Classification and NAFTA eligibility of Pakistani fabric processed in Canada; country of origin; visa/quota; Article 509
Active· CBP ruling HQ 956420· Issued 1995-07-07
Ruling text
HQ 956420
July 7, 1995
CLA-2 R:C:T 956420 CMR
CATEGORY: Classification
TARIFF NO.: 5903.90.1000
Ms. J. Wilson
S. Fattal Canvas Inc.
200 Edgehill road
Montreal, Canada H3Y 1E9
RE: Classification and NAFTA eligibility of Pakistani fabric
processed in Canada; country of origin; visa/quota; Article
509
Dear Ms. Wilson:
This is in response to your request of May 2, 1994,
regarding the classification and eligibility for NAFTA
preferential duty treatment of certain Pakistani fabric processed
in Canada. Two samples were received with your request. They
were reviewed by Customs in New York. This office did not
receive the samples and so, descriptions of the samples are based
upon the information contained in the report from our New York
office.
Additional information was requested by our New York office
regarding the nature of the adhesive and processing steps
performed in Canada. It is our understanding the requested
information was never supplied. Therefore, this ruling is based
upon the information available in the file. We regret the delay
in responding to your request.
FACTS:
Two samples were submitted. One sample was of the subject
fabric in its condition as imported into Canada. The fabric was
a 100 percent cotton grey cotton Osnaburg fabric, construction 42
x 26 12/8 59", weighing 5.5 ounces per square yard. The fabric
is made in Pakistan.
In Canada, the grey fabric is "dipped" into a solution of a
water activated adhesive. The adhesive is obtained from a U.S.
company. Customs is assuming that since the adhesive is a water
activated type that it is plastics in nature and not of a rubber
base. The adhesive does not fully and visibly cover or encase -2-
the fabric on both sides. There are noticeable areas of textile
showing through, particularly on one side. The end use of this
product is to wrap up insulation that goes on pipe lines and duct
systems.
The dipping process involves immersing the fabric up to
three times in the solution in a textile immersion tank, then
passing it through a tenter frame drying machine. The fabric is
sometimes slit, and sometimes the selvedge is cut off. The
finished fabric is then repackaged.
ISSUE:
What is the classification of the "dipped" fabric?
Does the fabric qualify for preferential duty treatment
under the North American Free Trade Agreement (NAFTA)?
What is the country of origin of the fabric and is the
fabric subject to quota/visa restraints?
Does cutting the selvedge or slitting the fabric into
narrower widths affect the classification or origin of the
fabric?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRIs). 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 GRIs taken in order]."
Heading 5903, Harmonized Tariff Schedule of the United
States (HTSUS), provides for "Textile fabrics impregnated,
coated, covered or laminated with plastics, other than those of
heading 5902 [tire cord fabric]." Note 2, Chapter 59, states, in
relevant part:
Heading 5903 applies to:
(a) Textile fabrics, impregnated, coated, covered or
laminated with plastics, whatever the weight per square
meter and whatever the nature of the plastic material
(compact or cellular), other than:
(1) Fabrics in which the impregnation, coating or
covering cannot be seen with the naked eye (usually -3-
chapters 50 to 55, 58 or 60); for the purpose of this
provision, no account should be taken of any resulting
change of color;
* * *
(4) Fabrics partially coated or partially covered with
plastics and bearing designs resulting from these
treatments (usually chapters 50 to 55, 58 or 60);
* * *
Based upon the report from the National Import Specialist
who examined the submitted samples, it is apparent that the
plastic coating is visible to the naked eye. In addition, while
the coating is a partial coating, it does not create a design on
the fabric and thus is not excluded from heading 5903.
Therefore, the coated, or "dipped", fabric is classified in
heading 5903, HTSUS.
Chapter 4 of the NAFTA sets forth rules for determining
whether an imported good qualifies as an originating good of a
NAFTA country. A good that qualifies as an originating good is
eligible for preferential tariff treatment as provided for under
Article 302(2) and Annex 302.2 of the NAFTA. The basic rules of
origin in Chapter 4 of the NAFTA, as well as the specific rules
of origin found in Annex 401 of the NAFTA, are set forth in
General Note 12, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA). (See 58 Fed. Reg. 69, 460, December 30,
1993).
Subdivision (b) of General Note 12, HTSUSA, provides, in
pertinent part:
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
-4-
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.
In this case, Pakistani fabric is "dipped" into a U.S.
plastics solution in Canada. The finished good is classified in
heading 5903, HTSUS. As the coated fabric does not meet Note
12(b)(i) or (iii) above, in order to qualify for preferential
duty treatment under the NAFTA, it must meet Note 12(b)(ii).
Note 12(t)/59.3 sets out the tariff shift rule applicable to
goods classified in heading 5903. The rule states:
A change to headings 5903 through 5908 from any other
chapter, except from headings 5111 through 5113, 5208
through 5212, 5310 through 5311, 5407 through 5408 or 5512
through 5516.
The grey cotton Osnaburg fabric, prior to dipping, is
classified in heading 5208, HTSUS. The tariff shift which occurs
in Canada is from heading 5208 to heading 5903. As the rule
precludes a change from heading 5208 as a qualifying tariff
change, the operations which occur in Canada do not render the
coated fabric eligible for the NAFTA preferential duty treatment.
Section 12.130 of the Customs Regulations, 19 CFR 12.130,
sets forth the principles for determining the country of origin
of textiles and textile products subject to section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854). However,
in 19 CFR 12.130(b), the regulation states that the origin of
products of Canada and Mexico are (sic) determined pursuant to
the procedures set forth in part 102 of this chapter. As the
Pakistani fabric is processed in Canada, Customs must look to 19
CFR 102 to determine the origin of the coated fabric.
Section 102.11 provides, in pertinent part:
(a) The country of origin of a good is the country in which:
* * *
-5-
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classification
set out in [section] 102.20 and satisfies any other
applicable requirements of that section, and all other
applicable requirements of these rules are satisfies.
* * *
Section 102.20 provides the following rule, in part, for
goods classified in heading 5903, HTSUS:
A change to heading 5903 from any other heading except
heading 5007, 5111 through 5113, 5208 through 5212, 5309
through 5311, 5407 through 5408, 5512 through 5516, 5803,
5806.31 through 5806.39, 5808, and 6002; or,
(1) For woven fabric, a change to heading 5903 from any
other heading, provided that the impregnation, coating,
covering, or lamination accounts for at least 15 percent of
the total weight of the fabric.
* * *
The submitted coated and not coated fabric samples were
weighed to determine what percentage of the total weight of the
fabric is attributable to the coating. The coated sample weighed
14.1 ounces per square yard. The fabric in its condition prior
to dipping weighed 6.4 ounces per square yard. This amounts to a
117.8 percent gain. Thus, the coating in this case accounts for
at least 15 percent of the total weight of the fabric. The
coated fabric meets the tariff shift requirement for heading 5903
set out in section 102.20. Therefore, the coated fabric is
considered a product of Canada for marking purposes.
As stated above, the coated fabric is classified in heading
5903. As the fabric is of cotton, it is classified in subheading
5903.90.1000, HTSUSA, provided it is coated with a plastics other
than polyvinyl chloride or polyurethane (which we assume is the
case). Goods classified in this subheading of the tariff are not
subject to visa/quota restraints and so we need not determine
origin for those purposes.
As to whether cutting the selvedge off the fabric or
slitting the fabric into narrower widths will affect its
classification, the answer is no. Narrow woven fabrics, i.e., of
a width not exceeding 30 centimeters, are classified in Chapter
58, HTSUS. However, Note 1, Chapter 58, excludes, among other
things, coated fabrics classifiable in Chapter 59. As the coated
subject fabric is excluded from classification as a narrow woven
fabric of Chapter 58, cutting it into narrower widths does not
affect its classification. -6-
HOLDING:
If coated with a plastics other than polyvinyl chloride or
polyurethane (which we assume is the case), the coated cotton
fabric is classified in subheading 5903.90.1000, HTSUSA, dutiable
at 5 percent ad valorem. No textile category is designated for
this subheading.
The coated cotton fabric does not qualify for preferential
duty treatment under NAFTA. However, the fabric does qualify to
be marked as a product of Canada.
Sincerely,
John Durant, Director
Commercial Rulings Division
Source: rulings.cbp.gov — ruling 956420, retrieved 2026-10-12T05:29:29Z, republished verbatim. This digest is informational; only CBP issues binding rulings.