CLA-2-65:OT:RR:NC:N3:358
Mr. Steve Story
Apex Logistics International Inc.
1884 Petersburg Rd.
PO Box 328
Hebron, KY 41048
RE: The tariff classification and country of origin of a knit hat; 19 CFR 102.21(c)(4)
Dear Mr. Story:
In your letter dated October 29, 2019, you requested a tariff classification on behalf of your client, Style Fashion Vietnam Co. Ltd. The samples will be retained for training purposes.
FACTS:
Style CSBVN-1000 is a knit unisex beanie-style hat. In your letter you indicate the hat is constructed of a knit fabric composed of 100 percent acrylic yarns.
Your submission describes the manufacturing process for style CSBVN-1000. The beanie hats consist of a tubular knit fabric and sewing thread manufactured in China. A sample of the tubular knit fabric and thread (in black) was submitted to this office. The knit fabric and thread from China are sent to Vietnam where the fabric is cut, sewn and shaped into the final product. A sample of the completed article (in black) was also provided.
ISSUE:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for style CSBVN-1000 will be 6505.00.6090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric... Other: Other: Of man-made fibers: Knitted or crocheted or made up from knitted or crocheted fabric: Not in part of braid… Other: Other: Other." The rate of duty will be 20 cents per kilogram plus 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 the World Wide Web at https://hts.usitc.gov/current.
COUNTRY OF ORIGIN:
You also requested a country of origin determination. 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at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996.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 CFR 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.” Since 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:
HTSUS Tariff shift and/or other requirements
6505.00 (4) For any other good, if the good does not consist of two or more components, a change to goods of subheading 6505.00, other than hair-nets, from any other heading, except from heading 5007, 5111 through 5113, 5208 through 5212, 5407 through 5408, 5512 through 5516, 5602 through 5603, 5609, 5801 through 5804, 5806, 5808 through 5811, 5903, 5906 through 5907, and 6001 through 6006, and provided that the change is the result of a fabric-making process.
The term “fabric-making process” is defined in paragraph (b)(2) of Section 102.21 as:
… any manufacturing operation that begins with polymers, fibers, filaments (including
strips), yarn, twine, cordage, rope, or fabric strips and results in a textile fabric.
Section 102.21(e) states that merchandise classifiable under 6505.00 composed of fabric of headings 6001 through 6002 is excepted from the tariff shift rule. Accordingly, as the hat does not meet tariff shift requirements, Section 102.21(c)(2) is inapplicable.
Section 102.21(c)(3) states:
Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.
The term “wholly assembled” is defined in paragraph (b)(6) of Section 102.21 as:
… used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as “wholly assembled” in a single country, territory, or insular possession.
As the subject merchandise is not knit to shape and there is only one component, Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) states:
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.
In the case of style CSBVN-1000, the fabric making process constitutes the most important assembly or manufacturing process. Accordingly, the country of origin of the hat is China.
SECTION 301 MEASURES:
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 6505.00.6090, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 6505.00.6090, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
HOLDING:
The country of origin of the knit hats is China.
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, 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 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.
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 Katherine Souffront at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division