The tariff classification of cut fabric pieces for chairs and sofas from Mexico, country of origin, and NAFTA eligibility.

N140542 January 20, 2011 CLA-2-94:OT:RR:NC:N4:433 CATEGORY: Classification TARIFF NO.: 9401.90.5021 Rachael Goding, Esq. International Automated Brokers, Inc. Customs Brokers and Freight Forwarders 1655 St. Andrews Cove San Diego, CA 92154-8213 RE: The tariff classification of cut fabric pieces for chairs and sofas from Mexico, country of origin, and NAFTA eligibility. Dear Ms. Goding: In your letter dated December 28, 2010, on behalf of Jonathan Louis International, Ltd. (JLI) of Gardenia, California, you requested a tariff classification ruling. JLI is a United States manufacturer and importer of various styles of upholstered chairs and sofas. JLI will cut to size and shape fabrics in Mexico to fit unfinished upholstered chair and sofa frames, as well as the cushions for these chairs and sofas. The fabrics will be imported in rolls from China into Mexico, where they will be cut into specific pieces using patterns and templates. These pieces will then be imported into the United States for incorporation into the manufacture of finished upholstered furniture pieces. You suggest that the cut to size and shape fabric pieces should be classified as parts for chairs and sofas as they are necessary to complete the upholstered furniture pieces. In your ruling request you reference Harmonized Tariff Schedule of the United States (HTSUS) subheading 9401.90.5020 – the provision for parts of seats of textile material, cut to shape. This 2010 HTSUS classification number has been replaced by 9401.90.5021 – the provision for parts of seats, “other of textile material, cut to shape.” The Explanatory Notes (ENs) to the HTSUS state, in pertinent part, that Chapter 94 covers “Parts” whether or not in the rough, of the goods of headings 9401 to 9403, when identifiable by their shape or other specific feature as parts designed solely or principally for an article of those headings. When imported together, these sets of cut to size and shape fabric pieces, including cushion covers, designed specifically for chairs and sofas, and integral to the finishing of the furniture pieces, fall to be classified in subheading 9401.90.5021. Separately presented cushions are not to be classified in heading 9401, and are therefore not classified in subheading 9401.90.5021 – see ENs to Chapter 94, Note 3 (B). Accordingly, cut to size and shape cushion covers, when imported separately, are not classified in heading 9401, HTSUS. The applicable subheading for the cut to size and shape fabric pieces, including cushion covers, when imported together, used to manufacture finished chairs and sofas, will be 9401.90.5021, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Parts: Other: Other; Other of textile material, cut to shape.” The rate of duty will be free. 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/. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. In Section 134.1 (b), the country of origin of an article is defined as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin for country of origin marking purposes. 19 CFR 134.1 (b) is not applicable for North American Free Trade Agreement (NAFTA) claims, as country of origin marking rules for NAFTA claims are determined in accordance with 19 CFR 102 – Rules of Origin. For purposes of determining country of origin, Section 102.11 sets forth the required hierarchy for determining country of origin. Section 102.11(a) of the regulations, in part, states that the country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other requirements of these rules are satisfied. Section 102.20 “specific rule by tariff classification” states: for 9401.90 – A change to subheading 9401.90 from any other heading, except from subheading 9403.90. As the rolls of fabric from China are classifiable in Section XI (textile and textile articles), which are outside of Chapter 94 with its headings of 9401 and 9403, we find that the cut to size and shape fabric pieces used in the manufacture of chairs and sofas, when imported together, undergo the applicable change in tariff classification as specified in 102.11 (a) (3), thereby qualifying the goods for country of origin Mexico. To be eligible for tariff preferences under the North American Free Trade Agreement (NAFTA), goods must be “originating goods” within the rules of origin in General Note 12(b), HTSUS. In this case, to be an "originating good" the cut to size and shape fabric pieces must be transformed in the territory of Mexico pursuant to General Note 12 (b) (ii) (A), HTSUS, which states: (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. In examining whether or not the cut to size and shape fabric pieces are transformed in the territory of Mexico, the NAFTA tariff shift rule of origin, as provided in General Note 12(t), Chapter 94, Note 2 to the HTSUS, is applicable. The rule states: A change to subheading 9401.90 from any other heading. As the rolls of material from China are classified outside of heading 9401, the cut to size and shape fabric pieces used in the manufacture of chairs and sofas, when imported together, are eligible for NAFTA preferential duty treatment. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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 Neil H. Levy at (646) 733-3036. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division