CLA-2-54:OT:RR:NC:N3:352
Rod Wagener
Summit Global Logistics
Warehouse 2B
4 Newington Rd.
Silverwater NSW 2219
Australia
RE: The tariff classification, country of origin and status under the United States-Australia Free Trade Agreement (UAFTA) of a woven polyester fabric, from Australia
Dear Mr. Wagener:
In your letter dated March 28, 2018, on behalf of your client, Australian Textile Mills Pty. Ltd., you requested a tariff classification ruling and status under the UAFTA of a woven fabric from Australia to be used in the manufacture of window furnishings. A sample of the fabric was provided.
FACTS:
Style “Mercury II Translucent 17015”, consists of a woven fabric that is composed of 100 percent textured polyester filament yarns of different colors. You state that the fabric is not coated, but is impregnated on both sides with an acrylic polymer that is not visible to the naked eye. The total weight of the fabric is 176 g/m2 (polyester fabric base is 140 g/m2 and pad impregnation is 36 g/m2). The fabric will be imported as roll goods in widths of 280 and 300 centimeters.
For the fabric, in the original request and in subsequent communications, you provided the manufacturing information as follows:
Polyester filament yarn is extruded and formed in Taiwan.
Fabric is woven in Australia.
Fabric is dyed in Australia.
Fabric is cured at 160 degrees centigrade prior to impregnation in Australia.
Fabric is impregnated 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:
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 combinations of textile and 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 fabric had been impregnated on both sides with an acrylic polymer, the coating is not visible to the naked eye. Therefore, the fabric is not considered to be a coated 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.
Lastly, you consider classification under 5407.52, as a dyed fabric; however, classification is precluded under this heading because the fabric is composed of yarns of different colors.
Pursuant to Subheading Note 1(g), Section XI, HTSUS, defines woven fabric of yarns of different colors in part as:
(i) Woven fabric (other than printed woven fabric) which: Consists of yarns of different colors or yarns of different shades of the same color (other than the natural color of the constituent fibers);
The applicable subheading for Style “Mercury II Translucent 17015”, 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.
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 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.
As the good contains non-originating materials, it 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 “Mercury II Translucent 17015” - 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 “Mercury II Translucent 17015” 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.
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.
As the fabric was woven in Australia, country of origin is conferred in Australia.
HOLDING:
The applicable subheading for Style “Mercury II Translucent 17015”, 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.
Based on the facts provided, Style “Mercury II Translucent 17015” 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.
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 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