HQ 556347: Eligibility for tariff treatment under the U.S.-Canada Free- Trade Agreement of down filled comforters from Canada; HRL 950005

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 556347
                       April 13, 1992

CLA-2 CO:R:C:S 556347 SER

CATEGORY: Classification

TARIFF NO.:  9404.90.9010

Mr. Ron Stefaniuk
Robinson & Heath Limited
2800 Skymark Avenue
Suite 200
Mississauga, Ontario Canada L4W 5A6

RE:  Eligibility for tariff treatment under the U.S.-Canada Free-
     Trade Agreement of down filled comforters from Canada; HRL
     950005

Dear Mr. Stefaniuk:

     This is in response to your letter of October 17, 1991, on
behalf of Highland Down Products Manufacturing Inc., concerning
the eligibility of down-filled comforters from Canada for special
tariff treatment under the U.S.-Canada Free-Trade Agreement
(FTA).

FACTS:

     Comforter covers, comprised of 100% cotton, and PVC bags are
imported into Canada from China.  The comforter covers, which are
open at one end, are then filled with Canadian-origin goose down,
sewn closed, and a textile label is affixed.  The comforters are
then packed in PVC bags which are placed in cartons for export to
the U.S.

ISSUE:

     Whether the comforters are considered "originating goods"
for purposes of the FTA.

LAW AND ANALYSIS:

     To be eligible for tariff preferences under the FTA,
imported merchandise must qualify as "goods originating in the
territory of Canada," pursuant to the rules of origin in General
Note 3(c)(vii)(B), Harmonized Tariff Schedule of the United
States Annotated (HTSUSA).  Since, in this case, the comforters
are made with some third country material, they are not
considered goods "wholly obtained or produced in the territory of
Canada and/or the United States" as provided for in General Note
                               -2-

3(c)(vii)(B)(1), HTSUSA.  Therefore, they must be "transformed in
the territory of Canada and/or the United States" as provided in
General Note 3(c)(vii)(B)(2), HTSUSA.

     A transformation is evident when a change in tariff
classification occurs as prescribed by General Note
3(c)(vii)(R), HTSUSA.  General Note 3(c)(vii)(R)(20)(aa), HTSUSA,
provides that a transformation into "originating goods" occurs if
the operations performed in Canada result in a change in tariff
classification of the imported components from one chapter in the
Harmonized Tariff Schedule to Chapter 94 through Chapter 96 of
the Harmonized Tariff Schedule.  In the instant case the 100%
cotton comforter covers are classified in heading 6302, HTSUSA,
upon entry into Canada.  The completed comforters are classified
in subheading 9404.90.9010, HTSUSA, upon entry into the U.S.
Therefore, the change in classification requirements would be met
for the foreign merchandise imported into Canada.

     However, General Note 3(c)(vii)(C)(1), HTSUSA provides, that
even if articles are considered to be "goods originating in the
territory of Canada" pursuant to General Note 3(c)(vii)(B),
HTSUSA, they will not be eligible for preferential tariff
treatment under the FTA "merely by virtue of having undergone
simple packaging or...combining operations."

     In Headquarters Ruling Letter (HRL) 950005 dated January 9,
1992, as modified in HRL 951024, dated March 5, 1992, Customs
examined whether the assembly of a sledge hammer head from Japan
with a sledge hammer handle which was fabricated in Canada,
constituted a simple assembly, thereby precluding preferential
duty treatment under the FTA.  Customs determined that the
fabrication of the sledge hammer handle in Canada, coupled with
the assembly of the handle with the head precluded the Canadian
operations from being considered a simple combining operation
pursuant to General Note 3(c)(vii)(C)(1), HTSUSA.  The
fabrication operations in Canada was the determining factor in
this decision.  Consistent with this ruling, since the comforters
will utilize Canadian-origin goose down, the operations in Canada
of filling the comforters with the Canadian goose down, sewing
the open end of the comforters shut, affixing a label, and
packaging would not constitute a simple packaging or combining
operation.

     In addition, pursuant to General Rule of Interpretation 5,
HTSUSA, the PVC bags are classifiable with the comforters in
subheading 9404.90.9010, HTSUSA.

HOLDING:

     The Chinese-origin comforter covers imported into Canada
undergo the requisite change in tariff classification in the
creation of the comforters, thereby transforming the goods into

                               -3-


"originating goods" for FTA purposes.  In addition, the
operations involved in producing the comforters, which utilize
Canadian-origin goose down, do not constitute simple packaging or
combining operations.  Upon importation into the U.S., the
comforters are properly classified in subheading 9404.90.9010,
HTSUSA, with a rate of duty of 8.7% ad valorem for items
eligible under the FTA.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division