320 Livingston Avenue
Listowel, Ontario N4W 3H3
Date of issuance of ruling:
This is in response to your request for an advance ruling on the originating status under the North American Free Trade Agreement (NAFTA) of Wonderart Latch Hook Kits, Series 426 and 429. These products will be imported by Spinrite LP from your manufacturing facility in Washington, North Carolina.
These are rug hooking kits comprised of bundles of pre-cut 100% acrylic, multi-ply yarn in various colours, a woven canvas with a printed image, and instructions. The series 429 kits also include a latch hook tool. The two samples submitted with your request - item 429108, 'Love' and item 426155, 'Daisy' - each measure 12 inches by 12 inches when completed. The kits are classified under HS number 6308.00.00.00, which provides for sets "consisting of woven fabric and yarn, whether or not with accessories, for making up into rugs, tapestries, embroidered table cloths or serviettes, or similar textile articles, put up in packings for retail sale."
The rug hooking kits are assembled at Spinrite's manufacturing facility in Washington, North Carolina and will be exported to Canada for subsequent resale. Information provided in your request indicates that the canvas, instructions and packaging are originating materials that have been produced in the United States. The latch hook, classified under heading 73.19, originates in Taiwan. The acrylic yarn of heading 55.09 is spun in the United States by National Spinning of North Carolina from acrylic fibre of subheading 5506.30 that is imported from Turkey.
This acrylic yarn is considered a non-originating material as the fibre fails to meet the tariff change required by the applicable specific rule of origin, which is: "a change to headings 55.01 through 55.11 from any other chapter, except from headings 52.01 through 52.03 or 54.01 through 54.05".
Analysis and Justification
At issue is whether the Wonderart Latch Hook Kits qualify for preferential NAFTA tariff treatment under the NAFTA Rules of Origin Regulations. As these kits are not wholly obtained or produced entirely in one of the NAFTA territories, they will qualify as originating goods only if the non-originating materials used in their manufacture meet the requirements of the Specific Rules of Origin found in Schedule I of the NAFTA Rules of Origin Regulations. The specific rule of origin for the kits requires:
A change to headings 63.04 through 63.10 from any other chapter, except from headings 51.06 through 51.13, 52.04 through 52.12, 53.07 through 53.08 or 53.10 through 53.11, Chapters 54 through 55, or headings 58.01 through 58.02 or 60.01 through 60.06, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA countries.
The non-originating latch hook in the series 429 kits meets this tariff change; however, the acrylic yarn of heading 55.09 is unable to meet the required change in tariff classification and therefore the Wonderart Latch Hook Kits are not considered originating goods under Article 401(b) of the NAFTA.
With respect to your inquiry regarding the marking of the rug hooking kits, Schedule I of the Determination of Country of Origin for the Purpose of Marking Goods (NAFTA Countries) Regulations identifies goods that require country of origin marking. Rug hooking kits are not listed in Schedule I as goods which require marking, thus the Wonderart Latch Hook Kits are not subject to the country of origin marking requirements upon importation into Canada. Please be advised that these goods may be subject to the marking and/or labelling requirements of other government departments/agencies.
The Wonderart Latch Hook Kits do not qualify as originating goods and are not entitled to the benefits of preferential tariff treatment under Article 401(b) of the NAFTA Agreement.
This ruling has been issued under paragraph 43.1(1)(a) of the Customs Act and Article 509 of the NAFTA. It will be honoured by the CBSA for future importations of the goods specified, provided the material facts and circumstances remain as originally presented; all conditions in the ruling have been met; the ruling has not been modified, revoked, revised, or cancelled; and the Customs Tariff legislation has not changed. Should there be a change in the material facts or circumstances pertaining to the goods, you must notify the CBSA as soon as possible. You may request that the advance ruling be modified or revoked as of the date of the change.
Importers should quote the advance ruling number at the time of importation in either the description field of the B3 entry document or on the Canada Customs Invoice. Exporters or producers should quote the advance ruling number on the Certificate of Origin or commercial invoice accompanying the goods.
Should you disagree with this advance ruling, you may file a dispute notice under subsection 60(2) of the Customs Act within 90 days of the date of issuance. Please see the procedures outlined in Appendix C of the CBSA's Memorandum D11-4-16, Advance Rulings for Origin Under Free Trade Agreements.
This advance ruling is considered 'reason to believe' for the purposes of section 32.2 of the Customs Act and the CBSA's Administrative Monetary Penalty System, described in Memorandum D22-1-1.
All Memoranda referenced in this letter may be accessed on the CBSA website.
Consent to the Public Release of the Advance Ruling
As per your consent statement, we will release this advance ruling to the public in accordance with the procedures described in Memorandum D11-4-16. The advance ruling will be published on the CBSA website in 30 days.
Manager, Tariff Policy Unit 'B'
Trade Policy Division
- Date modified: