The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Bonded Fabrics from Canada and Car Seat Covers from Mexico; Article 509

NY M85523 August 10, 2006 CLA-2-94:RR:NC:SP:233 M85523 CATEGORY: Classification TARIFF NO.: 5603.14.3000; 5603.94.3000; 9401.90.1020 Mr. John M. Peterson Neville Peterson LLP 17 State Street – 19th Floor New York, NY 10004 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Bonded Fabrics from Canada and Car Seat Covers from Mexico; Article 509 Dear Mr. Peterson: In your letter dated June 23, 2006, on behalf of Kuraray America Inc., Clarino Division, you requested a ruling on the status of Bonded Fabrics and Car Seat Covers from Mexico under the NAFTA. Kuraray plans to import a Japanese-origin artificial leather material through Canada, where it will be laminated to a layer of foam plastic material. Kuraray seeks a ruling concerning the tariff classification and NAFTA status of the laminated material should it be imported from Canada into the United States. Although Kuraray intends to manufacture car seat covers in Mexico, the company cannot altogether discount the possibility that, at some future time, it may engage a second cutting and assembly contractor in the United States to make car seat covers. In addition, Kuraray expects that in most cases, the laminated textile/foam plastic material created in Canada will be exported in rolls to Mexico. Kuraray also seeks a ruling concerning the tariff classification and NAFTA “originating” status of such car seat covers. You have submitted a sample of the Japanese artificial leather material, as imported into the NAFTA country (Exhibit A), the laminated textile/foam plastic backing material (Exhibit B), as well as the finished car seat cover to be imported into the United States (Exhibit C). The applicable tariff provision for the bonded fabric, should it be imported from Canada into the United States, if nonwoven and of filaments, will be 5603.14.3000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Of man-made filaments: Weighing more than 150g/ m²: laminated fabrics.” The general rate of duty will be Free. The applicable tariff provision for the bonded fabric, should it be imported from Canada into the United States, if nonwoven and of staple fiber, will be 5603.94.3000, HTSUS, which provides for “Nonwovens, whether or not impregnated, coated, covered or laminated: Of other than filaments: Weighing more than 150g/ m²: Other: laminated fabrics.” The general rate of duty will be Free. The applicable tariff provision for the car seat covers will be 9401.90.1020, HTSUS, which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Parts: Of seats of a kind used for motor vehicles, Of textile material, cut to shape.” The general rate of duty will be Free. 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 http://www.usitc.gov/tata/hts/. 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. Based on the facts provided, the bonded fabric, should it be imported from Canada into the United States, does not qualify for preferential treatment under the NAFTA because none of the above requirements are met. The car seat covers, qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. 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 Lawrence Mushinske at 646-733-3036. 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, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division