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

N108600 July 2, 2010 CLA-2-58:OT:RR:NC:TA:352 CATEGORY: Classification TARIFF NO.: 5801.36.0010 Mr. Chris Guo Texlink Import Companies Inc. 207 Mineola Avenue, Suite 555 Roslyn Heights, NY 11577 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of chenille fabric from Canada; Article 509 Dear Mr. Guo: In your letter dated May 25, 2010, you requested a ruling on the status of chenille upholstery fabric from Canada under the NAFTA. The sample of woven fabric which accompanied your request is a woven chenille fabric with a stated composition of 92% rayon and 8% polyester. Constructed with yarns of different colors, this fabric is characterized by a highly textured fibrous surface created by the insertion of the chenille yarns during the weaving process, adding bulk and texture to the fabric. The reverse side of the fabric is characterized by long smooth floats formed by the non-chenille yarns. Your correspondence indicates that this item will be marketed as an upholstery fabric. The applicable tariff provision for this chenille upholstery fabric will be 5801.36.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for woven pile fabrics and chenille fabrics, other than fabrics of heading 5802 or 5806: of man-made fibers: chenille fabrics: with chenille yarns on one side only. The general rate of duty will be 9.8 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; The tariff change rule for chenille fabrics of chapter 58 states “A change to headings 5801 through 5811 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, or chapters 54 through 55.” The chenille fabric is woven in Canada from the following materials: Warp (8%): textured polyester yarn produced from pre-oriented yarn extruded in Canada, classified in heading 5402. Weft (21%): rayon yarn spun in Canada of rayon fiber from Thailand, classified in heading 5510. Weft (71%): chenille yarn, made in Taiwan of materials from Thailand, classified in heading 5606. Based on the facts provided, the fabric described above does not qualify for preferential treatment under the NAFTA because the rayon yarn does not undergo the change in tariff classification required by General Note 12(t)/58, HTSUSA. 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 Maribeth Dunajski at (646) 733-3045. 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, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division