BAKER & M°KENZIE
Mr. Stephen Ecklund

April 30, 2001
Page 3
purposes of the Textile Fiber Products Identification Act (the “Act”) and, therefore, subject to the
Federal Trade Commission (“FTC”) labeling requirements. Pursuant to Section 303.33(a)(4)(i)
of the FTC Regulations, a textile fiber product partially manufactured in a foreign country and in
the United States is required to indicate on its label “[t]he manufacturing process in the foreign
country and in the USA.” 16 C.F.R. §303.33(a)(4)(i).

The FTC amended Section 303.33(a)(4)(i) on December 1, 2000. See 65 Fed. Reg.
75154, 75155 (copy enclosed). The FTC notice, however, does not provide specific guidance as
to how a product, such as RG Barry’s Stadium Seat Cushion, should be marked. In this regard,
we request written confirmation that the Stadium Scat Cushion may be marked “Textile Cover:
Made in USA With Some Foreign Processing.”

Thank you for your assistance with this matter. If you have any questions or require
additional information to issue your written confirmation, please do not hesitate to contact either
Terrie Gleason at (202) 452-7030 or Juhong Kim at (202) 835-1641.

Respectflly submitted,

ALT el
Trhtie A. Gleason
Juhong Kim
Attomeys for
R.G. Barry Corporation

Enclosures
ce: Ms. Marilynn Thomas
R.G. Barry Corporation


1

Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of
determining the country of origin of a textile or apparel product under paragraph (c)(2) of
this section":

HTS Tariff shift and/or other requirements

9404.90(EN) The country of origin of a good classifiable under subheading 9404.90
(EN)is the country, territory, or insular possession in which the fabric comprising the good
was formed by a fabric-making process.

As the fabric comprising the seat cushion is formed in a single country, following the terms
of the tariff shift requirement, the country of origin of the seat cushion is conferred in the
United States. However, there is an exception to products from the United States that are
sent abroad for processing. Section 12.130(c), Customs Regulations, provides that any
product of the United States which is returned after having been advanced in value or
improved in condition abroad, or assembled abroad, shall be a foreign article.

Section 12.130 which remains in effect was originally intended to be used to determine the
country of origin of textiles and textile products for quota/visa requirements. In T.D.
90-17, issued February 23, 1990, Customs announced a change in practice and position.
This change resulted in Customs using Section 12.130 for quota, duty, and marking
purposes when making country of origin determinations for textile goods. In accordance
with T.D. 90-17 and Section 12.130(c), the country of origin of the seat cushion made from
U.S. formed fabric is Mexico, for quota, marking, and duty purposes. However, this
position has recently been modified. On July 11, 2000, Customs published T.D. 00-44 in
the Federal Register (65 FR 42634 stating that effective October 10, 2000, Customs will no
longer apply 19 CFR 12.130(c)) for purposes of country of origin marking. Therefore, in
accordance with T.D. 00-44, Section 12.130(c) and Section 102.21(c)(2), the country of
origin of the instant seat cushion for purposes of marking will be the United States. For
duty purposes Section 12.130(c) remains in effect and the seat cushion is subject to the rate
of duty noted previously.

As the origin of the seat cushion for the purposes of marking has been determined to
be the United States, the cushion is not required to be marked as a foreign article for
purposes of 19 U.S.C. 1304 as previously required. However, separate Federal Trade
Commission marking requirements exist regarding country of origin, fiber content, and
other information that must appear on many textile items. For more information on the
applicability of the requirements under the Textile Fiber Products Identification Act
(TFPIA, you should contact the Federal Trade Commission, Textile Program, Division of
Enforcement, Bureau of Consumer Protection, 600 Pennsylvania Avenue, N.W.,
Washington, D.C., 20580.

HOLDING:


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-foam is shipped to Mexico.

Mexico:

-fabric cover is assembled.

-plastic foam is cut to size.

-fabric cover, plastic foam and energy pack are assembled into the seat cushion.
-cushion is packed and shipped to the U.S.

ISSUE:

What are the classification, eligibility under NAFTA and country of origin of the subject
merchandise?

CLASSIFICATION:

You have indicated that an earlier version of the stadium seat cushion was the subject of
Headquarters Ruling Letter (HQ) 954864 dated October 20, 1993. That cushion was classified as
an article of bedding and similar furnishing in subheading 9404.90.2000(EN), HTSUSA. Since
that ruling certain advances have been made with regard to the components of the energy pack.
While the composition of the energy pack may have changed, the conclusion reached in HQ
954864 remains applicable for the instant seat cushion.

