NY F86325 - Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a comforter set; 19 CFR 102.21(c)(1); wholly obtained or produced in a single country; 19CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; 19 CFR 102.21(d); sets; Article 509 - United States International Trade Commision Rulings

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NY F86325

May 24, 2000

CLA-2-RR:NC:TA:349 F86325

CATEGORY: CLASSIFICATION

Ms. Mary Beth Osborne
W-C Imports dba W-C Designs
905 East Katella Avenue
Anaheim, CA 92805

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for a comforter set; 19 CFR 102.21(c)(1); wholly obtained or produced in a single country; 19CFR 102.21(c)(5); last country where an important assembly or manufacturing process occurred; 19 CFR 102.21(d); sets; Article 509

Dear Ms. Osborne:

This is in reply to your letter dated April 15, 2000, received by this office on April 26, 2000, requesting a classification, status under the NAFTA and country of origin determination for a comforter set which will be imported into the United States.

FACTS:

The subject merchandise, referred to as a Comforter Bedding Ensemble, consists of a comforter, bed skirt and two pillow shams. A sample of Style 6354, "Versailles", was submitted. The sets will be made in queen and king sizes. One side of the reversible comforter is made from a 55 percent cotton and 45 percent polyester jacquard woven fabric, while the other side is made from a 65 percent polyester and 35 percent cotton printed woven fabric. The comforter is filled with a polyester batting fabric and quilted through all three layers. A piping cord measuring approximately 8-9 millimeters is inserted into the edge seam on three sides. The piping is made from a cotton fill and a strip of the jacquard fabric.

The bed skirt consists of a 65 percent polyester and 35 percent cotton plain woven platform section and a ruffle or skirt made from the same 65 percent polyester and 35 percent cotton printed fabric as the comforter. The skirt has a 14-inch drop. The front sides of the pillow shams are made from the same jacquard fabric as the comforter. The back is made from the printed fabric and features an overlapping flap type closure. The shams are sewn to create a 4-inch wide flange or picture frame effect. A piping cord is inserted in the edge seams. The front panels of the shams contain a layer of polyester batting. The comforter set will be packed for retail sale in a vinyl bag. The manufacturing operations for the comforter set are as follows:

Taiwan:
-55% cotton and 45 % polyester jacquard shell fabric is woven. -fabric is piece dyed.
-rolls of fabric are shipped to Mexico.

Mexico:
-65% polyester and 35% cotton shell and skirt fabric is woven. -fabric is printed.
-65% polyester and 35% cotton platform fabric is woven. -cotton fill for the piping is formed.
-polyester batting fabric is made.
-the fabrics are cut, sewn, stuffed, quilted, etc., forming the various set components. -comforter, bed skirt and shams are packed for retail sale and shipped to the U.S.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin of the subject merchandise?

CLASSIFICATION:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (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.

The comforter and pillow shams are classifiable in Heading 9404 as articles of bedding and similar furnishing that are stuffed or fitted. The bed skirt is classifiable under the provision for curtain and bed valances in Heading 6303. Since classification of the submitted merchandise in a single heading cannot be determined by applying GRI 1, we must apply the other GRI's.

GRI 3 provides for goods that are, prima facie, classifiable in two or more headings. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. According to the Explanatory Notes, the official interpretation of the HTSUSA at the international level, "goods put up in sets for retail sale" refers to goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking.

The subject set meets the qualifications of "goods put up in sets for retail sale". The components of the set consist of three different articles which are, prima facie, classifiable in different headings. They are put up together to carry out the specific activity of furnishing a bed and they are packaged for sale directly to users without repacking. It is our opinion that the reversible comforter is the component that gives this set its essential character.

The applicable subheading for the comforter set will be 9404.90.8522, 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: quilts, eiderdowns, comforters and similar articles... with outer shell of man-made fibers. The general rate of duty will be 13.5 percent ad valorem.

The comforter and bed skirt fall within textile category designation 666 while the shams fall within textile category designation 369. 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.USTREAS.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 subject comforter set undergoes processing operations in Mexico which is a country provided for under the North American Free Trade Agreement (NAFTA). General Note 12, HTSUSA, incorporates Article 401 of the North American Free Trade Agreement (NAFTA) into the HTSUSA. Note 12(a) provides, in pertinent part:

(ii) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Mexico under the terms of the marking rules... and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "MX" in parentheses, are eligible for such duty rate... .

Accordingly, the comforter set at issue will be eligible for the "Special" "MX" rate of duty provided they are NAFTA "originating" goods under General Note 12(b), HTSUSA, and they qualify to be marked as goods of Mexico. Note 12(b) provides in pertinent part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if-

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-

(A) except as provided in subdivision (f) of this note, each of the nonoriginating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or, (B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or

Accordingly, the subject merchandise qualifies as a good of Mexico only if the good has been transformed in Mexico such that the non-originating material (jacquard fabric from Taiwan) undergoes the applicable change in tariff.

The comforter set is classified in subheading 9404.90, HTSUSA. For merchandise classifiable in this heading subdivision (t), chapter 94, 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 material from Taiwan enters Mexico it is classifiable in either heading 5210 or heading 5211, HTSUSA. As fabrics of these headings are excepted from meeting the tariff change to subheading 9404.90, HTSUSA, the non-originating material from Taiwan does not undergo the requisite change in tariff classification. Accordingly, the comforter sets 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.

Additionally, Section 102.21(d) addresses the treatment of sets for country of origin purposes. Section 102.21(d) provides the following:

Where a good classifiable in the HTSUS as a set includes one or more components that are textile or apparel products and a single country of origin for all of the components of the set cannot be determined under paragraph (c) of this section, the country of origin of each component of the set that is a textile or apparel product shall be determined separately under paragraph (c) of this section.

The classification of the subject comforter set is based on the comforter, however, per the terms of Section 102.21(d), one must determine whether or not a single country of origin exists for the entire set.

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 bed skirt was wholly obtained or produced in a single country, that is, Mexico, country of origin for the bed skirt is conferred in Mexico. However, as the comforter and pillow shams are not wholly obtained or produced in a single country, territory or insular possession, 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

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 subject comforter and pillow shams are made from two different shell fabrics and a batting fabric. Accordingly, as the fabrics comprising the comforter are formed in more than one country, Section 102.21(c)(2) is inapplicable for the comforter and pillow shams.

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 pillow shams are not knit and heading 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 shams, the fabric making process of the outer shell constitutes the most important manufacturing process.. However, the fabric for the shells of the comforters and shams 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 pillow shams, the country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Mexico. As a single country of origin for all of the components in the set has been determined to be Mexico, the country of origin for the set is Mexico.

HOLDING:

The subject comforter set is classified in subheading 9404.90.8522, HTSUSA, which provides for other quilts, eiderdowns, comforters and similar articles, with an outer shell of man-made fibers.

The country of origin of the comforter set is Mexico. Based upon international textile trade agreements products of Mexico falling in textile categories 666 and 369 are not subject to quota or visa restrictions. The comforter set is not entitled to the NAFTA “MX” special duty.

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,

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