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NY K82104




January 14, 2004

CLA-2-RR:NC:TA:349 K82104

CATEGORY: CLASSIFICATION

Mr. Rick Boswell
Ortiz International, Inc.
P.O. Box 1505
Laredo, TX 78042

RE: Classification, status under the North American Free Trade Agreement (NAFTA) and country of origin determination for bed sheet sets; 19 CFR 102.21(c)(2); tariff shift; Article 509

Dear Mr. Boswell:

This is in reply to your letter dated December 18, 2003, requesting a classification, status under the NAFTA and country of origin determination for bed sheet sets which will be imported into the United States. This request is being made on behalf of Kaltex Home, SA de CV.

FACTS:

The subject merchandise consists of bed sheet sets. Samples were not submitted. The sets will contain a flat sheet, fitted sheet and one or two pillowcases. They will be made from a 100 percent cotton woven fabric. The fabric may be printed or dyed but will not be napped. You have indicated that the sets will not contain any embroidery, lace, braid, edging, trimming, piping or applique work. Two manufacturing scenarios have been proposed. The manufacturing operations for the sheet sets are as follows:

Scenario 1:
PAKISTAN:
-cotton fabric is woven.
-greige fabric is shipped to Mexico.

MEXICO:
-cotton fabric is processed (singeing, desizing, bleaching, caustification, dying or printing, finishing, weighting, calendaring and shrinking). -fabric is cut/sewn/elasticized/hemmed forming the sheets and pillowcases. -sheets and pillowcases are packed as sets and shipped.

Scenario 2:
PAKISTAN:
-cotton fibers are spun into yarns.
-yarns are shipped to Canada.

CANADA:
-yarns are woven into a fabric.
-greige fabric is shipped to Mexico.

MEXICO:
-cotton fabric is processed (singeing, desizing, bleaching, caustification, dying or printing, finishing, weighting, calendaring and shrinking). -fabric is cut/sewn/elasticized/hemmed forming the sheets and pillowcases. -sheets and pillowcases are packed as sets and shipped.

ISSUE:

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

CLASSIFICATION:

Although referred to as sets, the instant merchandise does not meet the qualifications of “goods put up in sets for retail sale” as the components of the sets are classifiable within the same subheading. Therefore, each item in the set will be classified separately.

The applicable subheading for the printed pillowcases will be 6302.21.9010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not napped pillowcases other than bolster cases. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the printed sheets will be 6302.21.9020, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not napped sheets. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the dyed pillowcases will be 6302.31.9010, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen: of cotton: other: not napped pillowcases, other than bolster cases. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the dyed sheets will be 6302.31.9020, HTSUSA, which provides for bed linen, table linen, toilet linen: other bed linen: of cotton: other: not napped sheets. The general rate of duty will be 6.7 percent ad valorem.

The pillowcases fall within textile category designation 360 and the flat and fitted sheets fall within textile category designation 361. 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 Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.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 sheets and pillowcases undergo processing operations in Mexico or Canada and Mexico which are countries provided for under the North American Free Trade Agreement. The sheets and pillowcases at issue will be eligible for the NAFTA preference if they qualify to be marked as a good of Canada or Mexico and if they are transformed in Canada or Mexico so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUSA. For heading 6302, HTSUSA, subdivision (t), Chapter 63, rule 1, states that:

A change to headings 6301 through 6302 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapters 54 through 55, or headings 5801 through 5802 or 6001 through 6002, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one of more of the NAFTA parties.

Additionally, the subdivision (t) rule for cotton fabric in Chapter 52 (rule 2) states that:

A change to headings 5208 through 5212 from any other heading outside that group, except from headings 5106 through 5110, 5205 through 5206, 5401 through 5404 or 5509 through 5510.

When the cotton woven fabrics for the sheets and pillowcases leave Pakistan, they are classified in heading 5208 or 5209, HTSUSA, depending on the weight. When the cotton yarns in scenario 2 leave Pakistan they are classified in heading 5205, HTSUSA. As yarns of heading 5205 and fabrics of headings 5208 and 5209, HTSUSA, are excepted from meeting the tariff change to heading 6302, HTSUSA, and yarns of 5205 are excepted from meeting the tariff change to heading 5208/5209, the non-originating material from Pakistan does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference.

However, the sheet sets in scenario 2 may be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, HTSUSA, Additional U.S. Note 4(a), up to the annual quantities specified in subdivision (c) of Note 4. Goods of Chapters 52 through 55, 58, 60 and 63 that are woven or knit in the territory of a NAFTA party from yarn produced or obtained outside the territory of one of the NAFTA parties, are eligible for the preferential rate of duty. Upon completion of the required documentation and up to the specified annual quantities, the scenario 2 sheet sets that are made of fabric woven from Pakistani yarns may be eligible for the preferential rate of Free.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the 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 merchandise 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

6301-6306 Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6301 through 6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

Subheadings 6302.21 and 6302.31 are not included in the paragraph (e)(2) exception to the above tariff shift rule. As the fabric comprising the sheets and pillowcases is formed in a single country, that is, Pakistan in scenario 1 and Canada in scenario 2, as per the terms of the tariff shift requirement, country of origin is conferred in Pakistan for scenario 1 and Canada for scenario 2.

HOLDING:

The country of origin of the sheet sets is Pakistan in scenario 1 and Canada in scenario 2. Based upon international textile trade agreements products of Pakistan are subject to quota and the requirement of a visa. Although the sheet sets are not eligible for the NAFTA preference, the scenario 2 sheet sets are eligible for the tariff preferential level assuming the tariff preferential level is available (annual quantity specified in Additional U.S. Note 4 to Section XI, HTSUSA) and provided the appropriate documents are submitted.

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 646-733-3043.

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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