CLA-2-63:OT:RR:NC:N3:351
Ms. Annette Forsberg
240-70 Shawville Boulevard S.E. Suite 188
Calgary, Alberta
Canada T2Y 2Z3
RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA) of a textile cell phone strap from Canada, Article 509
Dear Ms. Forsberg:
In your original letter dated June 29, 2018, and your follow up letter dated July 23, 2018, you requested a tariff classification, marking and the status of a cell phone strap from Canada under the NAFTA. A sample of the cell phone strap was submitted. The sample was examined and will be returned.
FACTS:
The cell phone strap is made up from a narrow woven elastic fabric composed of manmade fibers. Two metal clamps are attached onto both ends of the fabric, and adhesive tapes with protective liners are affixed onto the clamps. The protective liner is removed by the consumer, revealing the adhesive portion which allows the strap to be placed onto the back of a cell phone or mobile device. This allows the user to multitask while continuing to hold and use a cell phone or mobile device. The cell phone strap is produced from the following raw materials:
Narrow woven elastic fabric from China Metal clamps from China
Adhesive tapes from China
CLASSIFICATION: The cell phone strap is a composite good that consists of several components, and each of those components are classified in several different headings. Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedules covers all the components of the subject cell phone strap in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. Moreover because there is no specific heading, and it is an article composed of a textile fabric it meets the definition of a “made up” article according to the terms of Note 7 to Section XI, HTSUS. Therefore, in accordance with GRI 3(b), it is the opinion of this office that the textile component, the narrow woven elastic fabric imparts the essential character of the article and thus determines the classification. The applicable tariff provision for the textile cell phone strap will be 6307.90.9889, HTSUS which provides for other made up textile articles, other. The rate of duty will be 7 percent 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. You state that the manufacturing operations for the cell phone strap are as follows: Production of the cell phone strap takes place at a facility in Canada. The narrow woven elastic fabric is cut into three inch long pieces. Metal clamps are attached to both ends of the elastic fabric by a clamping tool to ensure that both ends of the elastic fabric are securely placed inside the clamps. Two pieces of double-sided adhesive tape are affixed onto the metal clamps. The cell phone strap is fully assembled and will be sealed in a plastic blister package to be shipped directly to the United States from Canada.
NAFTA - LAW AND ANALYSIS: General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that 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 (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because-- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts, provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. For goods classified in heading 6307, General Note 12/63.4 requires: A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Chapter 63: Chapter rule 1: For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. The component that determines the classification of the good is the narrow woven manmade elastic fabric classified under heading 5806, HTSUS. The fabric is said to be formed in China, and imported into Canada where it is being and assembled in to the product, cell phone strap classified under heading 6307, HTSUS. Based on the facts provided, the good described above will qualify for NAFTA preferential treatment, because it has met the requirements of HTSUS General Note 12(t)63.4. The cell phone strap will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. COUNTRY OF ORIGIN - LAW AND ANALYSIS: Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Paragraph (c)(1) states, “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.” As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable. Paragraph (c)(2) states, “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 of the foreign materials 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:” Paragraph (e) in pertinent part states, The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:
6307.90 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
Since the fabric used in making the cell phone strap was formed in China, the strap does not meet the terms of the tariff shift requirement of 19 C.F.R. 102.21. However, the NAFTA Preference Override set forth in 19 CFR 102.19 is applicable to the subject merchandise. Specifically, 19 CFR 102.19(a) states: “…if a good which is originating within the meaning of 181.1(q) of this chapter [the tariff shift under General Note 12, HTSUS] is not determined under …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.”
The cell phone strap was cut to shape and assembled in Canada and qualifies for NAFTA treatment according to General Note 12/63.4, HTSUS. Therefore, with a completed and signed Certificate of Origin, the good may be marked as a product of Canada. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).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 Adleasia Lonesome via email at [email protected]. Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 90 K Street, N.E. – 10th floor, Washington, DC 20229-1177.
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division