CLA-2-94:OT:RR:NC:N4:433
Humberto F. Orduno
U.S. Customs Broker
R.L. Jones Customhouse Broker
8830 Siempre Viva Road, Suite 100
San Diego, CA 92154
RE: The tariff classification of decorative pillows; applicability of the North American Free Trade Agreement (NAFTA) eligibility for the decorative pillows; and country of origin of the decorative pillows.
Dear Mr. Orduno:
In your letter dated July 3, 2017, on behalf of Spencer N Enterprises, you requested a tariff classification ruling. No illustrative literature or photographs were presented of the decorative pillows. For purposes of this ruling “feathers” will not be considered of down, either from goose or duck.
Heading 9404 of the Harmonized Tariff Schedule of the United States (HTSUS) in pertinent part reads “articles of bedding and similar furnishings” and as such, we are of the opinion that decorative accent pillows are captured within the term “similar furnishings,” provided those types of pillows are not used as pin cushions, not used as toys, and not used for some other purpose over that of bedding and similar furnishings. See Infantino, LLC v. United States, Slip Op. 14-155, dated December 24, 2014 and New York Ruling N281477 dated December 12, 2016.
Scenario 1 – describes decorative pillows constructed from polyester shells (containing a zipper closure) of Chinese origin sent to Mexico for stuffing with inserts of feathers of Chinese origin. The only processing in Mexico is the stuffing of the feathers in the polyester shells and closing the zipper. Both the polyester shells (China) and inserts of feathers (China) are sent In-bond to Mexico. Scenario 2 – describes decorative pillows (no attached closure) constructed from a polyester shells of Chinese origin sent to Mexico for stuffing with polyester fiber of Chinese origin. In Mexico the polyester fiber is blown into the polyester shells and the shells are finished by sewing the opening closed. Both the polyester shells (China) and polyester fiber (China) are sent In-Bond to Mexico.
Scenario 3 – describes decorative pillows constructed from polyester shells (containing a zipper closure) of Chinese origin sent to Mexico for stuffing with inserts of feathers of Chinese origin. The only processing in Mexico is the stuffing of the feathers in the polyester shells and closing the zipper. We note that the only difference between Scenario 1 and Scenario 3 is that the polyester shells (China) in Scenario 3 entered the United States before being sent to Mexico versus in Scenario 1 both the polyester shells (China) and inserts of feathers (China) were sent together into Mexico via In-bond.
Scenario 4 – describes decorative pillows (no attached closure) constructed from a polyester shells of Chinese origin sent to Mexico for stuffing with polyester fiber of Chinese origin. In Mexico the polyester fiber is blown into the polyester shells and the shells are finished by sewing the opening closed. We note that the only difference between Scenario 2 and Scenario 4 is that the polyester shells (China) in Scenario 4 entered the United States before being sent to Mexico versus in Scenario 2 both the polyester shells (China) and polyester fiber (China) were sent together into Mexico via In-bond.
Scenario 5 – describes decorative pillows constructed from cotton shells (containing a zipper closure) of Indian (India) origin sent to Mexico for stuffing with inserts of feathers of Chinese origin. The only processing in Mexico is the stuffing of the feathers in the cotton shells and closing the zipper. Both the cotton shells (India) and feathers (China) are sent In-bond to Mexico.
Scenario 6 – describes decorative pillows (no attached closure) constructed from a cotton shells of Indian (India) origin sent to Mexico for stuffing with polyester fiber of Chinese origin. In Mexico the polyester fiber is blown into the cotton shells and the shells are finished by sewing the opening closed. Both the cotton shells (India) and polyester fiber (China) are sent In-Bond to Mexico.
Scenario 7 – describes decorative pillows constructed from cotton shells (containing a zipper closure) of Indian (India) origin sent to Mexico for stuffing with inserts of feathers of Chinese origin. The only processing in Mexico is the stuffing of the feathers in the cotton shells and closing the zipper. We note that the only difference between Scenario 5 and Scenario 7 is that the cotton shells (India) in Scenario 7 entered the United States before being sent to Mexico versus in Scenario 5 both the cotton shells (India) and feathers (China) were sent together into Mexico via In-bond.
