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

N081741 November 20, 2009 CLA-2-94:OT:RR:NC:TA:349 CATEGORY: Classification TARIFF NO.: 9404.90.2000 Mr. John Mulvihill UPS Supply Chain Solutions One UPS Way Champlain, NY 12919 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of support cushions from Canada; Article 509 Dear Mr. Mulvihill: In your letter dated October 20, 2009 you requested a ruling on the status of support cushions from Canada under the NAFTA. This request is made on behalf of Therapeutica, Inc. The subject merchandise consists of support cushions identified as the Ultimate Commuter Pillow, the Ultimate Travel Sleeping Pillow, the Ultimate Healthcare Pillow, the Ultimate Cervical Sleeping Pillow, the Ultimate Full Spine Back Support and the Ultimate Spinal Orthotic/Auto Support. All of these items are made from molded or contoured plastic foam pillows/cushions with zippered textile fabric covers. They are designed to provide support. Samples where not submitted; however, the pillows and cushions were the subject of New York Ruling Letters N070627 and N070772 both dated September 1, 2009. The zippered fabric covers will be made from either a knit synthetic fleece, a knit 50 percent cotton and 50 percent polyester fabric, a woven 50 percent cotton and 50 percent polyester fabric or a knit polyamide fabric with a polyurethane transfer coating. You have proposed four manufacturing scenarios. With the exception of the type of fabric, the first three scenarios are the same. The manufacturing operations for the pillows and cushions are as follows: Scenarios A, B and C China, Taiwan, India or Pakistan: -knit fleece fabric, 50/50 cotton and polyester fabrics are formed. -fabric is cut to size and shape. -components are sewn to form a zippered pillow/cushion cover. -covers are shipped to Canada. Canada: -injection molded foam support is made (may contain a polypropylene insert). -molded foam is placed in the cover and zipper is closed. -pillows and cushions are packaged and shipped. Scenario D England: - polyamide knit fabric is formed. -fabric is transfer coated and shipped to the United States. United States: -fabric is cut to size and shape. -components are “welded” to form a zippered pillow/cushion cover. -covers are shipped to Canada. Canada: -injection molded foam support is made. -molded foam is placed in the cover and zipper is closed. -pillows and cushions are packaged and shipped. As stated in the cited rulings, the applicable tariff provision for the support pillows and cushions will be 9404.90.2000, Harmonized Tariff Schedule of the United States (HTSUS), 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: pillows, cushions and similar furnishings: other. The general duty rate will be 6 percent 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 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 The support pillows and cushions undergo processing operations in Canada and in one scenario, the United States and Canada. Canada and the United States are countries provided for under the North American Free Trade Agreement. These products will be eligible for the NAFTA preference if they qualify to be marked as a good of Canada and if they are wholly obtained or produced in the NAFTA territories or transformed in Canada so that the non-originating material undergoes a change in tariff classification described in subdivision (t) to General Note 12, HTSUS. For heading 9404, HTSUS, the appropriate subdivision (t) rule states that: A change to subheading 9404.90 from any other chapter, except from headings 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516. When the various pillow covers enter Canada, they are classified in heading 6304, HTSUS. As heading 6304, HTSUS is not excepted by subdivision (t), the merchandise undergoes the requisite change in tariff classification and the support pillows and cushions qualify for NAFTA preference. The fact that the covers are merely placed over the foam pillows/cushions and zippered closed does not disqualify the support pillows/cushions from being considered as originating goods. A similar issue (merely packaging with a retail set) was addressed in Headquarters Ruling letter (HQ) 561326, dated April 26, 1999. In that ruling, Customs and Border protection explained that there is no language in General Note 12, HTSUS, which would disqualify a good from obtaining originating status by virtue of merely having undergone simple packaging or combining operations. Thus, non-originating items may undergo the requisite tariff shift under General Note 12 (t), HTSUS, when combined in Canada with originating items. Pursuant to the analysis set forth above the support pillows and cushions qualify as originating goods. Accordingly, they will be entitled to the special "CA" rate of duty if they qualify to be marked as a good of Canada and provided that all other NAFTA requirements are met. 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 9404.90 Except for goods of subheading 9404.90 provided for in paragraph (e)(2) of this section, 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. Subheading 9404.90.20 is not included in the paragraph (e)(2) exception to the above tariff shift rule. The pillows and cushions are made from plastic foam and a textile cover. The cover is made from a fabric that was formed in a single country. As the fabric comprising the pillows and cushions is formed in a single country, that is, China, Taiwan, India, Pakistan or England, as per the terms of the tariff shift requirement, country of origin is conferred in China, Taiwan, India, Pakistan or England. However, the support pillows and cushions qualify as a NAFTA originating good. As stated in Section 102.19(a): Except in the case of goods covered by paragraph (b) of this section, if a good which is originating within the meaning of §181.1(q) of this chapter is not determined under §102.11(a) or (b) or §102.21 to be a good of a single NAFTA country, the country of origin of such good is the last NAFTA country in which that good underwent production other than minor processing, provided that a Certificate of Origin (see §181.11 of this chapter) has been completed and signed for the good. As the pillows and cushions qualify as a NAFTA originating good, applying the terms of Section 102.19(a), the country of origin of the support pillows and cushions is Canada. The pillows will be entitled to the special "CA" duty rate, provided that all other requirements of the NAFTA 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 John Hansen at (646) 733-3043. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division