Menstrual pads from Canada; country of origin; duty treatment under CFTA

HQ 951761 July 30, 1992 CLA CO:R:C:T 951761 jb CATEGORY: Classification TARIFF: 6307.90.9986 Liann Hartley Many Moons #14 - 130 Dallas Road Victoria, B.C. Canada, V8V 1A3 RE: Menstrual pads from Canada; country of origin; duty treatment under CFTA Dear Ms. Hartley: This letter is in response to your inquiry of February 10, 1992, requesting a classification and country of origin ruling for menstrual pads. Samples were provided to this office. FACTS: The submitted samples are two menstrual pads. The first is composed of cotton woven fabric consisting of a pouch and cloth. The pouch is rectangular in shape and measures approximately 7.5 inches by 2.5 inches. The ends are folded over and sewn to form a loop. The cloth measures approximately 25 inches by nine inches, it is folded and inserted into the pouch. The second sample also consists of a cotton woven fabric consisting of a pouch and cloth but in addition there is a man- made fiber woven back. The article measures approximately 7.5 inches by 2.5 inches. The sides of the pouch have curved extensions with strips similar to the VELCRO brand loop fasteners for closure. The cotton woven cloth measures approximately 25 inches by 6.5 inches, and is inserted into the pouch. The cotton used for both samples originates from India and China and arrives in Canada in bales of woven and printed fabric. Upon arrival into Canada, it is cut and sewn into menstrual pads. ISSUE: I. What is the country of origin of the menstrual pads? II. Whether the merchandise in question is eligible for preferential treatment under the United States-Canada Free Trade Agreement (CFTA)? III. What is the classification of the menstrual pads? LAW AND ANALYSIS: I. Classification Classification of goods under the Harmonized Tariff Schedule of the United States Annotated HTSUSA) is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied in the order of their appearance. Customs has ruled on similar merchandise in the past. (See, e.g., NY 858081, dated December 3, 1990; NY 860337, dated March 6, 1991; NY 869441, dated January 2, 1992). Those rulings determined that such articles were classified under heading 6307, HTSUSA, which provides for other made up textile articles. This is a "basket" provision intended to classify merchandise not provided for more specifically in other headings of the Nomenclature. The submitted merchandise is classified under subheading 6307.90.9986, HTSUSA, which provides for other made up articles, including dress patterns. II. Country of Origin Section 12.130 of the Customs Regulations (19 CFR 12.130), sets forth the principles of country of origin for textiles and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854). Pursuant to 19 CFR 12.130 (b), the standard of substantial transformation governs the country of origin determination 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) describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130 (e)(1)(iv) provides that an article or material usually will be a product of a particular foreign territory or country when there has been: Cutting of fabric into parts and the assembly of those parts into the completed article In this instance, Canada is the country of origin of the subject merchandise. The woven fabric undergoes a substantial change in Canada as a result of the fact that it is cut and sewn there. Specificallly, the woven fabric is folded over several times to create the pocket into which the cloth is inserted, after which it is sewn and hemmed. Thus, what results are new and different articles of commerce, i.e., menstrual pads. III. The United States-Canada Free Trade Agreement (CFTA) General Note 3(c)(vii), HTSUSA, sets forth the rules which determine whether products imported into the United States from Canada are entitled to special duty treatment under CFTA. Eligible goods must be "goods originating in Canada" as provided 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 Stats 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 n the rules of subdivision (c)(vii)(R) of this note General Note 3(c)(vii)(R)(11)(pp), HTSUSA, which determines the required 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 cotton fabric which was imported into Canada from India and China would be classifiable in heading 5208, HTSUSA, which provides for woven fabrics of cotton. Upon exportation to the United States from Canada (subsequent to cutting and sewing), the menstrual pads are classifiable under heading 6307, HTSUSA, which provides for other made up articles. 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). As no other provisions of the CFTA are applicable to this merchandise, the menstruation pads are not considered goods originating in Canada for CFTA purposes. HOLDING: The country of origin for the merchandise at issue is Canada. However, the processing in Canada is insufficient to qualify the merchandise for preferential treatment under the United-States Canada Free Trade Agreement. The menstruation pads are classifiable under subheading 6307.90.9986, HTSUSA, which provides for other made up articles, including dress patterns. The duty rate is 7 percent ad valorem. 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 preciously 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 177.2, Customs Regulations (19 CFR 177.2). Sincerely, John Durant, Director Commercial Rulings Division