Scenario 8 – describes decorative pillows constructed from cotton shells (no attached closure) of Indian (India) origin sent to Mexico for stuffing with polyester fiber of Chinese origin. In Mexico the polyester fiber is blown into the cotton shells and the shells are finished by sewing the opening closed. We note that the only difference between Scenario 6 and Scenario 8 is that the cotton shells (India) in Scenario 8 entered the United States before being sent to Mexico versus in Scenario 6 both the cotton shells (India) and polyester fiber (China) were sent together into Mexico via In-bond.
You suggest that the classification of the decorative pillows is subheading 9404.90.1000 for the pillows having shells made of cotton and 9404.90.2000 for the pillows having shells of polyester. We agree with you on the pillows having shells of cotton, with or without feathers, or filled with polyester fiber, classification 9404.90.1000 (cotton) and the pillows having shells of polyester, with or without feathers, or filled with polyester fiber, 9404.90.2000 (polyester); both types of decorative pillows are classified based on their outer-shell material.
In Pillowtex Corporation v. United States, No. 98-1227 decided March 16, 1999, the United States Court of Appeals, Federal Circuit, found that the essential character of [down comforters] with cotton shells was the “insulated quality” of the down filling, and not the cotton shells. This is not the case of non-down feathers that do not provide insulating qualities, but rather are used mainly for support and durability. Accordingly, non-down feather pillows are classified based on their outer-shell material, such as, the case of Scenario 1, Scenario 3, Scenario 5 and Scenario 7.
The applicable subheading for the decorative pillows having cotton shells stuffed with feathers or polyester fiber, scenarios 5 through 8, will be 9404.90.1000, 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: Other: Pillows, cushions and similar furnishings: Of cotton.” The rate of duty will be 5.3% ad valorem.
The applicable subheading for the decorative pillows having polyester shells stuffed with feathers or stuffed with polyester fiber, Scenarios 1 through 4, will be 9404.90.2000, 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: Other: Pillows, cushions and similar furnishings: Other.” The rate of duty will be 6% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.
NAFTA Preference:
The rules for determining whether the decorative pillows are an “originating good” of Mexico and thus eligible for preferential tariff treatment under the provisions of the NAFTA Act are provided for in General Note 12 of the HTSUS, which provides, in relevant part, as follows:
(a) Goods in the territory of a party to the NAFTA are subject to duty as provided therein. For the purposes of this note –
(a) (ii) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Mexico under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (whether or not the goods are marked) …, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn followed by the symbol “MX” in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Implementation Act.
(b) For 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 [de minimis provision], 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....
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials....
Thus, by operation of GN 12, the eligibility of an article for NAFTA preferential treatment is predicated upon a finding that the goods are originating in the territory of a NAFTA party under GN 12 (b) and that they are goods of Canada or Mexico under the NAFTA Marking Rules.
The components of the decorative pillows are the outer-shells of cotton or outer-shells of polyester, and the inserts of feathers or polyester fiber. Neither the outer-shells of cotton or outer-shells of polyester fabric, nor the inserts of feathers or polyester fiber are originating material, because those materials are not produced in the NAFTA parties of the United States, Mexico or Canada. Since the outer-shells of cotton are origin India and the outer-shells of polyester are origin China, the decorative pillows cannot be wholly produced in the territory of a NAFTA party. Therefore, the pillows qualify for NAFTA treatment only if the provisions of General Note 12 (b) (ii) (A) are met; i.e., if the merchandise is transformed in the territory of Mexico so that the non-originating materials undergo a change in tariff classification or satisfy the rules set forth in subdivisions (r), (s), and (t) of this note.
