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HQ 951842


September 4, 1992

CLA CO:R:C:T 951842 jb

CATEGORY: CLASSIFICATION

TARIFF: 6214.30.0000

Mr. Ashok Menon
Ranka Enterprise Inc.
7261 Victoria Park Avenue
Markham, Ontario
Canada L3R 2M7

RE: Request for classification, country of origin and duty treatment under CFTA for scarves; subheading 6214.30.0000, HTSUSA

Dear Mr. Menon:

This letter is in response to your inquiry of April 30, 1992, requesting a binding ruling addressing classification, country of origin information, and the applicability of the United States-Canada Free Trade Agreement (CFTA) for scarves that will be shipped to the U.S. from Canada. A sample was provided to this office for examination.

FACTS:

You state that 100 percent acrylic woven fabric will be imported into Canada from China. The imported fabric will be in rolls 288 yards in length and 12 inches in width with no lines of demarcation on the fabric.

In Canada the fabric is cut at 54 inch intervals and a fringe made on the cut edges of the scarf. A completed scarf thus measures 12 inches wide and 54 inches long. With the exception of the stitching of the label onto the scarf, no other stitching is necessary. The last steps in this process entail correcting any defects and packaging the scarf in a polybag.

ISSUE:

I. What is the classification of the scarf?

II. What is the country of origin of the scarf?

III. Whether the scarf is eligible for reduced duty under CFTA?

IV. What are the marking requirements for the scarf?

LAW AND ANALYSIS:

I. Classification

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined in accordance with the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied in the order of their appearance.

The fabric, as imported from China would be classified in heading 5512, HTSUSA, which provides for woven fabrics of synthetic staple fibers, containing 85 percent or more by weight of synthetic staple fibers. Upon completion, once the fabric is cut and the fringe made on the ends, the fabric becomes a scarf for classification purposes.

Heading 6214, HTSUSA, provides for shawls, scarves, mufflers, mantillas, veils and the like, and as such is an eo nomine provision for the submitted sample. Specifically, the scarf is classified in subheading 6214.30.0000, HTSUSA as scarves of synthetic fibers.

II. Country of Origin

Section 12.130 of the Customs Regulations (19 CFR 12.130), sets forth the principles of country of origin for textiles and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854).

Pursuant to 19 CFR 12.130(b), the standard of substantial transformation governs the country of origin determination where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing. The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d). Section 12.130(e)(1) describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130(e)(1)(iv) provides that an article or material usually will be a product of a particular foreign territory or country when there has been both a cutting of fabric into parts and the assembly of those parts into the completed article.

Section 12.130(e)(1)(v) states that an article will be a product of a particular foreign country, when it has undergone prior to importation into the U.S. in that foreign country:

Substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which have been cut from fabric in another foreign territory or country, or insular possession, into a completed garment (e.g., the complete assembly and tailoring of all cut pieces of suit-type jackets, suits and shirts.

In Headquarters Ruling Letter (HRL) 085893, dated February 22, 1990, regarding the country of origin of a 100 percent rayon scarf, Headquarters ruled that the cutting and hemming operations performed in Canada were not substantial operations that changed the country of origin of the scarves. The bolts of fabric, 44 inches wide and 120 meters long, were imported into Canada from India. In Canada the fabric was cut to 20 inches by 72 inches lengths and sewn on all four sides. The scarves were then labeled, checked and prepacked for shipping. The costs attributable to Canada were purportedly 75 percent of the selling price of the scarves. The country of origin of the scarves was determined to be India.

The processing ruled upon in HRL 085893 is similar but more extensive than the one presently at issue, yet the country of origin in that case was still not considered adequately substantial to transform the fabric. Accordingly, the fabric produced in China, has not undergone the requisite substantial transformation to qualify for a change in country of origin and the scarves are products of China.

III. The United States Canada Free Trade Agreement

General Note 3(c)(vii), HTSUSA, sets forth the rules which determine whether products imported into the United States from Canada are entitled to special duty treatment under CFTA. Eligible goods must be "goods originating in Canada" as provided in General Note 3(c)(vii)(A), HTSUSA.

Pursuant to General Note 3(c)(vii)(B), HTSUSA, 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

(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 subdivisions (c)(vii)(F), (G), (H), (I), (J) and (R) of this note

As the fabric was not wholly obtained or produced in the territory of the United States or Canada, and the processing of the fabric from China resulted in a transformation effecting a change in tariff classification (from subheading 5512.21.0000, HTSUSA, to subheading 6214.30.0000, HTSUSA), we refer to General Note 3(c)(vii):

Whenever the processing or assembly of goods in the territory of Canada and/or the United States results in one of the changes in tariff classification in Canada described by the rules set forth in subdivision (c)(vii)(R) of this note, such goods shall be considered to have been transformed in the territory of Canada and shall be treated as goods originating in the territory of Canada, provided that such processing or assembly occurs entirely within the territory of Canada and/or the United States and that such goods have not subsequently undergone any processing or assembly outside of Canada or the United States that improves the goods in condition or advances them in value.

General Note 3(c)(vii)(R) provides the change in tariff classification rules for Section XI, HTSUSA. General Note

A change to any heading of chapter 62 from any heading outside that chapter other than headings 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407, 5408, 5512 through 5516, or 6001 through 6002; provided that, such goods are both cut and sewn in the territory of Canada and/or the United States.

According to that provision, in order for goods to be considered transformed into originating material in the territory of Canada, a change to any heading of chapter 62 must occur from a heading other than those mentioned. As the change that occurs in this case is from heading 5512, which is a heading specifically mentioned and excluded, the process performed in Canada does not transform the scarf for the purposes of it being considered "originating" in the territory of Canada.

IV. Marking

Section 134.11 of the Customs Regulations (19 CFR 134.11) sets forth principles of country of origin marking. Therein is stated:

Unless excepted by law, section 304 Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article, at the time of importation into the Customs territory of the United States. Containers of the articles excepted from marking shall be marked with the name of the country of origin of the article unless the container is also excepted from marking.

HOLDING:

The scarf is classified in subheading 6214.30.0000, HTSUSA, which provides for shawls, scarves, mufflers, mantillas, veils and the like: of synthetic fibers. The applicable rate of duty is 10.6 percent, ad valorem. The scarf requires a visa from China for textile category 659.

The country of origin for the scarf is China and the article should be marked accordingly. It does not qualify for special duty treatment under the CFTA.

The designated textile and apparel category may be subdivided into parts. If so, the 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 negotiations and changes, to obtain the most current information available, we suggest 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 updated weekly and is available at the local Customs office.

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

Sincerely,

John Durant, Director

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