Classification and country of origin of comforters

HQ 962758 September 27, 1999 CLA-2 RR:CR:TE 962758 jb CATEGORY: Classification TARIFF NO: 9404.90.8020 Bill Jerome H.A. & J.L. Wood, Inc. 231 N. 3rd Street Pembina, North Dakota 58271 RE: Classification and country of origin of comforters Dear Mr. Jerome: This is in response to your letter, dated March 9, 1999, on behalf of your client, Woollies of Northern Canada, wherein you request classification under the Harmonized Tariff Schedules of the United States (HTSUS), for wool comforters. Additionally, you ask that this office determine the status under the North American Free Trade Agreement (NAFTA) and the country of origin for this merchandise. FACTS: The merchandise at issue consists of what is referred to as a crib size comforter measuring 60 inches by 45 inches and composed of a 100 percent cotton yarn dyed flannel fabric outer shell which is filled with a batting made of 100 percent wool fabric. You state that in addition to the submitted crib size, the comforter will be manufactured in king, queen, large double, regular double, twin and single sizes. The manufacturing operations for the subject merchandise are stated as follows: China cotton fabric is woven and finished Canada wool is gathered, carded, washed and batted cotton fabric is cut to size and shape for the outer shell shell is stuffed, sewn closed and quilted comforter is packed for shipment ISSUE:  1. What is the proper classification for the merchandise? 2. Does the merchandise qualify for treatment under the NAFTA? 3. What is the country of origin for the subject merchandise? LAW AND ANALYSIS: Classification Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI). GRI 1 requires that classification be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied, in the order of their appearance. Heading 9404, HTSUS, provides for mattress supports; 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. As the subject comforters are composed of both a cotton outer shell and a wool fabric batting, there are two competing classification provisions for this merchandise. That is, the classification for this merchandise will be contingent on whether the classification will be based on the cotton shell, that is, subheading 9404.9080, or the internal wool batting, that is, 9404.90.85. GRI 2(b) directs that goods consisting of more than one material or substance are to be classified according to the principles of GRl 3. GRI 3(a) provides, in pertinent part, that when two or more headings refer to part only of the materials or substances in a composite good, the headings are to be considered equally specific. As the subject merchandise consists of two fabrics, cotton and wool, each heading refers only in part to the subject merchandise, and both headings are considered equally specific. Thus, GRI 3(a) is not applicable. GRI 3(b) provides that mixtures and composite goods consisting of different materials or made up of different components, shall be classified as if they consisted of the materials or component which gives them their essential character. In PillowTex Corporation v. United States, 983 F. Supp. 188, Slip Op. 97-146, dated October 28, 1997, and affirmed by the United States Court of Appeals for the Federal Circuit, Slip Op. 98-1227, dated March 16, 1999, in classifying comforters constructed with a down proof outer shell made of woven cotton and an internal stuffing of down, the court determined that the essential character of the down comforter was found in its ability to insulate and wick moisture away from a sleeping person while maintaining a comfortable temperature. These characteristics were attributed to the down. In reviewing the facts for the subject merchandise it is the opinion of this office that the court's comments with respect to the down cannot be extended to the wool batting which is internally stuffed in the subject merchandise. Although the wool batting also provides an element of warmth to the comforter, the down batting in PillowTex is a specialized internal stuffing with exceptional characteristics that are ideal for purposes of warmth and comfort. In the case of the subject merchandise, the cotton outer shell gives the comforter its form, shape and tactile qualities. Accordingly, the classification of the subject merchandise is premised on the essential character being imparted by the cotton outer shell and classification devolves to subheading 9404.90.8020, HTSUSA. North American Free Trade Agreement (NAFTA) Eligibility The subject comforter set undergoes processing operations in Canada which is a country provided for under the North American Free Trade Agreement (NAFTA). General Note 12, HTSUSA, incorporates Article 401 of the NAFTA into the HTSUSA. Note 12(a) provides, in pertinent part: * * * (i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada 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 "CA" in parentheses, are eligible for such duty rate .... [Emphasis added] Accordingly, the comforter set at issue will be eligible for the "Special .... CA" rate of duty provided it is a NAFTA "originating" good under General Note 12(b), HTSUSA, and it qualifies to be marked as a good of Canada. 