HQ 083295: Country of Origin

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 083295

 	April 13 1989
 
 CLA2 CO:R:C:G  DFC

  CATEGORY: Classification

  TARIFF NO.: 6505.90.7060; 6204.42.30; 6204.43.40

  Mr. Edward Davis
  President MilleFeuilles
  2220 Rue Parthenais
  Montreal, Quebec H2K 3T4

  RE: Country of Origin

  Dear Mr. Davis:

       	In a letter dated December 21, 1988, you asked for a   country of origin ruling on certain hat bodies manufactured in   Taiwan which will be further processed in Canada. You have also
  requested, in a telephone conversation with a member of my   staff, a ruling as to the dutiable status of these hats which   after processing in Canada will be combined with dresses and
  sold as sets to customers in the United States.

  FACTS:

       	A sample of the unfinished hat produced in Taiwan and a  sample of the hat after the processing operations were  completed in Canada were submitted for examination. Both hats
  are manufactured of circular sewed braid which is manufactured  of yarns and visca under 5mm in width.

      	It is our understanding that the dresses which will be  exported to the United States with the hats will be made wholly   of cotton or manmade fibers.

  ISSUE:

       	Can the hats subjected to further processing in Canada be   eligible for treatment as "goods originating in the territory   of Canada" for the purposes of the U.S Canada FTA?

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  	Can the hats and dresses which will be exported and  marketed in combinations be considered as sets for tariff  purposes?

  LAW AND ANALYSIS:

       	Under the U.S.Canada FTA the hats will be considered to   be of Canadian origin if the processing performed in Canada  results in a change in classification to headings 6503 through
 6507, Harmonized Tariff Schedule of the United States Annotated  (HTSUSA), from any other heading outside that group.

       	The Explanatory Note to heading 6503 relating to felt hats  and other felt headgear reads in pertinent part as follows:

            The hats and headgear of this heading are normally
 	blocked to shape, i.e., the crowns are formed
       	to shape (usually oval) and size by manipulation on a
       	wooden block.  At this or any subsequent stage in manu
       	facture the articles are regarded as hats or headgear
       	and fall into this heading. During the process of block
       	ing the crowns, the brims are also usually formed to
       	the extent that they can be identified as distinct
       	parts of the hats, e.g., they project at approximately
       	right angles to the crowns.

       	An examination of the samples indicates that the processed  hat was blocked at least twice and trimmed with a bow and chin  strap. The unfinished hat appears to have been blocked and  sized in Taiwan.

       	It is our view that a substantial transformation has not  been effected here.  It appears from an examination of the  unfinished hat coming from Taiwan that its crown was formed to
shape and size by manipulation on a wooden block.  Thus,  following the principle set out in the Explanatory Note to  heading 6503, supra, the article must be considered a hat or
headgear.  Inasmuch as the hats coming into Canada were  considered hats or headgear, there was no change to headings   65036507 from any heading outside that group by virtue of the
processing in Canada.

      	In applying the HTSUSA, the Customs Service must follow the  terms of the statute. Classification of goods under the HTSUSA  is governed by the General Rules of Interpretation (GRI's.)   GRI 1 provides that "classification shall be determined  according to the terms of the headings and any relative section or chapter notes, and, provided such headings or notes do not
otherwise require, according to /the remaining GRI's taken in order/." In other words classification is governed first by the terms of the headings of the tariff and any relative section o
 
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or chapter notes GRI 3, HTSUSA, provides special rules to be applied in the  classification of, inter alia, merchandise which meets the   criteria for a set for tariff purposes. It provides as follows:

            3.  When, by application of rule 2(b) or for
                any other reason, goods are, prima facie,
                classifiable under two or more headings,
                classification shall be effected as follows:

                   (a) the heading which provides the most
                       specific description shall be preferred
                       to headings providing a more general
                       description. However, when two or
                       more headings each refer to * * *
                       part only of the items in a set put
                       up for retail sale, those headings
                       are to be regarded as equally specific
                       in relation to those goods, even if one
                       gives a more complete or precise
                       description of the goods.

                   (b) Mixtures, composite goods consisting
                       of different materials or madeup of
                       different components, and goods put
                       up in sets for retail sale, which
                       cannot be classified by reference to
                       3(a), shall be classified as if they
                       consisted of the material or component
                       which gives them their essential
                       character, insofar as this criterion
                       is applicable.

       The Explanatory Note to GRI 3(b), HTSUSA, provides in
  pertinent part as follows:

       (X) For the purposes of the Rule, the term "goods put
           up in sets for retail sale" shall be taken to mean
           goods which:

          (a) consist of at least two different articles which
              are, prima facie, classifiable in different
              headings.  Therefore, for example, six fondue
              forks cannot be regarded as a set within the
              meaning of this Rule;

          (b) consist of products or articles put up together
              to meet a particular need or carry out a specific
              activity; and
                                4 

          (c) are put up in a manner suitable for sale
              directly to users without repacking (e.g.,
              in boxes or cases or on boards).

It is our understanding that these combinations will be  shipped to retailers in the United States in quantities as  requested.  There is no indication that each individual  combination consisting of a hat and dress will be packaged for  retail sale at the time of exportation.  Consequently, the combinations cannot be considered sets for tariff purposes.

  HOLDING:

       	The hats are classifiable under subheading 6505.90.7060,  HTSUSA, as hats and other headgear, knitted or crocheted, or  made up from lace, felt or other textile fabric, other, wholly
or in part of braid, other with duty at the rate of 7.2 percent  ad valorem.  The applicable textile category is 659.

       	The cotton dresses are separately classifiable under  subheading 6204.42.30, HTSUSA, as women's or girls' dresses, of  cotton, other with duty at the rate of 12.6 percent ad valorem.
The applicable textile category is 336.

       	The dresses of manmade fibers are separately classifiable  under subheading 6204.43.40, HTSUSA, as women's or girls'  dresses of synthetic fibers, other, other with duty at the rate
  of 17 percent ad valorem.  The applicable textile category is 636.

       	Due to the changeable nature of the statistical annotation  (the ninth and tenth digits of the classification) and the  restraint (quota/visa) categories, you should contact your
local Customs office prior to importation of this merchandise  to determine the current status of any import restraints or  requirements.

                             				Sincerely,
                             
John Durant, Director,
                             				Commercial Rulings Division