CLA-2-60:OT:RR:NC:N3:352
Brett Ian Harris
Roll & Harris LLP
2001 L Street NW, Suite 500
Washington, D.C. 20036
RE: The tariff classification and Tariff Preference Level Eligibility under United States-Mexico-Canada Agreement (USMCA) of five double knit fabrics from Mexico
Dear Mr. Harris:
In your letter dated October 11, 2021, you requested a tariff classification ruling, on behalf of your client, Innofa USA LLC (“Innofa”). You also requested that the ruling address eligibility of the goods under the United States-Mexico-Canada Agreement (USMCA) Tariff Preference Levels (TPL). Five sample swatches were provided and sent for laboratory analysis. The samples will be retained for reference purposes.
FACTS:
U.S. Customs and Border Protection Laboratory (CBP Laboratory) has determined that style WC005 21606 is a double knit fabric with laid-in filling yarns between the two layers, which were inserted during the knitting process. The fabric is composed wholly of synthetic man-made fibers of yarns of different colors, of which 79.9 percent is polyester and 20.1 percent is polyethylene. The fabric weighs 303.1 g/m2.
CBP Laboratory has determined that style WC006 21817 is a double knit fabric with laid-in filling yarns between the two layers, which were inserted during the knitting process. The fabric is composed wholly of synthetic man-made fibers of yarns of different colors, of which 86 percent is polyester and 14 percent is polyethylene. The fabric weighs 342.4 g/m2.
CBP Laboratory has determined that style V085 21529 is a double knit fabric with laid-in filling yarns between the two layers, which were inserted during the knitting process. The fabric is composed wholly of polyester yarns of different colors. The fabric weighs 304.8 g/m2.
CBP Laboratory has determined that style V085 21567 is a double knit fabric with laid-in filling yarns between the two layers, which were inserted during the knitting process. The fabric is composed wholly of polyester yarns of different colors. The fabric weighs 301.91 g/m2.
CBP Laboratory has determined that style GA458 21621D is double knit fabric with laid-in filling yarns between the two layers, which were inserted during the knitting process. The fabric is composed wholly of synthetic man-made fibers of yarns of different colors, of which 98.8 percent is polyester and 1.2 percent is elastomeric. The fabric weighs 535.5 g/m2.
According to the information provided, all five fabric styles will be knit in Mexico from yarns and fibers from the United States, China, India, Mexico and Indonesia. The fabrics will be imported in rolls of 88 to 90-inch widths and will be used as mattress ticking.
ISSUE:
What is the classification and the eligibility of the fabric under USMCA Tariff Preference Levels (TPL)?
CLASSIFICATION:
The applicable subheading for the five fabric styles, WC005 21606, WC006 21817, V085 21529, V085 21567 and GA458 21621D will be 6006.33.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other knitted or crocheted fabrics: Of synthetic fibers: Of yarns of different colors: Of double knit or interlock construction: Of polyester. The applicable rate of duty will be 10% 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.
TARIFF PREFERENCE LEVELS:
Goods entered into the commerce of the United States from Mexico and Canada which are considered “originating” goods from those countries are granted preferential tariff treatment under USMCA. Additionally, specified textile and apparel goods imported into the U.S. from Canada or Mexico which are not “originating” goods may nevertheless be granted the same preferential duty rate tariff as originating goods, up to specific annual quantitative TPLs. Once a TPL applicable to a USMCA country’s exports to another USMCA country has been reached, any further exports of goods of that TPL category to the same USMCA country during that year may not be accorded USMCA preferential tariff treatment, but rather will be subject to duty at the normal trade relations rate. Consequently, a TPL is a type of tariff-rate quota. Chapter 98, Subchapter XXIII, U.S. Note 11(b)(ii)(B) provides,
This note and subheadings 9823.52.01 through 9823.53.06, inclusive, apply to certain textile and apparel goods of Mexico and Canada that are not originating goods under the terms of general note 11 to the tariff schedule, however, that are eligible for special tariff treatment as provided for herein. From July 1, 2020 through December 31, 2020, in 2021 and in successive years thereafter, the rate of duty provided for in subheadings 9823.52.01 through 9823.53.06 in the "Special" subcolumn of rates of duty 1 followed by the symbol "(S+)" shall apply to certain textile and apparel goods of Mexico and Canada as defined by this note in lieu of the duty rate set forth in the general subcolumn in the permanent subheadings enumerated below. The merchandise processing fee shall not apply to goods properly entered under this note and subheadings.
For purposes of this note, the term "SME" means square meter equivalent as determined in accordance with the conversion factors set out in Annex 6-B of Chapter 6 of the USMCA.
