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HQ 960447




September 29, 1998
CLA-2 RR:CR:TE 960447 jb

CATEGORY: CLASSIFICATION

TARIFF NO.: 6106.20.2010

Mr. Arthur Stein
ETA Import & Export Ltd.
1 Cross Island Plaza, 3rd Floor
Jamaica, NY 11422

RE: Classification of women's knit shirt; eligibility under the North American Free Trade Agreement (NAFTA) and Tariff Preference Levels (TPL) for women's knit shirt

Dear Mr. Stein:

This is in response to your letter, dated March 26, 1997, requesting classification under the Harmonized Tariff Schedule of the United States (HTSUS) for a women's knit shirt. You also request whether the merchandise is eligible for treatment under the North American Free Trade Agreement (NAFTA) and for consideration under the Tariff Preference Levels (TPL).

FACTS:

The subject merchandise consists of a woman's shirt, referenced style number 7483, constructed from 80 percent polyester, 20 percent rayon knit pile fabric with more than 10 stitches per centimeter in both the horizontal and vertical directions, and features a plain round neckline, a partial placket opening with a five button right over left closure, long sleeves, and a hemmed bottom.

You state that the garment is cut and sewn in Mexico from fabric imported from Taiwan.

ISSUE:

1. What is the proper classification for the subject merchandise?

2. Does the merchandise qualify for NAFTA?

3. Does the merchandise qualify for consideration under the Tariff Preference Levels?

LAW AND ANALYSIS:

Classification

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is in accordance with the General Rules of Interpretation. GRI 1 requires that classification be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied, in the order of their appearance.

Heading 6106, HTSUS, provides for women's or girls' blouses and shirts, knitted or crocheted. Accordingly, the subject women's knit shirt is properly classified in the appropriate subheading in heading 6106, HTSUS, for women's knit shirts made of man-made fibers.

North American Free Trade Agreement Eligibility

The subject knit shirt undergoes processing operations in Mexico which is a country provided for under the North American Free Trade Agreement (NAFTA). General Note 12, HTSUSA, incorporates Article 401 of the North American Free Trade Agreement (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... . [Emphasis added]

Accordingly, the knit shirt at issue will be eligible for the "Special" "MX" rate of duty provided it is a NAFTA "originating" good under General Note 12(b), Harmonized Tariff Schedule of the Unites States Annotated (HTSUSA), and it qualifies to be marked as a good 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

Accordingly, the subject knit shirt qualifies for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A) are met, that is, if the merchandise is transformed in the territory of Mexico so that the non-originating material (the fabric formed in Taiwan) undergoes a change in tariff classification as described in subdivision (t).

As the knit shirt is classifiable in subheading 6106.20.2010, HTSUSA, subdivision (t), Chapter 61, rule 25, applies. That note states:

A change to headings 6105 through 6106 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54 or headings 5508 through 5516 or 6001 through 6002, 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 parties.

When the fabric for the subject knit shirt leaves Taiwan it falls within headings 6001-6002, HTSUS. As headings 6001 through 6002 are excepted by subdivision (t), chapter 61, rule 25, the knit shirt does not meet the terms of the note. Accordingly, the subject merchandise is not eligible for NAFTA treatment.

Tariff Preference Levels

Additional U.S. Note 3(b) states:

The rate of duty in the "Special" subcolumn of rates of duty column 1 followed by the symbol "MX" in parentheses shall apply to imports from Mexico, up to the annual quantities specified in subdivisions (g)(i) of this note, of apparel goods provided for in chapters 61 and 62 that are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a NAFTA party from fabric or yarn produced or obtained outside the territory of one of the NAFTA parties.

As per the terms of Additional U.S. Note 3(b), the subject knit shirt which is cut and sewn in Mexico from fabric produced in Taiwan, is eligible for the tariff preference levels.

HOLDING:

The subject knit shirt, referenced style number 7483, is properly classified in subheading .
6106.20.2010, HTSUSA, which provides for, women's or girls' blouses and shirts, knitted or crocheted: of man-made fibers: other: women's.

The subject merchandise is not eligible for NAFTA treatment.

Although the subject merchandise is not eligible for the NAFTA preference, it is eligible for the tariff preferential level assuming the tariff preferential level is available up to the annual quantity specified. However, to receive the preferential tariff treatment a certificate of eligibility is required at the time of entry. A certificate of eligibility, and if applicable, a visa, may be obtained by the manufacturer of the merchandise from the local SECOFI (Secretaria de Comercio Y Fomento Industrial) office. Thus provided the appropriate documents are submitted at the time of entry, the rate of duty is 4.5 percent ad valorem and the quota category is 639.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent negotiations and changes, we suggest that your client check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service which is updated weekly and is available at the local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, your client should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Rulings Division

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