CLA-2-62:OT:RR:NC:N3:348
Ms. Kay Morrell
JC Penney
6501 Legacy Dr., MS 2316
Plano, TX 75024
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a unisex jacket from Mexico; General Note 12(b)(ii)(A); 19 CFR 102.21(c)(2); Article 509
Dear Ms. Morrell:
In your letter dated March 1, 2012, you requested a ruling on the status of a unisex jacket from China and Mexico under the NAFTA.
The submitted item, Sample A, is a unisex jacket comprised of spunbond polyethylene fabric which is laminated or coated with plastic. The jacket features: a stand-up collar, full front opening with zipper closure, two side seam pockets, knit cuffs and knit waistband.
It is your opinion that the unisex garment would be classified under heading 6210.40.3000 of the Harmonized Tariff Schedule of the United States, (HTSUS). We disagree with your proposed classification.
Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be according to the terms of the headings and any relative section or chapter notes.
The nonwoven jacket is more specifically described in subheading 6210.10, HTSUS, which provides for “Garments made up of fabrics of heading 5602, 5603, 5903, 5906 or 597: Of fabrics of heading 5602 and 5603” than the provisions of subheading 6210.30.70, HTSUS, which provides “For other garments, of the type described in subheadings 6202.11 to 6202.19, other, having an outer surface impregnated, coated, covered or laminated with rubber or plastic materials which completely obscures the underlying fabric.”
The applicable tariff provision for Sample A will be 6210.10.9040, Harmonized Tariff Schedules of the United States, (HTSUS), which provides for which provides for "Garments, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907: Of fabrics of heading 5602 or 5603: Other: Other: Other, Other." The rate of duty will be 16 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 http://www.usitc.gov/tata/hts/.
You have provided two scenarios for manufacturing. In your first scenario, you have requested a determination under the NAFTA. In your second scenario, you have inquiry whether or not the garment would be eligible for a reduced rate in duty for the use of U.S. fabric.
Scenario 1
The nonwoven fabric is manufactured in the U.S. from U.S. fibers. The fabric is an originating material.
The fabric is shipped from the U.S. to Mexico. In Mexico, the fabric is cut, sewn and assembled into the garment.
The zipper is a nonoriginating material.
The sewing thread is manufactured in the U.S. or Mexico.
The knit collar, cuffs and waistband are non-originating materials.
The finished garment is shipped directly from Mexico to the U.S.
Scenario 2
The nonwoven fabric is manufactured in the U.S. from U.S. fibers.
The fabric is shipped from the U.S. to China. In China, the fabric is cut, sewn and assembled into the garment.
The zipper is a nonoriginating material.
The sewing thread is manufactured in the U.S. or Mexico.
The knit collar, cuffs and waistband are non-originating materials.
The finished garment is shipped directly from China to the U.S.
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.
Chapter 62, Chapter rule 3, states in pertinent part:
For purposes of determining whether a good of this chapter is originating, 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 for Sample A is the nonwoven fabric.
For all styles classified in heading 6210, GN 12/62.32C requires:
A change to subheadings 6208 through 6210 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 6006, provided that the good is both sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
The fabric, for Scenario 1, does meet the terms of the tariff shift rule. The good will be both sewn and assembled in Mexico.
Based on the facts provided, Sample A, manufactured as Scenario 1, qualifies for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods 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:
HTSUS Tariff shift and/or other requirements 6210:
(1) If the good consist of two or more component parts, a change to an assembled good of heading 6210 through 6212 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.
For Scenario 1, the garment is made of two or more component parts and is cut, sewn and assembled in Mexico. Sample A, manufactured as Scenario 1, meets the terms of the tariff shift requirement of 19 C.F.R. 102.21, country of origin is conferred in Mexico.
Regarding Scenario 2, Sample A would not be eligible for any preferential treatment. The garment would be classified and assessed duty as any other standard importation from China.
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 this ruling, contact National Import Specialist Rosemarie Hayward at (646) 733-3064.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division