CLA-2-54:OT:RR:NC:N3:352
Michelle Musson
Summit Global Logistics
2B Silverwater Distribution Centre
4 Newington Road
Silverwater NSW 2128
Australia
RE: The tariff classification, country of origin and status under the United States-Australia Free Trade Agreement (UAFTA) of two woven fabrics, from Australia
Dear Ms. Musson:
In your letter dated May 28, 2021, on behalf of your client, Wilson Fabric, you requested a tariff classification ruling and status under the United States-Australia Free Trade Agreement (UAFTA) of two woven fabrics from Australia to be used in the manufacture of window furnishings. Two fabric styles, identified as Moma 7002 Translucent Black/Grey and Moma 7002 Translucent White, were submitted and sent for laboratory analysis.
Please note there are two previous rulings regarding the same merchandise. Our office previously ruled in N253554 that Moma 7002 did not qualify for preferential treatment under the UAFTA; however, this ruling addresses a different set of facts. In ruling N248609, the fabric style Moma 7002 was classified based on the description provided by the requestor and was not sent for laboratory analysis.
FACTS:
The U.S. Customs and Border Protection Laboratory (CBP Laboratory) has determined that style Moma 7002 Translucent Black/Grey is a woven fabric of jacquard weave construction that is composed wholly of textured polyester multifilament yarns of different colors. The fabric weighs 186 g/m2. You state that the fabric is impregnated with a stiffening resin, which the CBP Laboratory has confirmed is a type of acrylic polymer. This coating is not visible to the naked eye. You indicate the fabric will be imported in rolls of 300-centimeter widths.
The CBP Laboratory has determined that style Moma 7002 Translucent White is a woven fabric of jacquard weave construction that is composed wholly of textured polyester multifilament yarns. The fabric is unbleached and weighs 175.6 g/m2. You state that the fabric is impregnated with a stiffening resin, which the CBP Laboratory has confirmed is a type of acrylic polymer. This coating is not visible to the naked eye. You indicate the fabric will be imported in rolls of 300-centimeter widths.
For the two fabrics, you described the manufacturing operations as follows:
Polyester filament yarn is manufactured in the United States (U.S.).
Yarn is shipped to Australia.
Fabric is woven in Australia.
Resin is manufactured in Australia.
Fabric is impregnated with resin in Australia.
No additional processing is performed on these fabrics outside the U.S or Australia.
Fabric is exported directly from Australia to the U.S. in roll form.
ISSUES:
What is the classification, country of origin and status under the UAFTA of the subject merchandise?
CLASSIFICATION:
Note 2 to Chapter 59, Harmonized Tariff Schedule of the United States, (HTSUS), defines the scope of heading 5903, under which textile fabrics which are coated, covered, impregnated, or laminated with plastics are classifiable. In addition, it provides guidance on the classification of textile fabrics combined with plastics. Note 2 states in part that heading 5903, HTSUS, applies to:
(a) Textile fabrics, impregnated, coated, covered or laminated with plastics, whatever the weight per square meter and whatever the nature of the plastic material (compact or cellular), other than:
(1) Fabrics in which the impregnation, coating or covering cannot be seen with the naked eye (usually chapters 50 to 55, 58 or 60): for the purposes of this provision, no account should be taken of any resulting change in color;
(2) Products which cannot, without fracturing, be bent manually around a cylinder of a diameter of 7 mm, at a temperature between 15 C and 30 C (usually chapter 39);
(3) Products in which the textile fabric is either completely embedded in plastics or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of color (chapter 39);
(4) Fabrics partially coated or partially covered with plastic and bearing designs resulting from these treatments (usually chapters 50 to 55, 58 or 60); …
Although you state that the fabrics have been impregnated with an acrylic polymer, the coating is not visible to the naked eye. Therefore, the fabrics are not considered to be a coated textile fabric either for the purposes of classification in headings 5903 or 5907, HTSUS, as a coated fabric of textile, or as a plastic-coated textile of chapter 39.
Based on ruling N248609 you received for the same fabric, you suggest classification under 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 g/m2: Flat fabrics. This classification is not applicable; however, because CBP Laboratory analysis found that both fabrics weigh more than 170 g/m2.
The applicable subheading for style Moma 7002 Translucent Black/Grey, will be 5407.53.2060, 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 more than 170 grams per square meter. The general rate of duty is 12% ad valorem.
The applicable subheading for style Moma 7002 Translucent White, will be 5407.51.0060, 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: Unbleached or bleached: Weighing more than 170 grams per square meter. The general rate of duty is 14.9% 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.
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.
Based on the facts provided, the goods (Moma 7002 Translucent Black/Grey and Moma 7002 Translucent White) described above qualify for UAFTA preferential treatment, because they meet the requirements of HTSUS GN 28(b)(iii). The goods entered under 5407.53.2060 and 5407.51.0060 will therefore be entitled to a preferential rate of duty under the UAFTA 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: …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.
“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. The yarns of the subject fabrics were formed in the United States. The country of manufacture of the fabrics is Australia. Since the fabric was formed in Australia, and since according to the above rule (b)(2) there was an applicable tariff shift as a result of a fabric-making process in Australia, as per the terms of the tariff shift requirements, the country of origin is conferred in Australia.
HOLDING:
The applicable subheading for style Moma 7002 Translucent Black/Grey, will be 5407.53.2060, 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 more than 170 grams per square meter. The general rate of duty is 12% ad valorem.
The applicable subheading for style Moma 7002 Translucent White, will be 5407.51.0060, 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: Unbleached or bleached, Weighing more than 170 grams per square meter. The general rate of duty is 14.9% ad valorem.
Based on the facts provided, both fabric styles (Moma 7002 Translucent Black/Grey and Moma 7002 Translucent White) are eligible for UAFTA preferential treatment, because the goods meet the requirements of HTSUS GN 28(b)(iii). The fabrics will therefore be entitled to a preferential rate of duty under the UAFTA.
Pursuant to 19 CFR §102.21, the country of origin for marking purposes is Australia.
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.
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. 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 Nicole Rosso via email at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division