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HQ 959628





September 16, 1996

CLA-2 RR:TC:TE 959628 CAB

CATEGORY: CLASSIFICATION

Mr. John F. McManus
Itochu International, Inc.
335 Madison Avenue
New York, NY 10017

RE: Country of origin of knit to shape sweaters; Section 102.21(c)(3), Customs Regulations

Dear Mr. McManus:

This is in response to your inquiry of July 2, 1996, requesting a tariff classification ruling under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) and a country of origin determination pursuant to Section 102.21, Customs Regulations, for certain women's sweaters. The tariff classification issue was addressed in NY A85525, dated August 7, 1996, by New York Customs and Customs Headquarters will respond to your country of origin issue in this ruling. Samples were submitted for examination. You state that the ports of entry will include but are not limited to New York (Newark and JFK) and Los Angeles (Long Beach and LAX).

FACTS:

There are two women's sweaters at issue. Style 3024 is a women's knitted, sleeveless sweater vest that contains a full-front opening with seven button closures, and a deep V-neckline. Style 3024 also contains oversized armhole openings, scalloped edging around the neckline, placket, and bottom. The front panels are adorned with beading and embroidery.

Style 3026 is a women's knitted, long sleeved cardigan sweater which contains a full-front opening with a deep V-neckline and seven button closures. The neckline, placket, bottom and sleeve ends are finished with scalloped edging. The front panels of the sweater are decorated with embroidery and beading.

The fabric of each sweater has less than nine stitches per two centimeters, measured in the horizontal direction. You state that the fiber content of each sweater fabric, prior to the addition of the embroidery is 55 percent ramie/45 percent cotton. You also state that the embroidery yarns consists of 100 percent rayon fibers.

The manufacturing process for the subject sweaters is as follows:

CASE I

The subject garment components will be knit to shape in the People's Republic of China (hereinafter China), where they will also be embroidered and fully assembled. The finished garments will be exported from Hong Kong to the United States.

CASE II

The garment components will be knit to shape and embroidered in China, but will be assembled in Hong Kong. The finished garments will be exported to the United States from Hong Kong.

ISSUE:

What is the country of origin of the subject sweaters?

LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act (codified at 19 USC Section 3592), new rules of origin were effective for textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product when the good is wholly obtained or produced in a single country, territory, or insular possession. In Case I, garment components are knit to shape, embroidered and fully assembled in China. Assuming that the yarn used to make the sweaters is produced in China, the sweaters in Case I are wholly produced in China. Therefore, in accordance with Section 102.21(c)(1), the country of origin for the sweaters in Case I is China. In Case II, the sweaters are not wholly obtained or produced in a single country, territory, or insular possession, thus, Section 102.21(c)(1) is inapplicable.

Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section. Section 102.21(c)(2) states:

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 foreign material 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.

Section 102.21(e) states "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:"

6110-6117 (3) If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.

The subject sweaters are classifiable under Heading 6110, which provides for, knitted sweaters and similar articles. The applicable tariff shift rule requires a tariff shift to heading 6101 through 6117 from any heading outside that group. In this case, the goods are knit to shape however, they fail to meet the applicable tariff shift requirements as they are classifiable under Heading 6110, HTSUSA, and the sweater components are classifiable under Heading 6117, HTSUSA, which is not outside the specified group (heading 6101-6117). Therefore, the tariff shift rule is not met and Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) applies where the country of origin of a textile or apparel product cannot be determined pursuant to paragraph (c)(1) or (c)(2) and where the merchandise consists of either a good that was knit to shape in a single country, or (with an exception for goods of certain specifically enumerated headings), was wholly assembled in a single country.

Section 102.21(c)(3)(i) provides the following:

If the good was knit to shape, the country or origin of the good is the single country, territory, or insular possession in which the good was knit;....

Section 102.21(c)(b) states the following:

(3) Knit to shape. The term knit to shape applies to any good of which 50 percent or more of the exterior surface area is formed by major parts that have been knitted or crocheted directly to the shape used in the good with no consideration being given to patch pockets, appliques, or the like. Minor cutting, trimming, or sewing of those major parts will not affect the determination of whether a good is "knit to shape."

(4) Major parts. The term major parts means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar parts.

In Case II, the sweater panels are knit to shape and embroidered in China and transported to Hong Kong where they are assembled into the finished sweaters. The subject sweater panels make up more than 50 percent of the exterior surface and are major parts of the finished sweaters. Therefore, in accordance with Section 102.21(c)(3)(i), the country of origin of the sweaters in Case II is China, the country where the goods were knit.

HOLDING:

The country of origin of the sweaters in Case I is China pursuant to Section 102.21(c)(1). The country of origin of the sweaters in Case II is China pursuant to Section 102.21(c)(3).

In your submission, you state that Customs officials erroneously disregarded the rayon embroidery when determining the proper tariff classification for the subject garments. Statistical Note 2, Section XI of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which defines the various fiber restraints and their application states the following, in relevant part: "For the application of this note, where appropriate, only the part of the product which determines the classification under general interpretive rule 3 shall be taken in account." Therefore, the subject sweaters were properly classified in subheadings 6110.90.9040 and 6110.90.9042, HTSUSA, in NY A85525.

Based on quotas notified under the Agreement on Textiles and Clothing, certain silk blends and non-cotton vegetable fiber sweaters assembled in Hong Kong from knit to shape component parts knitted elsewhere currently require a visa from Hong Kong. Accordingly, in Case I, a visa from China is required and in Case II, a visa from Hong Kong is required.

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 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

Should it be subsequently 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 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 in accordance with
19 CFR 177.2.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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