CLA 2-OT:RR:NC:N3:348
Mrs. Robin Raley Cowen
Roser & J. Cowen Logistical Services
4695 Towerwood Drive
Brownsville, TX 78521
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of textile covers from Mexico; General Note 12(b)(ii)(A); 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.19(b); NAFTA Preference Override; Article 509.
Dear Mrs. Cowen:
In your letter dated June 16, 2011, you requested a ruling on the status of certain textile boat accessories from Mexico under the NAFTA.
FACTS:
The subject merchandise consists of four textile items, all for boats. The first is called a Bimini Top. According to a drawing on your client’s website (www.westlandcovers.com) it is an awning-like sunshade for a powerboat. It is stretched across an aluminum frame that, after importation, will be attached to the boat’s cabin over the deck area to provide shade and limited protection from the elements. In your letter, you describe it as follows:
The Bimini Top, in its imported condition, will consist of 5 yards of an acrylic (synthetic) fabric fitted with hardware to an aluminum tubing structure. The Bimini Top will principally be used so that the fabric stretches across the aluminum structure, attaches to the top of a boat, and serves to protect the boat and its occupants from rain, sun, and other outdoor elements.
The other items are a cover for a boat, a cover for outboard motors, and a cover for a boat console. The covers are made of woven acrylic fabric and are approximately shaped to fit over the item they are intended to protect; you state that each cover attaches either to the boat or the item itself. The covers are designed to protect the items from rain, sun, and other elements while the boat is not in use.
The manufacturing operations of the fabric for all four of the items are as follows:
Staple fiber is extruded in a non-originating country and exported into the United States.
The fibers are spun into yarns and woven into fabric in the U.S.
The fabric is exported to Mexico, where it is cut and sewn and otherwise manufactured into the finished items;
The finished items are exported to the U.S.
Non-originating materials:
Bimini: screws, washers, rivets, snaphooks, strap eyes, buckle, webbing and aluminum tubing.
Boat cover: webbing.
You did not provide the country of origin for the sewing thread. We will assume the sewing thread used to assemble all four items is non-originating.
Originating materials:
Bimini: labels, binding, zippers, eye end, jaw slide and polyester tubing.
Boat cover: rope, webbing, labels and tie down.
Motor hood: rope, labels and binding.
Console cover: labels, shock cord and polyester tubing.
A sample was submitted with your ruling request; you state that the fabric is classifiable in subheading 5512.29, Harmonized Tariff Schedule of the United States (HTSUS), which provides for woven fabrics of synthetic staple fibers. You also state that the fibers are classifiable in subheading 5503, HTSUS, which provides for synthetic staple fibers, not carded or combed or otherwise processed for spinning.
ISSUES:
What are the classification and country of origin of the subject merchandise? Do the finished items qualify for eligibility under NAFTA?
CLASSIFICATION:
The applicable subheading for the Bimini top, the boat cover, the console cover, and the motor cover will be 6307.90.9889, HTSUS, which provides for other made up textile articles, other. The general rate of duty will be seven percent ad valorem.
You state that the Bimini Top should be classified in subheading 6306.22.9030, HTSUS, which provides for tents of synthetic fibers. You refer to a previous ruling, which you do not identify by its file number but which we believe is New York Ruling Letter N115237, dated July 29, 2010, in which a carport (a garage-like tent) was classified as a tent in heading 6306. You state that like that carport, the Bimini Top “consists of a synthetic fabric stretched across a skeletal metal structure.” However, the carport is a shelter as described in the Explanatory Notes to heading 6306 and numerous rulings; the Bimini Top is not ejusdem generis to the exemplars of heading 6306 and is not considered a tent for tariff classification purposes.
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/.
NAFTA ELIGIBILITY:
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.
All merchandise undergoes processing operations in the United States and Mexico which are countries provided for under the North American Free Trade Agreement. All four items at issue will be eligible for the NAFTA preference if they qualify to be marked as a good of Mexico and if they are transformed in Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS.
For headings 6307, HTSUS, the appropriate subdivision (t), Chapter 63 rules state that:
A change to headings 6304 through 6310 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6002, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one of more of the NAFTA parties.
When the synthetic staple fibers leave the non-NAFTA country they are classified in heading 5503, HTSUS. As products of chapter 55, HTSUS, are excepted from meeting the tariff change to headings 6307, HTSUS, it would initially appear that the non-originating material does not undergo the requisite change in tariff classification. It is noted however, that the non-originating staple fibers are spun into a yarn and woven into a fabric in the United States. The synthetic staple yarn is classified in heading 5509, HTSUS, while the woven fabric is classified in heading 5512, HTSUS.
For heading 5512, HTSUS, the appropriate subdivision (t) Change in Tariff Classification Rules states that:
A change to headings 5512 through 5516 from any heading outside that group, except from headings 5106 through 5110, 5205 through 5206, 5401 through 5404 or 5509 through 5510.
As heading 5503, HTSUS is not excepted by subdivision (t), the non-originating staple fibers undergo the requisite change in tariff classification in the United States and the woven fabric qualifies as an originating material.
The Bimini top, boat cover, motor hood and console cover contain non-originating materials. However, these items would qualify for the NAFTA preference following General Note 12(b) (ii) (A), HTSUS. Subdivision (t), Chapter rule 1 for Chapter 63 states that the rule applicable to the good shall only apply to the component that determines the tariff classification, in this case, the synthetic fabric that has been determined to be an originating material. The remaining non-originating materials therefore do not need to meet the change in tariff classification rule.
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:
HTSUS Tariff shift and/or other requirements
The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
As the fabric is formed in a single country, that is, the United States, by a fabric-making process, as per the terms of the tariff shift requirement, country of origin is conferred in the United States.
However, Bimini top, boat cover, motor hood and console cover qualify as a NAFTA originating good. As stated in Section 102.19(b):
If, under any provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.
Based on the facts, the Bimini top, boat cover, motor hood and console cover are originating goods under NAFTA and have been determined under section 102.21(c)(2) and (c)(4) to be goods of U.S. origin. Because the articles were returned to the U.S. after having been advanced in value or improved in condition in Mexico by virtue of cutting and sewing into finished Bimini top, boat cover, motor hood and console cover for Customs duty purposes, the country of origin is Mexico, pursuant to Section 102.19(b). Accordingly, the “MX” NAFTA rate of FREE will be applicable to all products listed above.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.
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 classification or the country of origin determination in this ruling, contact National Import Specialist Mitchel Bayer at (646) 733-3102. If you have any questions regarding the eligibility under NAFTA, contact Rosemarie Hayward at (646) 733- 3064.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division