(b) The rate of duty in the "special" subcolumn of column 1 followed by the symbol "S+" in parentheses in subheadings 9823.53.01 through 9823.53.06 shall apply to goods of Mexico described in a provision of this subdivision and this subchapter and that qualify to be marked as a good of Mexico pursuant to U.S. law, without regard to whether the good is marked.
(ii) Subheading 9823.53.03 and the rate of duty in the "special" subcolumn of column 1 followed by the symbol "S+" shall apply to cotton or man-made fiber fabric and cotton or man-made fiber made-up textile goods of chapters 52 through 55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 of the tariff schedule up to 22,800,000 SME for the period from July 1, 2020 through December 31, 2020 and in each calendar year thereafter.
(B) 9823.53.05 and the rates of duty in the "special" subcolumn of column 1 followed by the symbol "S+" shall apply to goods of chapter 60 or of subheadings 6302.10, 6302.40, 8303.12, 6303.19, 6304.11 or 6304.91 of the tariff schedule entered in an aggregate quantity not to exceed 18,000,000 SME for the period from July 1, 2020 through December 31, 2020, inclusive, and in each calendar year thereafter.
Additionally, Chapter 98, Subchapter XXIII, U.S. Note 11(b)(ii)(C) provides,
C) Subheadings 9823.53.03 through 9823.53.05 shall apply to such cotton or man-made fiber fabric and cotton or man-made fiber made-up textile goods provided for in chapters 52 through 55 (excluding goods containing 36% or more by weight of wool or fine animal hair), 58, 60 and 63 are woven or knit in Mexico from yarn produced or obtained outside the territory of one of the USMCA countries or yarn produced in the territory of one of the USMCA countries from fiber produced or obtained outside the territory of one of the USMCA countries, or knit in the territory of Mexico from yarn spun in the territory of one of the USMCA countries from fiber produced or obtained outside the territory of one of the USMCA countries, and to goods of subheading 9404.90 that are finished and cut and sewn or otherwise assembled from fabrics of subheadings 5208.11 through 5208.29, 5209.11 through 5209.29, 5211.11 through 5211.20, 5212.11, 5212.12, 5212.21, 5212.22, 5407.41, 5407.51, 5407.71, 5407.81, 5407.91, 5408.21, 5408.31, 5512.11, 5512.21, 5512.91, 5513.11 through 5513.19, 5514.11 through 5514.19, 5516.11, 5516.21, 5516.31, 5516.41 or 5516.91 produced or obtained outside the territory of one of the USMCA countries and that meet the other applicable conditions for preferential tariff treatment under general note 11 to the tariff schedule.
While subheading 9823.53.05, HTSUS, does apply to goods of subheading 6006.33, HTSUS, in order for the fabrics to be dutiable at the USMCA tariff rate, based on the TPL, three conditions must be met. First, the good must meet the requirements of the TPL definition found in Chapter 98, Subchapter XXIII, U.S. Note 11, HTSUS, as provided above; second, the good must be accompanied by a Certificate of Eligibility in proper form as provided under Annex 6-A of the USMCA; and third, the yearly amount allowed under the TPL must not have been filled prior to the presentation of the Certificate of Eligibility. If any of these three conditions are not met then the good does not qualify under the TPL.
The double knit fabrics are knit in Mexico from yarns and fibers from the United States, China, India, Mexico and Indonesia. Therefore, the subject fabrics meet the first requirement of the TPL in that they qualify under the appropriate definitions of Chapter 98, Subchapter XXIII, U.S. Note 11, HTSUS.
In order to meet the second requirement, the goods must be accompanied by a Certificate of Eligibility in proper form as provided under Annex 6-A of the USMCA. The Certificate of Eligibility shall be properly completed and signed by an authorized official of the Canadian or Mexican government and shall be presented to Customs at the time the claim for preferential tariff treatment is filed.
Concerning the third requirement, the yearly amount allowed under the TPL must not have been filled prior to the presentation of the Certificate of Eligibility.
Tariff Preference Levels are administered like tariff rate quotas. Tariff rate quotas permit a specified quantity of imported merchandise to be entered at a reduced rate of duty during the quota period. Once the tariff-rate quota limit is reached, goods may still be entered, but at a higher rate of duty. To check the status of a Tariff Preference Level (TPL) quota, contact your local service port of entry or visit https://www.cbp.gov/trade/quota/tariff-rate-quotas.
HOLDING:
The applicable subheading for the five fabric styles, WC005 21606, WC006 21817, V085 21529, V085 21567 and GA458 21621D will be 6006.33.0040, HTSUS. The five fabrics are eligible for TPL under subheading 9823.53.05, HTSUS, provided all conditions are met.
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