CLA-2-RR:NC:TA:349 G89148
Ms. Beverly Finnen
Sweet Kyla Inc.
330 Trillium Drive
Kitchener, Ontario, Canada N2E 2K6
RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a blanket, comforter and nursing cushion; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; de minimis; Article 509
Dear Ms. Finnen:
This is in reply to your letter dated April 6, 2001 requesting a classification, status under the NAFTA and country of origin determination for a blanket, comforter and nursing cushion which will be imported into the United States.
FACTS:
The subject merchandise consists of a blanket, comforter and nursing cushion. A sample of each item was submitted. The blanket is made from a 100 percent polyester knit fleece fabric with a “teddy bear” design. It measures approximately 30 x 40 inches and the edges are finished with a strip of woven fabric printed with a “blue gingham” pattern. You have indicated that the “blue gingham” fabric is less than 7 percent of the total weight of the blanket. The comforter, which you refer to as a coverlet, is sized to fit an infant's crib. The patchwork face side of the comforter is made up from 16 squares of woven cotton fabrics. Eight squares are made from a woven pile fabric referred to as “pistachio velvet”. The other eight squares are made from a yarn dyed “pistachio check” fabric. Four bows made from the pistachio velvet fabric are sewn to the face of the comforter. The back of the comforter is made from a 100 percent cotton woven flannel fabric. The comforter is filled with a polyester batting fabric and quilted through all three layers. The nursing cushion consists of a pillow form and cover. The C-shaped cushion measures approximately 22 x 28 inches. The pillow form has a nonwoven polypropylene shell and it is stuffed with a polyester fiber fill. One side of the cover is made from a 100 percent cotton yarn dyed tan check fabric. The other side is made from a 65 percent polyester and 35 percent cotton woven fabric. The tan check side features a pocket made from the polyester cotton fabric and the other side has a pocket made from the tan check fabric. The cover has a 16-inch zippered opening. As requested the samples will be returned.
The manufacturing operations for the blanket, comforter and nursing cushion are as follows:
BLANKET:
TAIWAN:
-polyester “teddy bear” pile fabric is knit.
-rolls of fabric are shipped to Canada.
ISRAEL:
-cotton “blue gingham” fabric is woven.
-rolls of fabric are shipped to Canada.
CANADA:
-fabrics are cut and sewn to create the blanket.
-blankets are packed and shipped.
COMFORTER:
GUATEMALA:
-cotton pistachio check fabric is woven.
-rolls of fabric are shipped to Canada.
UNITED STATES:
-cotton pistachio velvet fabric is woven.
-rolls of fabric are shipped to Canada.
VARIOUS COUNTRIES IN THE FAR EAST:
-cotton flannel fabric is woven.
-rolls of fabric are shipped to Canada.
CANADA:
-polyester batting fabric is made.
-the fabrics are cut, sewn, stuffed, quilted, etc., forming the comforter.
-comforter is packed and shipped.
NURSING CUSHION:
UNITED STATES:
-cotton tan check fabric is woven.
-polypropylene nonwoven fabric is formed.
-rolls of fabrics are shipped to Canada.
VARIOUS COUNTRIES IN THE FAR EAST:
-polyester and cotton fabric is woven.
-rolls of fabric are shipped to Canada.
CANADA:
-polyester fiber fill is formed.
-the fabrics are cut, sewn, stuffed, etc., forming the cushion.
-nursing cushion is packed and shipped.
ISSUE:
What are the classification, eligibility under NAFTA and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the blanket, will be 6301.40.0020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for blankets and traveling rugs: blankets (other than electric blankets) and traveling rugs, of synthetic fibers... other. The general rate of duty will be 9.8 percent ad valorem.
The applicable subheading for the comforter will be 9404.90.8505, HTSUSA, which provides for articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: other: other: quilts, eiderdowns, comforters and similar articles… with outer shell of cotton. The general rate of duty will be 13.3 percent ad valorem.
The applicable subheading for the nursing cushion will be 9404.90.2000, HTSUSA, which provides for articles of bedding and similar furnishing (for example, mattresses, quilts, eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and similar furnishings: other. The general rate of duty will be 6 percent ad valorem.
The comforter falls within textile category designation 362. The blanket falls within textile category designation 666. The nursing cushion is not currently assigned a textile category designation. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CUSTOMS.GOV. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.
NAFTA ELIGIBILITY:
The blanket undergoes processing operations in Canada and the comforter and nursing cushion undergo processing operations in the United States and Canada. These are countries provided for under the North American Free Trade Agreement. The blanket, comforter and nursing cushion at issue will be eligible for the NAFTA preference if they qualify to be marked as a good of Canada and if they are transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 6301, HTSUSA, subdivision (t), Chapter 63, rule 1, states that:
A change to headings 6301 through 6302 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 polyester knit fabric for the blanket leaves Taiwan, it is classified in heading 6002, HTSUSA and the gingham trim from Israel is classified, depending on the fabric weight, in heading 5208 or 5209, HTSUSA. As fabrics of headings 5208, 5209 and 6002, HTSUSA, are excepted from meeting the tariff change to headings 6301 through 6302, HTSUSA, the non-originating material from Taiwan and Israel does not undergo the requisite change in tariff classification. Accordingly, the blanket is not eligible for the NAFTA preference.
For heading 9404, HTSUSA, subdivision (t), Chapter 94, rule 7, states that:
A change to subheading 9404.90 from any other chapter, except from headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516.
