HQ 950850: Country of origin of bed linens; CFTA

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 950850
                         April 16, 1992



CLA  CO:R:C:T  950850  CAB

CATEGORY:   Classification

Ann M. Williams
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919-9703

RE:  Country of origin of bed linens; CFTA

Dear Ms. Williams:

     This letter is in response to your inquiry of December 5,
1991, requesting a country of origin ruling on behalf of Lawrence
Bedspread, for bed linens.

FACTS:

     Woven fabric that is internally stuffed with 100% polyester,
and has an outer shell of 50% cotton and 50% polyester is
imported from various oriental countries to Canada for
manufacturing.  In Canada, the manufacturing steps include
inspection, shading, cutting, assembling the shell, filling the
shell, sewing, and quilting.  When these processes are completed,
the woven fabric is, packaged and shipped to the United States as
pillow shams, comforters, and dust ruffles.

ISSUE:

I.   What is the country of origin of these pillows shams,
comforters, and dust ruffles?

II.  Whether the merchandise in question is eligible for
preferential treatment under the United States - Canada Free
Trade Agreement (CFTA)?

LAW AND ANALYSIS:

     I.  Country of Origin

     Section 12.130, Customs Regulations (19 CFR 12.130), sets
forth the principles for making country of origin determinations
for textile and textile products subject to section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854) (section
204).
     Pursuant to 19 CFR 12.130, the standard of substantial
transformation governs the determination of the country of origin
where textiles and textile products are processed in more than
one country.  The country of origin of textile products is
deemed to be that foreign territory or country where the article
last underwent a substantial transformation.  Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by
means of substantial manufacturing or processing.

     The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(d).  Section 12.130(e)(1)(i)(iv) states that a textile
article will usually be a product of a particular country if the
cutting of the fabric into parts and the assembly of those parts
into the completed article has occurred in that country.

     In this instance, Canada is the country of origin for the
subject merchandise.  The woven fabric undergoes a substantial
change in Canada.  This transformation includes the fact that the
woven fabric is cut, assembled, quilted, and sewn in Canada.
Further,the fabric is made into new and different articles of
commerce, i.e., comforters, pillows shams, and dust ruffles in
Canada.

     II.  The United States - Canada Free Trade Agreement

     General Note 3(c)(vii), HTSUSA, provides the rules which
determine what products imported into the United States from
Canada are entitled to special duty treatment under the CFTA.
Eligible goods must be "goods originating in Canada", as stated
in General Note 3(c)(vii)(A), HTSUSA.

     Pursuant to General Note 3(c)(vii)(B), HTSUSA, goods
imported into the Customs territory of the United States are
eligible for treatment as "goods originating in the territory of
Canada" only if -

     (1) they are goods wholly obtained or produced in the
territory of Canada and/or the United States, or

     (2)  they have been transformed in the territory of Canada
and/or the United States, so as to be subject -

     (I)  to a change in tariff classification as described in
the rules of subdivision (c)(vii)(R) of this note, or

     (II)  to such other requirements subdivision (c)(vii)(R) of
this note may provide when no change in tariff classification
occurs, and they meet the other conditions set out in
subdivisions (c)(vii)(F)(G)(H)(I),(J), and (R) of this note.

     General Note 3(c)(vii)(R)(11)(pp), HTSUSA, which determines
what constitutes a change in tariff classification for goods
classifiable in Chapter 63 states:

          A change to any heading of Chapter 63 from any heading
          outside that chapter other than Headings 5106 through
          5113, 5204 through 5212, 5306 through 5311, or headings
          of Chapters 54 and 55; provided, that goods are both
          cut and sewn in the territory of Canada and/or the
          United States.

     In this instance, the woven fabric which was imported into
Canada was classifiable in Chapter 55.  Upon exportation to the
U.S. from Canada, the pillows shams and dust ruffles are
classifiable in Chapter 63 as "bed linen."  Thus, this
merchandise cannot be considered goods originating in Canada by
having undergone a change in tariff classification, pursuant to
General Note 3(c)(vii)(R)(11)(pp).

     Another finished product that is exported to the U.S. and
produced from the woven fabric is a comforter that is
classifiable in Chapter 94.  General Note 3(c)(vii)(R)(20)(aa),
HTSUSA, which determines what constitutes a change in tariff
classification for goods classifiable in Chapters 94 through 96
provides:

          A change from one chapter to another, except a change
          to subheading 9409.90 from Headings 5007, 5111 through
          5113, 5208 through 5212, 5309 through 5311, 5407
          through 5408, and 5512 through 5516.

     In accordance with General Note 3(c)(vii)(R)(20)(aa),
HTSUSA, since the woven fabric was initially classifiable in
Chapter 55 and the finished product is classifiable in subheading
9409.90, the merchandise cannot be considered goods originating
in Canada based on a change in tariff classification.  As a
result of the foregoing, the merchandise in question, is not
eligible for preferential treatment under the CFTA.

     You mention the possibility of the merchandise in question
qualifying for preferential treatment under the CFTA in
accordance with General Note 3(c)(vii)(R)(11)(rr), HTSUSA.
However, this provision would not be applicable in this instance
because the merchandise in question was not woven in Canada from
yarn obtained in a third country.  Instead, the fabric was
imported to Canada already woven.

HOLDING:

     The country of origin for the merchandise at issue is
Canada.  However the processing in Canada is insufficient to make
the merchandise eligible for preferential tariff treatment under
the CFTA.

     The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request.  This position is clearly set forth in section
177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1).  This
section states that a ruling letter is issued on the assumption
that all of the information furnished in connection with the
ruling request and incorporated in the ruling letter, either
directly, by reference, or by implication is accurate and
complete in every material respect.  Should it subsequently be
determined that the information furnished is not complete and
does not comply with 19 CFR 177.9(b)(1), the ruling will be
subject to modification or revocation.  In the event there is a
change in the facts previously furnished this may affect the
determination of country of origin.  Accordingly, it is
recommended that a new ruling request be submitted in accordance
with section 177.Z, Customs Regulations (19 CFR 177.Z).

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division