Because the decorative pillows are classified in subheading 9404.90, HTSUS, we apply the tariff shift rule for that subheading. General Note 12(t)/94.7 states “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 outer shell fabrics whether cotton or polyester are classifiable in heading 6307, HTSUS, the feather are classifiable in heading 0505, HTSUS, and the polyester fiber fill is classified in heading 5503, HTSUS. The tariff shift rule for subheading 9404.90 is satisfied because the [non-originating materials] are outside the excluded headings for the rule above. Therefore, the decorative pillows meet the tariff shift requirement, and qualify as NAFTA originating goods.
However, to receive the NAFTA preferential duty rate for goods from Mexico, the decorative pillows must be considered a good of Mexico under the NAFTA Marking Rules (Part 102, Customs Regulations). Decorative pillows classified in subheading 9404.90.10, HTSUS (outer-shells of cotton) are subject to the rules of origin for textile and apparel products set forth in 19 CFR 102.21 – see 102.20 “Chapter 94 Note” and 102.21 “subheading 9404.90” governing note, and decorative pillows classified in subheading 9404.90.20, HTSUS (outer-shells of polyester) are subject to the rules of origin set forth in 19 CFR 102.20, for non-textile and apparel products – see 102.20, “subheadings 9404.30-9404.90” governing note.
The “Rule of Origin” for decorative pillows of cotton, scenarios 5 through 8, set forth in 102.21, 9404.90 reads: “Except for goods of subheading 9404.90 provided for in paragraph (e) (2) of this section, 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.”
Applying the “Rule of Origin” set forth in 102.21, 9404.90, we find that the only fabric making process for scenarios 5 through 8 occurs in India, and as such the country of origin for the cotton decorative pillows is India.
The “Rule of Origin” for decorative pillows of polyester, scenarios 1 through 4, set forth in 102.20, 9404.30-9404.90 reads: “A change to down-and/or feather-filled goods classified in subheading 9404.30 through 9404.90 from any other heading; or For all other goods classified in subheading 9404.30 through 9404.90, a change from any other heading, except from heading 5007, 5111, through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5602 through 5603, 5801 through 5804, 5806, 5809 through 5810, 5901, 5903 through 5904, 5906 through 5907, or 6001 through 6006, or subheading 6307.90.”
Regardless of the “Rule of Origin” set forth in 102.20, 9404.30-9404.90, it is our opinion in scenario 1 and scenario 3 that the pillows having polyester outer-shells and filled/stuffed with inserts of feathers and closed by means of zippers are “Non-qualifying operations” in accordance with 102.17; the processing operation is of “simple packing” of the filler material and of “minor processing” of 102.1 (m) (6) “Putting up in measured doses, packing, repacking packaging and repackaging,” thereby completing the finished decorative pillows. The country-of-origin for the decorative polyester pillows, simply packed in measured amounts in Mexico, is China.
Regardless of the “Rule of Origin” set forth in 102.20, 9404.30-9404.90, it is our opinion in scenario 2 and scenario 4 that the pillows having polyester outer-shells and filled/stuffed with polyester fiber and sewn closed on one side are “Non-qualifying operation” in accordance with 102.17; the processing operation of stuffing and closing one end is merely “a change to end-use,” decorative pillow shells to stuffed decorative pillows, as well as “simple packing” of the filler material and of “minor processing” of 102.1 (m) (6) “Putting up in measured doses, packing, repacking packaging and repackaging. The country-of-origin for the decorative polyester pillows, with merely a change in end use and simply packed in measured doses in Mexico, is China.
We further observe that the NAFTA preference override contained in 19 CFR 102.19 (a) states, in relevant part, “… if a good which is originating within the meaning of §181.1 (q) [referring to General Note 12, HTSUS] of this chapter is not determined under §102.11 (a) or (b) or §102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin has been completed and signed for the good.” Unlike Headquarters ruling HQ 963233 dated December 13, 2000, in which fabric of Korean origin was cut, formed and sewn into pillow shells (“saks”) of Canadian origin, undergoing production beyond minor processing, we find that the processing operations in Mexico are of non-qualifying operations and do not exceed minor processing, and therefore the decorative pillows are not entitled to the NAFTA “MX” preferential duty rate.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division