The tariff classification and status under the North American Free Trade Agreement (NAFTA), of panty liners from Canada; Article 509

NY L84303 April 22, 2005 CLA-2-63:RR:NC:N3:351 L84303 CATEGORY: Classification TARIFF NO.: 6307.90.9889 Diane L. Weinberg Meeks & Sheppard Attorneys at Law 330 Madison Avenue 39th Floor New York, NY 10017 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of panty liners from Canada; Article 509 Dear Ms. Weinberg: In your letter dated April 19, 2005, you requested a tariff classification ruling on the status of “pantiliners” from Canada under the NAFTA. The submitted sample is identified as a “Carefree Perfect Fit Daily Pantiliner.” You indicate that it is imported packaged for retail sale. Each one is composed of two layers. You describe the construction as follows: The top layer is composed of 100 percent hot thru-air polypropylene/ polyethylene bi-component, and the bottom layer is composed of hot thru-air 75 percent polypropylene/polyethylene bi-component and 25 percent rayon fibers. We have determined that these are non-woven fabrics. The applicable subheading for the panty liner will be 6307.90.9889, Harmonized Tariff Schedule of the United States (HTS), which provides for other made up textile articles, other. The rate of duty will be 7 percent ad valorem. You state that the pantiliners will be manufactured in Canada of non-originating fabrics from China. General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 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 non-originating 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 fabrics will be cut to shape and assembled into the finished product in Canada. To qualify under this provision, the non-originating material, the non-woven fabrics, must undergo the requisite change in tariff classification required in General Note 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 6002, 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 General Note 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 pantiliner, and thus the component that determines the tariff classification of the good, is the absorbent layer, the non-woven fabric composed of 75 percent polypropylene/ polyethylene bi-component and 25 percent rayon fibers. As this non-woven fabric is classifiable in heading 5603, HTS, and is cut and assembled in Canada, the tariff shift mandated in General Note 12(t)/63 is satisfied. Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUSA General Note 12(b)(ii)(A). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. 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. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division