The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA), of a knee brace from Mexico, Article 509

N275726 June 20, 2016 CLA-2-63:OT:RR:NC:N3:351 CATEGORY: Classification TARIFF NO.: 6307.90.9889 Mr. Matthew W. Caligur Baker & Hostetler LLP 811 Main Street Suite 1100 Houston, TX 77002-6111 RE: The tariff classification, country of origin and status under the North American Free Trade Agreement (NAFTA), of a knee brace from Mexico, Article 509 Dear Mr. Caligur: In your letter dated May 10, 2016, you requested a ruling on behalf of your client, DJO, LLP on the status of a knee brace from Mexico under the NAFTA. Samples of the knee brace and fabric were examined and will be retained. FACTS: The representative sample you submitted, the Reddie Brace hinged knee support is a knee brace that is composed of a hinged knee support made of neoprene fabric covered by knit nylon fabric on both sides. The brace consists of two panels that are closed by large hook and loop panels. The back panel has a 3 ½" hole at the back of the knee and the front panel has a 2 ¼" hole at the knee area. Hinged metal supports run parallel to the leg and are sewn into the knee support on each side. On either side of the interior knee area is a sewn in circular panel adding extra protection near the metal hinge. Hook and loop adjustment straps measuring 2" wide are sewn above and below the knee. The straps allow for proper positioning of the hinges and provide medial/lateral support to the knee. The brace will be produced in seven sizes ranging from extra-small to extra-extra-extra-large with varying dimensions, but all will be manufactured using the same process and have the same construction as the submitted sample. The Reddie Brace is produced from the following raw materials: Aluminum coils from China and Indonesia Nylon binding tape and tape and elastic loom tape from the United States Woven nylon from the United States Neoprene fabric from Taiwan Breath-o-prene fabric from Argentina CLASSIFICATION: The brace under consideration is a composite good that consists of several components. The components are classified in several different headings. Classification of merchandise under the Harmonized Tariff Schedule of the United States (HTSUS) is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedules covers all the components of the subject brace in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. Therefore, in accordance with GRI 3(b), it is the opinion of this office that the textile component, the neoprene fabric imparts the essential character of the brace and thus determines the classification. The applicable tariff provision for the Reddie Brace will be 6307.90.9889, HTSUS which provides for other made up textile articles, other. The rate of duty will be 7% 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 https://hts.usitc.gov/current. You state that the manufacturing operations for the Reddie Brace are as follows: Production of the Reddie Brace takes place at DJO’s facility in Tijuana, Mexico. The process begins when an order is placed at the machine shop. The aluminum coil (China and Indonesia) is loaded onto the feeding machine and the stamping press; the coils produce the offsets and side plates incorporated into the hinges. Coils of nylon (U.S.) are also placed onto the feeding machine to be stamped into washers. These items (side plates, offsets, washers and rivets) create the hinge assembly. Nylon binding tape and nylon hook and loop (U.S.), neoprene fabric (Taiwan) and breath-o-prene fabric. These items are sewn together in Mexico and the previously assembled hinges are inserted. The brace is fully assembled and packaged in a plastic bag to be shipped directly to the United States from Mexico. NAFTA - LAW AND ANALYSIS: 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 nonoriginating 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. For goods classified in heading 6307, General Note 12/63.4 requires: 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 6006, 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 63: Chapter rule 1: 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 that good. The component that determines the classification of the good is the neoprene fabric classified under heading 5906, HTSUS. The fabric is said to be formed in Taiwan, imported in sheets into Mexico where it is being cut and assembled in to the product, Reddie Brace classified under heading 6307, HTSUS. Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(t)63.4. The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. COUNTRY OF ORIGIN - LAW AND ANALYSIS: 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, “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, “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, 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: 6307.90      The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process. Since the fabric used in making the Reddie Brace was formed in Taiwan, the brace does not meet the terms of the tariff shift requirement of 19 C.F.R. 102.21. However, the NAFTA Preference Override set forth in 19 CFR 102.19 is applicable to the subject merchandise. Specifically, 19 CFR 102.19(a) states:     “…if a good which is originating within the meaning of 181.1(q) of this chapter [the tariff shift under General Note 12, HTSUS] is not determined under …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…has been completed and signed for the good.” The Reddie Brace was cut to shape and assembled in Mexico and qualifies for NAFTA treatment according to General Note 12/63.4, HTSUS. Therefore, with a completed and signed Certificate of Origin, the good may be marked as a product of Mexico. 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 Adleasia Lonesome at Adleasia.a.lonesome@cbp.dhs.gov. 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, 90 K Street, N.E. – 10th floor, Washington, DC 20229-1177. Sincerely, Steven A. Mack Director National Commodity Specialist Division