The applicable subheading for the stadium seat cushion will be 9404.90.2000(EN), HTSUSA,
which provides for articles of bedding and similar furnishing (for example, mattresses, quilts,
eiderdowns, cushions, pouffes and pillows) fitted with springs or stuffed or internally fitted with
any material or of cellular rubber or plastics, whether or not covered: other: pillows, cushions and
similar furnishings: other. The general rate of duty will be 6 percent ad valorem.

Subheading 9404.90.2000(EN), HTSUSA, is not assigned a textile category designation and item
classified therein are not subject to quota or visa restrictions. Textile and apparel categories and
their quota and visa status are the result of international agreements that are subject to frequent
renegotiations and changes. To obtain the most current information, we suggest that you check,
close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal
issuance of the U.S. Customs Service, which is available at the Customs Web Site at
www.customs.gov. In addition, textile and apparel categories may be subdivided into parts. If
so, visa and quota requirements applicable to the subject merchandise may be affected and
should also be verified at the time of shipment.

NAFTA ELIGIBILITY:
The subject seat cushion undergoes processing operations in the United States and Mexico which

are countries provided for under the North American Free Trade Agreement (NAFTA). General
Note 12, HTSUSA, incorporates Article 401 of the North American Free Trade Agreement


NY G83156

November 6, 2000
CLA-2-RR:NC:TA:349 G83156

CATEGORY: Classification
Ms. Teresa A. Gleason

Mr. Michael E. Murphy

Baker & McKenzie

815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

RE: — Classification, status under the North American Free Trade Agreement (NAFTA) and
country of origin determination for a stadium scat cushion; 19 CFR 102.21(c)(2); tariff shift; 19
CFR 12.130(c); Article 509

Dear Ms. Gleason and Mr. Murphy:

This is in reply to your letter dated October 2, 2000, received by this office on Octoberl 1, 2000,
on behalf of R. G. Barry Corporation, requesting a classification, status under the NAFTA and
country of origin determination for a stadium seat cushion which will be imported into the
United States.

FACTS:

The subject merchandise is referred to as a Stadium Seat Cushion. A sample was not submitted.
The seat cushion is composed of plastic foam, a textile fabric cover and a water based energy
pack. The energy pack is designed to be heated in a microwave oven and inserted into the seat
cushion. Once heated, the energy pack will retain and radiate heat for a number of hours. The
manufacturing operations for the stadium seat cushion are as follows:

United States:

-fabric for the cover is formed.

-fabric is cut to size and shape.

-energy packs are made from U.S. origin materials.

-cut components and energy packs are shipped to Mexico.

United States or a Non-NAFTA Country:
-plastic foam is made.


1

classification. The stadium seat cushion is eligible for the NAFTA preference. The seat cushion
is entitled to the special "MX" duty rate of Free under the NAFTA upon compliance with all
applicable laws, regulations and agreements.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act.
Section 334 of that Act (codified at 19 U.S.C. 3592)) provides new rules of origin for textiles and
apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On
September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal
Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of
origin of a textile or apparel product shall be determined by sequential application of the general
rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

We note that as written, the listed headings and subheadings under 19 CFR 102.21(b)(5)
include subheading 9404.90.10(EN), HTSUSA. but fail to include subheading 9404.90.20(EN),
HTSUSA, for purposes of the section 102.21 rules of origin. The omission of that subheading
was addressed in Headquarters Ruling Letter (HQ) 962122 dated October 1, 1998 which stated
that: "...it is Customs position that the omission of subheading 9404.90.20(EN), TITSUS, was an
oversight. In that respect we direct your attention to the statute pertaining to the rules of origin,
19 U.S.C. section 3592, which states explicitly under (b)(2), Special rules, that:

(A) _ the origin of a good that is classified under one of the following HTS headings or
subheadings shall be determined under subparagraph (A),(B), or (C) of paragraph (1), as
appropriate: 5609, 5807. 5811. 6209.20.5040(EN), 6213, 6214, 6301, 6302, 6303, 6304, 6305.
6306, 6307.10,(EN) 6307.90, 6308. or 9404.90</JL>(EN)BD>; and... (Emphasis added)

As the statute does not break out subheading 9404.90,(EN) HTSUS, it is Customs position
that the statute takes precedence over the regulation. That is to say, Customs cannot
exclude by regulation what is specifically included by statute. Accordingly, in determining
the origin of the subject cushions, the 102.21 rules of origin are applicable."

