CLA-2-62:OT:RR:NC:WA:357
Mr. Mike Rizner
Augusta Sportswear
P.O. Box 14939
Augusta, GA 30919
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of men’s varsity letterman jackets from Mexico; Article 509
Dear Mr. Rizner:
In your letter dated May 28, 2009 and in follow-up correspondence, on behalf of Holloway Sportswear, you requested a ruling on the status of men’s varsity letterman jackets from Mexico under the NAFTA.
Style 4182 has a body and sleeves of a 100% wool woven fabric. It has a full front opening with a seven-snap closure, rib knit cuffs, collar and waistband, slant pockets with welting at the waist and a full lining.
Style 4183 has a body of a 100% wool woven fabric and inset sleeves made of leather. It has a full front opening with a seven-snap closure, rib knit cuffs, collar and waistband, slant pockets with welting at the waist and a full lining.
The applicable tariff provision for styles 4182 and 4183 will be 6201.91.2011, Harmonized Tariff Schedule of the United States (HTSUS), which provides for anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), of wool or fine animal hair: other. The general rate of duty will be 49.7 cents/kg plus 19.7 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 described two scenarios for production of the jackets. In both cases the wool shell fabric is spun into yarns and woven into fabric in Mexico, and the manufacturing of the jackets is in Mexico. You also stated that the leather sleeves of style 4183 originate in a NAFTA country.
The first scenario involves a man-made fiber fabric lining material made in Thailand and shipped to Mexico, where it will be joined by a multi-needle quilting machine to a nonwoven batting produced in Mexico. This material will then be cut into lining components and assembled into the jackets.
In the second scenario woven nylon fabric is made in Thailand and shipped to Mexico, where it is cut into lining components and assembled into the jackets.
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 of both jackets is the outer shell composed of woven wool fabric.
For goods classifiable in subheading 6201.91, General Note 12/62.3 requires:
A change to subheading 6201.91 through 6201.93 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 cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties, and
the visible lining fabric listed in chapter rule 1 for chapter 62 satisfies the tariff change requirements therein.
The quilted lining fabric in the first scenario is provided for in chapter 58, HTSUS. As such, it is not listed in chapter 62 rule one and is not subject to the tariff change requirements noted in General Note 12/62.3(B).
Based on the facts provided, the goods described above in the first scenario, that is, with the machine-quilted lining fabric produced in Mexico, qualify for NAFTA preferential treatment because they will meet the requirements of HTSUS General Notes 12(b)(ii)(A) and 12/62.3(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.
The goods described in the second scenario, namely, using lining material of woven nylon fabric produced in Thailand and cut into parts in Mexico, do not qualify for preferential treatment under the NAFTA because, although the component that determines the classification meets the tariff shift requirement, the visible lining fabric does not meet the tariff shift rule listed in chapter 62 rule one, due to the fact that this lining material is woven in Thailand.
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 the ruling, contact National Import Specialist William Raftery at (646) 733-3047.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division