The tariff classification and status under the North American Free Trade Agreement (NAFTA), of raschel knit lace which was made in Mexico and beaded in China; Article 509

NY 809317 April 24, 1995 CLA-2-58:S:N:N6:351 809317 CATEGORY: Classification TARIFF NO.: 5810.92.9080 Mr. Tom Paciaffi Coronet Brokers Inc. P.O. Box 300764 Jamaica, NY 11430-0764 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of raschel knit lace which was made in Mexico and beaded in China; Article 509 Dear Mr. Paciaffi: In your undated letter, received here on April 17, 1995, you requested a tariff classification ruling on the status of beaded raschel knit lace which was knit in Mexico and further processed in China, under the North American Free Trade Agreement (NAFTA). You have submitted samples of "Lace A" and Lace B," two 100% polyamide raschel knit simulated lace fabrics, which you state were knitted in Mexico and then sent to China, where beads, pearls and sequins were sewn onto the material to highlight the lace patterns. We estimate that the beads, pearls and sequins cover less than one-tenth of the surface area of the fabrics, which are over 30 centimeters in width. The applicable tariff provision for "Lace A" and "Lace B" will be 5810.92.9080, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for embroidery in the piece, in strips or in motifs; other embroidery; of man-made fibers; other; other; other. The general rate of duty will be 13.6 percent ad valorem. Although they are considered products of Mexico rather than China, these fabrics do not qualify for preferential treatment under the NAFTA because, as stated in General Note 12(l) HTSUSA, regarding the NAFTA Rules of Origin, A good shall not be considered to be an originating good by reason of having undergone production that satisfies the requirements of this note if, subsequent to that production, the good undergoes further production or any other operation outside the territories of the NAFTA parties, other than unloading, reloading or any other operation necessary to preserve it in good condition or to transport the good to the territory of Canada, Mexico and/or the United States. You suggest in your letter that the duty would be paid "only for the materials and labor" and that "the lace portion is duty free." This is not correct; duty would be assessed on the full value of this merchandise, with no reduction or allowance of any kind for the Mexican-made materials. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. 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, Office of Regulations and Rulings, U.S. Customs Service, 1301 Constitution Ave. N.W., Franklin Court, Washington, D.C. 20229. Sincerely, Jean F. Maguire Area Director New York Seaport