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HQ 088335

January 30, 1991

CLA-2 CO:R:C:G 088335 DFC


TARIFF NO.: 6306.12.0000

Mr. Richard Desmarais
Revenue Canada
Customs and Excise
400 Youville Square
3rd Floor
Montreal, Qc.
H2Y 2C2

RE: Awnings

Dear Mr. Desmarais:

In a letter dated November 7, 1990, you inquired as to the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of awnings produced in Canada.


The merchandise consists of awning systems of man-made fabrics imported together with the frames. A bench test by burning indicates that the fabric is of synthetic fibers.


Does the presence of frames preclude classification of the merchandise as awnings?

Are the awnings eligible for duty treatment under the United States-Canada Free Trade Agreement (CFTA)?


In applying the HTSUSA, the Customs Service must follow the terms of the statute. Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes, and, provided such headings
or notes do not otherwise require, according to [the remaining GRI's taken in order]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes.

Heading 6306, HTSUSA, provides for awnings. The Explanatory Notes (EN) are the official interpretation of the Harmonized System at the international level. EN 3 to Heading 63.06 which is pertinent here reads as follows:

(3) Awnings, sunblinds (for shops, cafes, etc.) These are designed for protection against the sun; they are generally made of strong plain or striped canvas, and may be mounted on roller or folding mechanisms. They remain classified in this heading even when provided with frames, as is sometimes the case with sunblinds.

It is clear from the cited EN that the presence of frames does not preclude the awning systems from classification as awnings.

To be eligible for tariff preferences under the CFTA, goods must be "originating goods" within the rule of origin in General Note 3(c) (vii) (B), HTSUSA. There are two primary means in General Note 3(c) (vii) (B) by which articles imported into the United States may be "goods originating in the territory of Canada." The first method is if the goods are "wholly obtained or produced in the territory of Canada and/or the United States." General Note 3(c) (vii) (B) (1). The second method is if the goods are "transformed in the territory of Canada and/or the United States." General Note 3(c) (vii)

A product which is "wholly obtained or produced in the territory of Canada and/or the United States" is one which is grown, mined, harvested, born and raised in Canada and/or the United States, or otherwise intimately connected to the two countries and their land, air and sea territories as defined in General Note 3(c) (vii) (L), HTSUSA. Obviously, the awnings are not "wholy obtained or produced in the territory of Canada and/or the United States."

The second method to become an originating good for CFTA purposes is for an article made of foreign materials to be
transformed in Canada and/or the United States in accordance with General Note 3(c) (vii) (B) (2). A transformation is evident when a change in tariff classification occurs that is authorized by General Note 3(c) (vii) (R), HTSUSA. However, in this instance the fabric in rolls is from Chapters 54 or 55, HTSUSA, depending on whether it is of man-made filaments or man-made staple filaments. Consequently, in view of General Note 3(c) (vii) (R) (11) (pp), TSUSA, which precludes changes from Chapters 54 and 55 to Chapter 63, TSUSA, the awnings are not "originating goods" under General Note 3(c) (vii) (B) (1)

Another method of establishing a transformation is by the 50% direct cost of processing test. The CFTA includes a provision that grants transformation status to certain goods of which 50% or more of the direct costs of processing are performed in Canada and/or the United States. General Note 3 (c) (vii) (H). If these items are assembled in Canada, and 50% of the value of materials and cost of processing are Canadian and U.S., then they are "originating goods" under General Note (H). Such goods are considered to be originating goods and receive the CFTA duty treatment. However, there are only two types of goods subject to this provision. The first are those articles which are imported into Canada in an unassembled or disassembled form in accordance with GRI 2(a) HTSUSA. General Note 3(c) (vii) (G) (1). The second type of goods are those covered by tariff provisions which provide for both the goods themselves and their parts. General Note 3(c) (vii) (G) (2).


The awning systems are classifiable under subheading 6306.12.0000, HTSUSA, as awnings of synthetic fibers, with duty at the general rate of 10 percent ad valorem. The applicable textile category is 669. Articles originating in Canada and classifiable under this subheading are eligible for a duty rate of 7 percent ad valorem under the CFTA. The awning systems may be eligible for duty treatment under the CFTA, if the direct cost of processing test is met. We cannot ascertain from the file whether an assembly process is involved here.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile
merchandise, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels).


John Durant, Director

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