CLA-2-54:OT:RR:NC:N3:352
Leslie Araki
SST International
10415 S. La Cienega Blvd.,
P.O. Box 45347
Los Angeles, CA 90045
RE: The tariff classification, country of origin and status under the United States-Australia Free Trade Agreement (UAFTA) of one woven and one coated polyester fabric, from Australia
Dear Ms. Araki:
In your letter dated May 9, 2014, on behalf of Wilson Fabrics, you requested a ruling on the status under the UAFTA of two woven fabrics from Australia to be used in the manufacture of window blinds. We previously classified this merchandise in N248609, dated January 21, 2014.
FACTS:
Style Moma 7002 Translucent, consists of a jacquard woven fabric that is composed of 100 percent textured polyester filament yarns of different colors. You write that the fabric weighs 165 grams per square meter and will be imported as roll goods in widths of 286 centimeters.
Style Moma-Blockout consists of a jacquard woven fabric that is composed of 100 percent polyester man-made fibers. The posterior surface of this material has been visibly coated with a milky white substance consisting of titanium dioxide and calcium carbonate fillers suspended in an acrylic binder. This is considered to be a plastics material. You write that the fabric weighs 375 grams per square meter and will be imported as roll goods in widths of 286 centimeters.
For both fabrics, you provided the manufacturing information as follows:
Polyester filament yarn is extruded and formed in Taiwan.
Blockout coating is manufactured in Australia.
Flocking is from the United States.
Dye stuffs are from Australia.
Fabric is woven in Australia.
The coated fabric is coated in Australia.
No additional processing is performed on these fabrics outside Australia.
Fabric is exported directly from Australia to the U.S.
ISSUES:
What are the classification, country of origin and status under the UAFTA of the subject merchandise?
CLASSIFICATION:
The applicable subheading for Style Moma 7002 Translucent, will be 5407.53.2020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: other woven fabrics, containing 85 percent or more by weight of textured polyester filaments: of yarns of different colors, other, weighing not more than 170 grams per square meter: flat fabrics. The general rate of duty is 12% ad valorem.
The applicable subheading for Style Moma-Blockout, which you state is 53.45% by weight of plastics, and therefore not over 70 percent by weight of plastics, will be 5903.90.2500, HTSUS, which provides for textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: other: of man-made fibers, other: other. The general rate of duty is 7.5 % 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/.
UAFTA ELIGIBILITY – LAW AND ANALYSIS:
General Note (GN) 28(b), HTSUS, sets forth the criteria for determining whether a good is originating under the UAFTA. GN 28(b), HTSUS, states in pertinent part that:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UAFTA country under the terms of this note only if:
(i) the good is a good wholly obtained or produced entirely in the territory of Australia or of the United States, or both;
(ii) the good was produced entirely in the territory of Australia or of the United States, or both, and—
(A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note;
(B) the good otherwise satisfies any applicable regional value content requirement referred to in subdivision (n) of this note; or
(C) the good meets any other requirements specified in subdivision (n) of this note;
and such good satisfies all other applicable requirements of this note;
(iii) the good was produced entirely in the territory of Australia or of the United States, or both, exclusively from materials described in subdivision (b)(i) or (b)(ii) of this note; or
(iv) the good otherwise qualifies as an originating good under this note.
In addition, GN 28(c)(iii), HTSUS states that:
A good that has undergone production necessary to qualify as an originating good under this note shall not be considered to be an originating good if, subsequent to that production, the good undergoes further production or any other operation outside the territory of Australia or of the United States, other than unloading, reloading or any other operation necessary to preserve the good in good condition or to transport the good to the territory of Australia or of the United States.
As the goods contain non-originating materials, they would have to undergo an applicable change in tariff classification in order to meet the requirements of GN 28(b)(ii). We must refer to GN 28(n) for the specific classification changes required.
Style Moma 7002 Translucent - For goods classified in subheading 5407.53, GN 28(n)/54.3 requires:
A change to heading 5407 from any other chapter, except from headings 5106 through 5110, 5205 through 5206 or 5509 through 5510.
The yarn used to produce the fabric is manufactured in Taiwan; the fabric is woven in Australia. Since the polyester filament yarn used to produce the fabric would be classified in heading 5402, i.e. in the same chapter as the finished fabric, the required tariff shift from non-originating yarn to woven fabric would not be met.
Based on the facts provided, Style Moma 7002 Translucent is not eligible for UAFTA preferential treatment, because it does not meet the requirements of GN 28(b)(ii). This fabric will therefore not be entitled to a preferential rate of duty under the UAFTA.
Style Moma-Blockout - For goods classified in heading 5903, GN 28(n)/59.3 requires:
A change to headings 5903 through 5908 from any other chapter, except from headings 5111 through 5113, 5208 through 5212, 5310 through 5311, 5407 through 5408 or 5512 through 5516.
The yarn used to produce the fabric is manufactured in Taiwan; the fabric is woven in Australia. Since the polyester filament yarn used to produce the fabric would be classified in heading 5402, the required tariff shift from non-originating yarn (5402) to coated fabric (5903) would be met.
Based on the facts provided, Style Moma-Blockout is eligible for UAFTA preferential treatment, because it meets the requirements of GN 28(b)(ii). This fabric will therefore be entitled to the preferential rate of duty under the UAFTA upon compliance with all applicable laws, regulations, and agreements. The preferential rate of duty for 2014 is 3% ad valorem.
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: The country of origin of a good classifiable under heading 5807 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
5901-5903: (2) …a change to heading 5901 through 5903 from any other heading, including a heading within that group, except from heading 5007, 5111 through 5112, 5208 through 5311, 5407 through 5408, 5512 through 5516, 5803,5806, 5808, and 6002 through 6006 and provided that the change is the result of a fabric-making process.
As both fabrics were woven in Australia, country of origin is conferred in Australia.
HOLDING:
The applicable subheading for Style Moma 7002 Translucent, will be 5407.53.2020, HTSUS, which provides for woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: other woven fabrics, containing 85 percent or more by weight of textured polyester filaments: of yarns of different colors, other, weighing not more than 170 grams per square meter: flat fabrics. The general rate of duty is 12% ad valorem.
The applicable subheading for Style Moma-Blockout will be 5903.90.2500, HTSUS, which provides for textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: other: of man-made fibers, other: other. The general rate of duty is 7.5% ad valorem.
Based on the facts provided, Style Moma 7002 Translucent is not eligible for UAFTA preferential treatment, because it does not meet the requirements of HTSUS GN 28(b)(ii). This fabric will therefore not be entitled to a preferential rate of duty under the UAFTA.
Based on the facts provided, Style Moma-Blockout is eligible for UAFTA preferential treatment, because it meets the requirements of GN 28(b)(ii). This fabric will therefore be entitled to the preferential rate of duty under the UAFTA upon compliance with all applicable laws, regulations, and agreements. The preferential rate of duty for 2014 is 3% ad valorem.
Pursuant to 19 CFR §102.21, the country of origin for marking purposes is Australia.
This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. 19 CFR 177.9(b)(1) is noted. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by Customs.
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
Director
National Commodity Specialist Division