from a hierarchical application of 19 C.F.R. §102.11, not as a result of the fact that the origin of some of the used component parts of the cartridges was unknown. Moreover, we note that the component materials in the instant matter are “unknown” because the supplier has refused to provide the relevant origin information, which further differentiates the instant matter from the facts of HQ H012926. In light of the foregoing, neither HQ H012926 nor the rulings that it revoked are applicable here.
In conclusion, there is no authority to support the proposition that the requirements of 19 C.F.R. §102.21(c)(2) can be thwarted by a supplier who refuses to reveal their sources. In fact, the opposite is true. CBP notes that all importers must comply with the record keeping requirements of 19 U.S.C. §1508.
Furthermore, 19 C.F.R. §102.23(a) states, in pertinent part:
(a) Textile or apparel product manufacturer identification. All commercial importations of textile or apparel products must identify … the manufacturer of such products through a manufacturer identification code (MID) constructed from the name and address of the entity performing the origin-conferring operations pursuant to [19 C.F.R. §102.21 or §102.22] of this part, as applicable …
The country of origin for the instant merchandise is determined under 19 C.F.R. §102.21(c)(2) and (e)(1), based on the country where the greige fabric was formed. Plantation Patterns is required to identify the greige fabric manufacturer, pursuant to 19 C.F.R. §102.23(a). The fact that Plantation Pattern’s suppliers refuse to provide it with this information does not excuse it from compliance with CBP regulations.
HOLDING:
The pillows and cushions described in the above scenario are classified under heading 9404, HTSUS. If the fabric is cotton, they are classified under subheading 9404.90.10, 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: of cotton”. If the fabric is other than cotton, they are classified under subheading 9404.90.20, 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: Other”.
The country of origin for the instant merchandise is dependent on the country of origin of the specific bolt of greige fabric from which they are made, in accordance with 19 C.F.R §102.21(c)(2) and 19 C.F.R. §102.21(e)(1). The refusal of a fabric converter to identify their sources does not, by itself, excuse an importer from compliance with CBP regulations.
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 C.F.R. §177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. §177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 C.F.R. §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,
Monika Brenner, Chief
Valuation & Special Programs Branch