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the
single country, territory, or insular possession in which the good was wholly obtained or
produced." As the stadium seat cushion is not wholly obtained or produced in a single
country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product
cannot be determined under paragraph (c)(1) of this section, the country of origin of the
good is the single country, territory, or insular possession in which each of the foreign
materials incorporated in that good underwent an applicable change in tariff classification,
and/or met any other requirement, specified for the good in paragraph (e) of this section:"


UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Division of Enforcement
Bureau of Consumer Protection

May 14, 2001

Terrie A. Gleason, Esq.

Juhong Kim, Esq.

Baker & McKenzie

815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

Dear Mrs. Gleason and Mr. Kim:

This is in reply to your letter requesting written confirmation regarding the proper
country-of-origin marking of a stadium seat cushion imported by R.G. Barry Corporation from
Mexico. It is our understanding that the seat cushion is assembled in Mexico from U.S. and
foreign components. Specifically, you state that the stadium seat cushion is composed of: (1)

a cushion consisting of plastic foam, (2) a textile cover, and (3) a water-based energy pack. The
plastic foam is produced either in the United States or abroad. The textile cover is assembled in
Mexico from fabric that is made and cut in the USA. The water-based energy pack is made in
the United States from domestic materials. The three components for the stadium seat cushion
are assembled into the seat cushion in Mexico, and then the finished product is shipped into the
United States.

Your letter enclosed a copy of binding ruling “NY G83156" from the U.S. Customs
Service, dated November 6, 2000, regarding the stadium seat cushions. The ruling did not
require foreign origin marking on the finished stadium seat cushion. Further, the ruling states:
“The country of origin of the stadium seat cushion for marking purposes is the United States.” I
contacted U.S. Customs National Import Specialist, John Hansen, about the ruling, and he
assured me that the ruling should not be construed as implying that U.S. Customs holds that the
stadium seat cushions may be marked “Made in USA,” or with any equivalent expression.

As you know, the Federal Trade Commission administers the Rules and Regulations
Under the Textile Fiber Products Identification Act. Rule 33(a)(4), 16 C.F.R. § 303.33(a)(4),
states, in part, that

(4) Each textile fiber product partially manufactured in a foreign country and partially
manufactured in the United States shall contain on a label the following information:
(i) The manufacturing process in the foreign country and in the USA; for example:


1

The subject stadium seat cushion is classified in subheading 9404.90.2000(EN), HTSUSA,
which provides for other quilts, eiderdowns, comforters and similar articles, with an outer
shell of man-made fibers. The seat cushion is entitled to the NAFTA "MX" duty rate of
Free upon compliance with all applicable laws, regulations and agreements,

The country of origin of the stadium seat cushion for marking purposes is the United
States.

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 19 CFR
181.100(a)(2). This section states that a ruling letter, either directly, by reference, or by
implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19
C.F.R. 181)). Should it be subsequently determined that the information furnished is not
complete and docs not comply with 19 CFR 181.100(a)(2), the ruling will be subject to
modification or revocation. In the event there is a change in the facts previously furnished,
this may affect the determination of country of origin. Accordingly, if there is any change
in the facts submitted to Customs, it is recommended that a new ruling request be
submitted.

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 John Hansen at 212-637-7078.

Sincerely,

Robert B. Swierupski
Director,

National Commodity
Specialist Division


1
(NAFTA) into the HTSUSA. Note 12(a) provides, in pertinent part:

(ii) Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and
that qualify to be marked as goods of Mexico under the terms of the marking rules... and are
entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed
by the symbol "MX" in parentheses. are eligible for such duty rate... .

Accordingly, the seat cushion at issue will be eligible for the "Special" "MX" rate of duty
provided they are NAFTA "originating" goods under General Note 12(b), HTSUSA, and they
qualify to be marked as goods of Mexico. Note 12(b) 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 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

The plastic foam may be made in a non-NAFTA country and you have not indicated the origin of
the yarn used to make the fabric cover. Accordingly, the subject merchandise qualifies as a good
of Mexico only if the good has been transformed in Mexico such that the non-originating
matcrial undergoes the applicable change in tariff.

