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HQ 089444

September 3, 1991

CLA-2 CO:R:C:T 089444 CC


TARIFF NO.: 6305.31.0020

Mr. Gregory J. Grasher
Border Brokerage Company
P.O. Box B
Blaine, WA 98230

RE: Polypropylene bags; classifiable in Heading 6305; country of origin is where the fabric is woven-China; CFTA

Dear Mr. Grasher:

This letter is in response to your inquiry of April 25, 1991, on behalf of Komol Plastics Company, Ltd., requesting the tariff classification and country of origin of polypropylene bags. Samples were submitted for examination.


The submitted sample is a bag that measures approximately 40 inches by 20 inches. It is made of woven polypropylene strips and is open at one end. You state that this merchandise will be used for the conveyance of goods.

According to your submissions, raw material from North America will be sent to China where it will be spun and woven into polypropylene fabric on circular bolts. The bolts will be sent to Canada where the fabric will be cut to length by a heat cutter. Also one end of the cut material will be double folded and sewn closed to make the bottom of the bag, and the top edge will be folded and hemmed. Then the bags will be printed and packed for shipping. You have indicated that the costs associated with the processing and assembly operations in Canada will be greater than the costs associated with the foreign content and assembly.


What is the classification of the polypropylene bags under the Harmonized Tariff Schedule of the United States Annotated

What is the country of origin of the polypropylene bags?

Whether the merchandise at issue is considered goods originating in the territory of Canada in accordance with the United States-Canada Free Trade Agreement (CFTA)?



Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 6305, HTSUSA, provides for sacks and bags, of a kind used for the packing of goods. According to the Explanatory Notes, the official interpretation of the HTSUSA at the international level, this heading covers textile sacks and bags of a kind normally used for the packing of goods for transport, storage or sale. The submitted sample clearly fits within this category of goods and is classifiable in Heading 6305.

Country of origin

Country of origin determinations for textile products are subject to Section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d)(2) of the Customs Regulations states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article as a result of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(v) The value added to the article or material in each foreign territory or country, or insular possession of the U.S., compared to its value when imported into the U.S.

In Canada the tubular fabric has been cut to length and sewn to make the bags. These are relatively simple operations involving unskilled labor that would not constitute substantial manufacturing or processing operations, and, therefore, no substantial transformation takes place in Canada. The last substantial transformation occurs in China, where the fabric is woven; consequently, the country of origin for this merchandise is China.


Concerning the eligibility of this merchandise for a duty reduction in accordance with the CFTA, General Note 3(c)(vii) provides the following:

(B) For the purposes of subdivision (c)(vii) of this note, goods imported into the customs territory of the United States are eligible for treatment as "goods originating in the territory of Canada" only if--

(1) they are goods wholly obtained or produced in the territory of Canada and/or the United States, or

(2) they have been transformed in the territory of Canada and/or the United States, so as to be subject--

(I) to a change in tariff classification as described in the rules of subdivision
(c)(vii)(R) of this note, or

(II) to such other requirements subdivision (c)(vii)(R) of this note may provide when no change in tariff classification occurs, and they meet the other conditions set out in (R) of this note.

General Note 3(c)(vii)(R), which concerns whether a change in tariff classification has taken place, at Section XI states regarding Chapter 63 the following:

(pp) A change to any heading of chapter 63 from any heading outside that chapter other than headings 5106 through 5113, 5204 through 5212, 5306 through 5311, or headings of Chapters 54 and 55; provided, that goods are both cut and sewn in the territory of Canada and/or the United States.

The fabric used to make these bags is classifiable in Chapter 54, since any plastic applied to the fabric is not visible to the naked eye. The processing performed in Canada results in this merchandise being classifiable in Chapter 63. Therefore this merchandise would not be considered a good originating in Canada by having undergone a change in tariff classification, in application of General Note

Another method for goods to be treated as originating in Canada is provided for by General Note 3(c)(vii)(H), which states the following:

Notwithstanding subdivision (c)(vii)(G), goods described in that paragraph shall be considered to have been transformed in the territory of Canada and be treated as goods originating in the territory of Canada if --

(1) the value of materials originating in the territory of Canada and/or the United States that are used or consumed in the production of the goods plus the direct cost of assembling the goods in the territory of Canada and/or the United States constitute not less than 50 percent of the value of the goods when exported to the territory of the United States, and

(2) the goods have not subsequent to assembly undergone processing or further assembly in a third country and they meet the requirements of subdivision (c)(vii)(E) of this note.

However, we note there are only two types of goods subject to this provision. The first are those articles that 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)). In addition, we note that General Note 3(c)(vii)(I) provides that the provisions of subdivisions (c)(vii)(H) of this note shall not apply to goods of chapters 61 through 63. Therefore the bags at issue cannot be considered goods originating in Canada in application of General


The submitted merchandise is classified under subheading 6305.31.0020, HTSUSA, which provides for sacks and bags, of a kind used for the packing of goods, of man-made textile materials, of polyethylene or polypropylene strip or the like, other. The rate of duty is 9.5 percent ad valorem, and the textile category is 669. The country of origin for quota purposes is China, and this merchandise is not considered goods originating in the territory of Canada for duty purposes.

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), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

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 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it subsequently be 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, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).


John Durant, Director

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