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NY C87233




May 22, 1998

CLA-2-RR:NC:TA:351 C87233

CATEGORY: CLASSIFICATION

Mr. Joseph R. Hoffacker
Barthco Trade Consultants, Inc.
7575 Holstein Avenue
Philadelphia, PA 19153

RE: Classification and country of origin determination for braided cord produced in Macau from yarn supplied from either Canada, Korea, Japan, China, Taiwan or the United States; 19 CFR 102.21(c).

Dear Mr. Hoffacker:

This is in reply to your letter dated April 21, 1998, on behalf of Coghlan's Ltd., Winnipeg, Canada, requesting a classification and country of origin determination for braided cord produced in Macau from yarn supplied from either Canada, Korea, Japan, China, Taiwan or the United States. No sample was submitted.

FACTS:

You state that polypropylene yarn will be shipped from either Canada, Korea, Japan, China, Taiwan or the United States to Macau. The yarn is described as 900D/90F multifilament polypropylene yarn. From your description we assume that it will not be binder or baler twine. It will be further processed in Macau. You outline the following 6 processing operations which will take place in Macau:

1) Setting the yarn - combining the yarn together for forming larger denier according to the required size and firmly set in uniformity on stretching and setting machine or twisting machines for twisting, if necessary.

2) Bobbining - winding by bobbin machine into bobbins before braiding.

3) First braiding - the bobbins are put on the braiding machine to braid the center of the cord.

4) Second braiding - the required number of bobbins are put on the braiding machine to braid coat over the center of the cord for the required size.

5) After quality checking, the finished braided cords are put on the reeling machine to make up the reel of the required length.

6) Labeling the reel - wrap the reel with shrinkage film by shrinkage machine and then pack into boxes and cartons.

ISSUE:

What is the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for the cord is 5607.49.3000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for twine, cordage, ropes and cables, whether or not plaited or braided, ... of polyethylene or polypropylene, other, other. The duty rate is 5.8 percent ad valorem.

This cord falls within textile category designation 669. 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. 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.

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.

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." As the subject cord 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 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

5607.49.3000 A change to subheading 5607 if the good is of continuous filaments, including strips, a change of those filaments, ... to heading 5607 from any other heading, except from heading 5001 through 5007, 5401 through 5406, and 5501 through 5511, and provided that the change is the result of an extrusion process.

The subject cord in this scenario, undergoes a change to subheading 5607.49.3000, HTS, from heading 5402 or 5404. Since this change is excluded by the rule, Section 102.21(c)(2) is inapplicable and our hierarchical application of Section 102.21(c) continues.

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.

Although twisting of a yarn is considered an assembly operation, braiding is viewed as a manufacturing operation (HRL 555594 LS of May 16, 1990 noted). Therefore, CFR 102.21 (c)(3) is inappropriate.

Section 102.21(c)(4) provides:

"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."

The statutory language of 19 U.S.C. 1334 (b)(1)(B) states:

"(b) PRINCIPALS. -

(1) IN G ENERAL. - Except as otherwise provided for by statute, a textile or apparel product, for purposes of the customs law and the administration of quantitative restrictions, originates in a country, territory or insular possession, and is the growth, product, or manufacture of that country, territory, or insular possession, if -

...(B) the product is a yarn, thread, twine, cordage, rope, cable or braiding and - ...

...(ii) the continuous filament is extruded in that country, territory, or possession...".

Section 1334, 19 U.S.C. directs that the most important manufacturing or processing for this merchandise is the extrusion of the yarn. Since section 102.21 (c)(4) looks to the country, territory, or insular possession in which the "most important" assembly or manufacturing process occurred as conferring origin, for yarn which was extruded in either Canada, Korea, Japan, China or Taiwan, the country of origin is deemed to be either Canada, Korea, Japan, China, or Taiwan.

In the case where yarn of U. S. origin is sent abroad for braiding, a different set of rules applies. Customs Regulations, Section 12.130 (c) (1) states:

"Chapter 98, S ubchapter II, Note 2, Harmonized Tariff Schedu le of the United States, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposes of the Tariff Act of 1930, as amended. In order to have a single definition of the term "product of" and, therefore, a single country of origin for a textile or textile product, notwithstanding paragraph (b), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, may not, upon its return to the U.S., be considered a product of the U.S."

Section 102.21(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." For the case of yarn of U.S. origin, braided in Macau, the last country of assembly or processing would be Macau. Macau is therefore, the country of origin of yarn of U.S. origin sent to Macau for braiding.

HOLDING:

The country of origin of the braided cord is either Canada, Korea, Japan, China, Taiwan, or Macau. Based upon international textile trade agreements products of Macau are subject to the requirement of a visa.

You had previously submitted a classification request on this same issue. That request was the subject of NY ruling C83113. In that ruling, we had held that the country of origin of the braid was the country in which the braiding took place. This was in error and we have applied for a modification of that ruling.

The holding set forth above applies only to the specific factual situation and merchandise identified in this ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This sections 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.

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 Camille Ferraro at 212-466-5885.

Sincerely,

Robert B. Swierupski
Director

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