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NY M84962

July 11, 2006

CLA-2-63:RR:NC:N3:351 M84962


TARIFF NO.: 6307.90.9889

Doren Anderson
Campbell River Netloft Ltd.
P.O. Box 197
Campbell River, B.C., Canada
V9W 5A7

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of fish farm nets from Canada; Article 509

Dear Mr. Anderson:

In your letters dated June 20, 2006, and Sept. 1, 2005, you requested a ruling on the status of nets used as pens in fish farming operations under the NAFTA. The finished nets are produced by your company in Canada.

You import from Norway a fabric that you refer to as mesh. It is also known as powerknit fabric, and would be classifiable in heading 6005, Harmonized Tariff Schedule of the United States (HTSUS), as you state. At your facility, you cut and sew the fabric to necessary sizes (up to 500 feet in length and width, or more) and reorient the mesh from a diamond pattern to “on square,” like the lines on graph paper. All cutting and sewing is done primarily by hand. The finished nets can be squares, rectangles, round, conical, or whatever shape is ordered by your customer.

Ropes are used to form the structure of the finished net. The ropes are sewn along the seams, along the top edges, and vertically at intervals to support the weights that will hold the nets down in the water and help give the net its desired shape, defining the corners and edges.

The applicable tariff provision for the finished nets will be 6307.90.9889, HTSUS, which provides for other made up textile articles, other. The general rate of duty will be 7% ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

General Note (GN) 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. GN 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

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 non-originating 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

(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--

(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or

(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.

You state that the powerknit fabric will be cut to shape and assembled into the finished product in Canada. To qualify under this provision, the non-originating material, that is, the powerknit fabric imported from Norway, must undergo the requisite change in tariff classification required in GN 12(t)/63. We refer to that tariff shift rule which states, at (4):

A change to headings 6304 through 6310 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 6006 [emphasis added], provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

Chapter Rule 1 of GN 12(t), Chapter 63, states:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for the good.

It is the opinion of this office that the essential character of the completed net, and thus the component that determines the tariff classification of the good, is the powerknit fabric. As this fabric is classifiable in heading 6005, HTSUS, the tariff shift mandated in General Note 12(t)/63 is not satisfied. The fish farm nets are not eligible for duty-free treatment under NAFTA.

The merchandise does not qualify for preferential treatment under the NAFTA because none of the above requirements are met.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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 Mitchel Bayer at 646-733-3102.

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 and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.


Robert B. Swierupski

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