In the case of the comforter, when the non-originating materials from Guatemala and the Far East enter Canada they are classifiable, depending on the fabric weight, in heading 5208 or 5209, HTSUSA. In the case of the nursing cushion, when the non-originating materials from the Far East enter Canada they are classifiable, depending on the fabric weight, in heading 5513 or 5514, HTSUSA. As fabrics of headings 5208, 5209,5513 and 5514 are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, the non-originating materials from Guatemala and the Far East do not undergo the requisite change in tariff classification. Accordingly, the comforter and nursing cushion are not eligible for the NAFTA preference.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
We note that as written, the listed headings and subheadings under 19 CFR 102.21(b)(5) include subheading 9404.90.10, HTSUSA, but fail to include subheading 9404.90.20, HTSUSA, for purposes of the section 102.21 rules of origin. The omission of that subheading was addressed in Headquarters Ruling Letter (HQ) 962122 dated October 1, 1998 which stated that: "...it is Customs position that the omission of subheading 9404.90.20, HTSUS, was an oversight. In that respect we direct your attention to the statute pertaining to the rules of origin, 19 U.S.C. section 3592, which states explicitly under (b)(2), Special rules, that:
the origin of a good that is classified under one of the following HTS headings or subheadings shall be determined under subparagraph (A),(B), or (C) of paragraph (1), as appropriate: 5609, 5807, 5811, 6209.20.5040, 6213, 6214, 6301, 6302, 6303, 6304, 6305, 6306, 6307.10, 6307.90, 6308, or 9404.90; and… (Emphasis added)
As the statute does not break out subheading 9404.90, HTSUS, it is Customs position that the statute takes precedence over the regulation. That is to say, Customs cannot exclude by regulation what is specifically included by statute. Accordingly, in determining the origin of the subject nursing cushion, the 102.21 rules of origin are applicable."
We also note that the blue gingham fabric used as the binding on the edge of the blanket was made in Israel. Section 102.21(a) specifically states that the rules in Section 102.21 shall not apply "for purposes of determining whether goods originate in Israel or are the growth, product, or manufacture of Israel." The rules of origin in Section 12.130 are to be used to make that determination. The blue gingham fabric was woven and printed in Israel and shipped to Canada where it was cut and assembled with another fabric into the blanket. Israel can not be the country of origin of the blanket because the fabric was substantially transformed in Canada. As Israel does not confer origin pursuant to Section 12.130, we then apply the rules in Section 102.21 to determine the country of origin.
Paragraph (c)(1) states that “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.” The blanket, comforter and nursing pillow are not wholly obtained or produced in a single country, territory or insular possession, and therefore paragraph (c)(1) of Section 102.21 is inapplicable for those components.
Paragraph (c)(2) states that “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 that “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
6301-6306 The country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric making process.
9404.90 The country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.
The blanket is made up from fabrics that were formed in Israel and Taiwan. Since the fabrics comprising the blanket were formed in more than one country, Section 102.21(c)(2) would appear to be inapplicable. However, the fabric from Israel weighs less than 7 percent of the total weight of the blanket. According to Section 102.13, which sets out the De Minimis rule, foreign components that do not undergo the tariff shift specified in Section 102.21 are to be disregarded in determining the country of origin of the good if the total weight of those components is not more than 7 percent of the total weight of the good. The only remaining fabric that makes up the blanket is formed in Taiwan. As that fabric is formed in a single country, following the terms of the tariff shift requirement, the country of origin of the blanket is conferred in Taiwan.
The comforter and nursing cushion are made from two or more fabrics that are formed in different countries. As the fabrics comprising the comforter and nursing cushion are formed in more than one country, Section 102.21(c)(2) is inapplicable for the comforter and nursing cushion.
Section 102.21(c)(3) states that, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.”
As the subject comforter and nursing cushion are not knit and subheading 9404.90, HTSUSA, is excepted from provision (ii), Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred”. In the case of the subject merchandise, the most important manufacturing process occurs at the time of fabric making. Basing the country of origin determination on the fabric making process as opposed to the assembly process carries out the clear intent of Section 334 as expressed in Section 334 (b)(2) and Part 102.21(c)(3)(ii). In the case of the subject comforter and nursing cushion, the fabric making process of the outer shell and cover constitutes the most important manufacturing process. The fabrics for the outer shell and cover are sourced in more than one country. As no one fabric is more important than the other, a single country of origin determination cannot be made based on Section 102.21(c)(4).
Paragraph (c)(5) states that “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred.” Accordingly, in the case of the comforter and nursing cushion, the country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Canada.
HOLDING:
The fleece blanket is classified in subheading 6301.40.0020, HTSUSA, which provides for knit blankets of synthetic fibers. The nursing cushion is classified in subheading 9404.90.2000, HTSUSA, which provides for other pillows and cushions. The comforter is classified in subheading 9404.90.8505, HTSUSA, which provides for other quilts, eiderdowns, comforters and similar articles with an outer shell of cotton.
The country of origin of the blanket is Taiwan. Based upon international trade agreements products of Taiwan which fall within textile category designation 666 are subject to quota and the requirement of a visa. The country of origin of the comforter and nursing cushion is Canada. These two products are not subject to quota or visa restrictions. The comforter and nursing cushion are not entitled to the NAFTA “CA” special duty rate.
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 181.100(a)(2). 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 181 of the Customs Regulations (19 C.F.R. 181). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 181.100(a)(2), 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.
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 John Hansen at 212-637-7078.
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 Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division