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 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 * * * The subject merchandise qualifies for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A) are met, that is, if the merchandise is transformed in the territory of Canada so that the non-originating material undergoes a change in tariff classification as described in subdivision (t). The comforter is classifiable in subheading 9404.90.8020, HTSUSA. For subheading 9404.90, HTSUS, subdivision (t), Chapter 94, rule 7, states that: A change to subheading 9404.90 from any other chapter, except from headings 5007, 5l 11 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516. In the case of the subject merchandise, as the non-originating material, that is, the Chinese cotton fabric which is classified in heading 5208, HTSUS, is excepted by subdivision (t) for subheading 9404.90, HTSUS, the non-originating material from China does not undergo the requisite change in tariff classification. Accordingly, the merchandise is not eligible for the NAFTA preference. Country of origin On September 5, 1995, Customs published in the Federal Register (60 FR 46188) T.D. 95-69 which set forth final amendments to the Customs Regulations to implement the provisions of section 334(b) of the Uruguay Round Agreements Act ("the Act"), Public Law 103-465, 108 Stat. 4809, hereinafter 19 U.S.C. 3592, regarding the country of origin of textile and apparel products. These final regulations apply to goods entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. The regulatory provisions in T.D. 95-69 that implement the basic origin principles of section 334(b) of the Act are contained in a new § 102.21 of the Customs Regulations ( 19 CFR 102.21 ). The final rule for the rules for determining country of origin of a good for purposes of Annex 311 of the NAFTA was published by Customs on June 6, 1996, in the Federal Register (61 FR 28932). Therein it was stated, in pertinent part: New §102.21 was modeled on the approach taken in the interim Part 102 texts as published in TD. 94-4 and thus incorporates a general statement of applicability (paragraph (a)), various definitions (paragraph (b)), general origin rules (paragraphs (c) and (d)), and specific tariff shift and/or other requirements (paragraph (e)) that apply under the second general rule. Of particular note for purposes of the present document is the definition of "textile or apparel product" in § 102.21 (b)(5) which delineates the class of goods covered by the § 102.21 rules. That definition identifies those goods with reference to classification in the HTSUS and refers to Chapters 50 through 63 (that is, all of Section XI) of the HTSUS as well as to specific headings and 6-, 8- or 10-digit subheadings of the HTSUS that fall outside Section XI. Thus, if a good is classifiable in an HTSUS provision listed in § 102.21 (b)(5), precedence must be given to the § 102.21 rules over any other regulatory provision with regard to that good, including any origin rules contained elsewhere in part 102. Accordingly, as the subject merchandise is classified in heading 9404.90.80, HTSUS, a textile article identified by § 102.21 (b)(5), the § 102.21 rules take precedence over any other rules of origin to determine the appropriate country of origin. 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 foreign material 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) 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": 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. As the comforter is comprised of fabric sourced in more than one country, there is no single country in which the fabric was formed. Accordingly, Section 102.21 (c)(2) is not applicable to this merchandise. Paragraph (c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(l) 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 this merchandise is not knit to shape and subheading 9404.90, HTSUS, is excepted from provision (ii), paragraph (c)(3) is inapplicable. Paragraph (c)(4) states that, "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 comforter the most important manufacturing process occurs at the time of the fabric making. Although the fabric for the subject comforter is sourced in more than one country, as already discussed, the most important processing occurs at the time the outer shell fabric is woven. It is this outer shell which gives the comforter its form, shape and tactile qualities. As such, the country of origin of the subject merchandise is the country in which the outer shell is formed, that is China. See also HQ 959778, dated November 29, 1996. HOLDING: The subject merchandise is properly classified in subheading 9404.90.8020, HTSUSA, which provides for mattress supports; 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: of cotton, not containing any embroidery, lace, braid, edging, trimming, piping exceeding 6.35 mm or applique work: quilts, eiderdowns, comforters and similar articles. The applicable general column one rate of duty is 4.7 percent ad valorem and the quota category is 362. The subject merchandise does not qualify for treatment under the NAFTA. The country of origin of the subject merchandise is China. The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent negotiations and changes, we suggest that your client check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at the local Customs office. Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) categories, your client should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements. 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 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. 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. Sincerely, John Durant, Director Commercial Rulings Division