CLA 2-OT:RR:NC:N3:351
Mr. Robert Um
OEC Logistics Inc.
133-33 Brookville Blvd Suite 306
Rosedale, NY 11422
RE: Classification and country of origin determination for ponytail holders; 19 CFR 102.21(c)(2); tariff shift
Dear Mr. Um:
This is in reply to your letter dated January 24, 2020, requesting a classification and country of origin determination for ponytail holders which will be imported into the United States. This request was made on behalf of your client, Yumark Enterprises Corp. Your letter was accompanied by two samples. The samples will be retained by this office.
FACTS:
At issue are two ponytail holders, identified as a “Hair Elastic,” item #19112005 (brown) and item #19112007 (black). The two items are the same product with only a color difference. The “Hair Elastic” is a looped stretch cord made of textile braided fabric sheathed over a rubber core. The ends are glued together to form a loop.
The manufacturing operations of the “Hair Elastic” are as follows:
China:
- Polyester filament is extruded; the yarn is formed and spooled.
- Vulcanized rubber core formed and spooled.
- Polyester filament yarn and rubber core are shipped to Cambodia.
Cambodia:
- Polyester yarn is braided over the rubber core.
- Braided cord with a rubber core is cut to specified size.
- Ends of the cut cord are glued to form a loop.
- Ponytail holders, “Hair Elastic,” are packed in cartons for export to the United States.
ISSUE:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
In your letter you suggest the classification for the “Hair Elastic” is under subheading 5609.00.3000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “[a]rticles of yarn, strip or the like of heading 5404 or 5405, twine, cordage, rope or cables, not elsewhere specified or included: [o]f man-made fibers.” We disagree. By application of GRI 1, the subject ponytail holders are classified in heading 5609, HTSUS, which provides for: “[a]rticles of yarn, strip or the like of heading 5404 or 5405, twine, cordage, rope or cables, not elsewhere specified or included.” The item cannot be classified under GRI 1, alone. By application of GRI 6, the remaining GRIs, in the order of their appearance, are applied at the subheading level. It is GRI 3(b) that applies at the subheading level. In this case, it is the rubber, the component that allows the item to stretch, bend and wrap, that imparts the essential character of the “Hair Elastic.” Therefore, subheading 5609.00.30, HTSUS, does not apply because the composition of the center core of the elasticized band is not of man-made fibers. Headquarters Ruling (HQ) 962070 noted.
The applicable subheading for item #19112005 (brown) and item #19112007 (black) which you describe as “Hair Elastic” will be 5609.00.4000, HTSUS, which provides for “[a]rticles of yarn, twine, cordage, rope or cables, not elsewhere specified or included: [o]ther.” The rate of duty will be 3.9 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 the World Wide Web at https://hts.usitc.gov/current.
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:
5609.00 (1) If of continuous filaments, including strips, the country of origin of a good classifiable under heading 5609 is the country, territory, or insular possession in which those filaments, including strips, were extruded.
While you did not indicate if the rubber was extruded directly into the shape of the core in China or if it was cut from sheets of rubber and then spooled in China, in either case, as the polyester filament yarn is extruded and any extrusion occurs in a single country, that is, China, as per the terms of the tariff shift requirement, country of origin is conferred in China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 5609.00.4000, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 5609.00.4000, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
HOLDING:
The “Hair Elastic” is properly classified under subheading 5609.00.4000, HTSUS, and the duty rate is 3.9 percent ad valorem. The country of origin is China. Due to the classification and country of origin, the “Hair Elastic” is subject to subheading 9903.88.03, HTSUS, and an additional tariff of 25 percent ad valorem under the terms of U.S. Note 20 to Subchapter III, Chapter 99, HTSUS.
The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
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.
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 Kim Wachtel at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division