The stadium seat cushion is classified in subheading 9404.90,(EN) HTSUSA. For merchandise
classifiable in this heading, subdivision (t), chapter 94, states that:

A change to subheading 9404.90 (EN)from any other chapter, except from headings 5007, 5111
through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408 or 5512 through 5516.

The non-originating materials used to make the seat cushion undergo the requisite change in


BAKER & M° KENZIE

Mr. Stephen Ecklund
April 30, 2001
Page 2

Product Description

RG Barry is a leading domestic manufacturer and importer of footwear and thermal
comfort products. The particular product in issue here is RG Barry’s Stadium Seat Cushion.
The Stadium Seat Cushion is composed of (1) a cushion consisting of plastic foam, (2) a textile
cover and (3) a water-based energy pack. The plastic foam is produced either in the United
States or abroad. The textile cover is assembled in Mexico from fabric formed and cut in the
United States. The water-based energy packs are made under patent in the United States from
U.S.-origin materials. The water based energy pack is designed to be heated in a microwave
oven and inserted into the seat cushion. The three components for the Stadium Seat Cushion are

assembled into the seat cushion in Mexico, which is shipped into the United States.

Customs Marking Requirements

On November 6, 2000, the U.S. Customs Service (“Customs”) issued a binding ruling
finding that the Stadium Seat Cushion is a U.S.-origin item for country of origin marking
purposes. NY Ruling #G83156 (November 6, 2000) (copy enclosed). As such, for Customs
purposes, the Stadium Seat Cushion is not required to be marked with any country of origin.
Customs based its ruling on the new rules it published in the Federal Register on July 11, 2000
(65 Fed. Reg. 42,634 (July 11, 2000)) which removed a section from the Customs Regulations
(i.e., Section 12.130(c)(1)) that would have required RG Barry’s Stadium Seam Cushion to be

considered a Mexican-origin good for country of origin marking purposes.

FTC Marking Requirements

Notwithstanding Customs’ determination that the Stadium Seat Cushion does not need to

be marked for Customs purposes, the Stadium Seat Cushion is a “textile fiber product” for


BAKER & M°KENZIE

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camo. Rao HONG KONG FACSIMILE (202) 452-7074 GUACALAIARA RODE ANERO  WAEMINGTON, 8
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Conoon umn Stowers
April 30, 2001
Revised May 3, 2001
VIA HAND DELIVERY

Mr. Stephen Ecklund

Federal Trade Investigator

Division of Enforcement

Bureau of Consumer Protection

Federal Trade Commission

601 Pennsylvania Avenue, N.W. - 4" Floor
Washington, D.C. 20580

Re: FTC Country of Origin Marking of Stadium Seat Cushion
Imported by R.G. Barry Corporation from Mexico

Dear Mr. Ecklund:

On behalf of our client, R.G. Barry Corporation (“RG Barry”), we hereby request written
confirmation of the proper country of origin marking of a stadium seat cushion imported by RG
Barry from Mexico (hereinafter “Stadium Seat Cushion”). We discussed this matter with you
recently and you indicated that, under the facts described below, we may inquire whether it is
permissible for RG Barry to mark its Stadium Seat Cushion, “Textile Cover: Made in USA

With Some Foreign Processing.”


Baker & McKenzie - Page 2

The regulations then set forth several examples. Various truthful disclosures not contained in the
list of examples may be nonetheless appropriate, depending on the circumstances. With respect
to the specific scenario set forth in your letter, Commission staff has given this matter careful
consideration and does not object to the disclosure that you propose, namely: “Textile Cover:
Made in USA With Some Foreign Processing.” As an alternative, the label might state “Fabric
made and cut in USA. Sewn abroad.”

In accordance with Section 1.3(c) of the Commission's Rules of Practice and Procedure,
16 C.F.R. § 1.3(c), this is a staff opinion only and has not been reviewed or approved by the
Commission or by any individual Commissioner, and is given without prejudice to the right of
the Commission later to rescind the advice and, where appropriate, to commence an enforcement
action.

In accordance with Section 1.4 of the Commission's Rules of Practice and Procedure, 16
CFR. § 1.4, your request for advice, along with this response, will be placed on the public
record.

Thope this information has been helpful.
Sincerely,

Se he!

Steve Ecklund
Federal Trade Investigator