CLA-2-54:OT:RR:NC:N3:352
Mr. Kenneth A. Lindemann
The Denali Company, LLC
43 West Front Street, Suite 11
Red Bank, New Jersey 07701
RE: The tariff classification, country of origin and status under the United States - Korea Free Trade Agreement (UKFTA) of 100% acetate dyed satin-woven fabric from Korea.
Dear Mr. Lindemann:
In your letter dated March 14, 2014, you requested a ruling on the status of a 100% acetate heavy satin fabric from Korea, Style JQ-4040A, under the United States-Korea Free Trade Agreement (UKFTA). One selvage-to-selvage sample of the fabric was provided.
FACTS:
Style JQ-4040A is a woven fabric, dyed a single uniform color. According to the information provided as well as visual examination of the sample, this fabric is of satin weave construction and composed of 100% acetate filament yarns. The fabric will be used to manufacture award ribbons in the United States, and will be imported in assorted solid colors, in nominal widths of 60 inches. The weight of the finished fabric is 254 g/m2.
The manufacturing operations are as follows:
100% acetate yarns are produced in U.S. and exported to Korea.
The fabric is woven in South Korea of the U.S. yarns.
The fabric is dyed and finished in South Korea.
The fabric is exported directly to the U.S.
ISSUES:
What are the classification, status under the UKFTA, and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for woven fabric Style JQ-4040A will be will be 5408.22.9060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for woven fabrics of artificial filament yarn, including woven fabrics obtained from materials of heading 5405: other woven fabrics, containing 85 percent or more by weight of artificial filament or strip or the like: dyed, other, weighing more than 170 g/m2. The duty rate will be 14.9 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/.
UKFTA ELIGIBILITY – LAW AND ANALYSIS:
General Note 33, HTSUS, sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, (19 U.S.C. § 1202) states that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and
(o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if-
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of the United States or both, and -
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable
regulations; or
(iii) the good is produced entirely in the territory of Korea or the United States,
or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States.
For goods classified in heading 5408, General Note 33(o)/54.4 requires:
A change to heading 5408 from subheadings 5403.10, 5403.31 through 5403.32, 5403.41 or any other chapter, except from headings 5106 through 5110, 5205 through 5206 or 5509 through 5510.
The yarn is manufactured in the United States. The origin of the dyes and chemicals used in finishing are unknown; however, these would meet the required tariff shift.
Based on the facts provided, the goods described above are eligible for UKFTA preferential treatment, because they meet the requirements of HTSUS General Note 33(b)(ii). The goods will therefore be entitled to a Free rate of duty under the UKFTA 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:
5407-5408: (2) …a change to heading 5407 through 5408 from any heading outside that group, provided that the change is the result of a fabric-making process.
As the fabric is wholly woven in Korea, country of origin is conferred in Korea.
HOLDING:
The applicable subheading for fabric Style JQ-4040A will be 5408.22.9060, HTSUS, which provides for woven fabrics of artificial filament yarn, including woven fabrics obtained from materials of heading 5405: other woven fabrics, containing 85 percent or more by weight of artificial filament or strip or the like: dyed, other, weighing more than 170 g/m2. The duty rate will be 14.9 percent ad valorem.
Based on the facts provided, we find that fabric Style JQ-4040 from Korea is eligible for duty free treatment as provided for in the United States-Korea Free Trade Agreement, because it meets the requirements of HTSUS General Note 33(b)(ii). The goods will qualify for a Free rate of duty under the UKFTA upon compliance with all applicable laws, regulations, and agreements.
Pursuant to 19 CFR §102.21, the country of origin for marking purposes is Korea.
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 Maribeth Dunajski at Maribeth.Dunajski @CBP.DHS.gov.
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division