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NY G82329





February 2, 2001

CLA2-RR:NC:61:TA 359 G82329

CATEGORY: CLASSIFICATION

Mr. Francisco Gomez Jr.
R.L. Jones Tecate, Inc.
Customhouse Brokers
P.O. Box 970
Tecate, CA 91980

RE: Classification and status under the North American Free Trade Agreement (the NAFTA), of four styles of women’s knitwear from Mexico; Article 509; Country of Origin Determination 19 CFR 102.21(c)(3); C.R. 12.130(c); T.D. 90-17; T.D. 00-44

Dear Mr. Gomez:

This is in reply to your letter dated August 31, 2000, and received by this office September 19, 2000, on behalf of your interested parties: Toula Manufacturing Ltd. Inc., Medley, Florida, and Manufacturas Toula S.A. de C.V., Tecate, B.C., Mexico, requesting a classification, NAFTA decision and country of origin determination for four styles of women’s knitted wearing apparel which, you state, are partially assembled in Mexico from knit-to-shape component parts that are knitted in the United States, and which will be imported into the United States.

You submitted four samples that are “in the state as they will be imported into the United States”, according to your inquiry. All of the samples are returned to you under separate cover.

FACTS:

You submitted four samples. Style 1171 is a woman’s 80% acrylic, 20% nylon knitted pullover with short sleeves and a round, capped neckline which has a seven inch slit at its center front. The sleeve ends and bottom are finished with tubular knitting. This pullover extends from the wearer’s neck and shoulders to below her waist. Its fabric has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. A picture of this style, which you submitted, shows a round neckline without the front slit.

Style 1174 is a woman’s 80% acrylic, 20% nylon knitted, sleeveless tank top which has 1 and ¼ inch shoulder straps. The armhole openings and the neckline are finished with capping and the bottom is a tubular knit. The fabric of the tank top has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The panels of the submitted sample are sewn together at the shoulders and sides.

Style 3102 is a woman’s 80% acrylic, 20% nylon knitted, long sleeved cardigan. The fabric of the cardigan has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The bottom of the cardigan is a tubular knit. The sleeve ends, placket and neckline are each finished with a strip of knitted fabric. The sample has no means of closure and no pockets. All seams are sewn together.

Style 3103 is a woman’s 80% acrylic, 20% nylon knitted, long sleeved cardigan. The fabric of the cardigan has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The bottom of the cardigan is a tubular knit. The sample has no means of closure and no pockets. The sleeve ends and the placket are each finished with a strip of knitted fabric, however, the neckline is unfinished. All seams are sewn together.

The manufacturing operations for the four styles of women’s knitwear are as follows:

You state that the component panels are knit to shape in the United States;

You also state that these panels are then exported to Mexico where they are assembled into the unfinished garments by the process of looping;

The unfinished garments are then returned to the United States for further processing which you describe as “sewing zippers, sewing collars, sewing pockets, pressing buttonholes, sewing shoulder pads, sewing buttons, and finish pressing”. Such processing “may or may not apply to all of the styles,” according to your submission.

Additionally, you also submitted the following documentation:

Certification by Toula Manufacturing Ltd., Inc., Medley, Florida, that the component panels were knit to shape by them; and that the yarn used for the panels “originates in the United States”, (Glen Raven Mills, Inc., NC).

Certification by the yarn spinner that the yarn originates in “the territory of one or more of the parties” to the North American Free Trade Agreement (the NAFTA)

Declaration of the value of the knitted component panels which was submitted by the Mexican assembler, (Manufacturas Toula), who also supplied the “contracted price of assembly”.

Based on your statement and the certification of the component panel manufacturer, all of the major component panels (the major parts) for each submitted style are considered knit to shape for the purpose of determining the country of origin of the four styles of women’s knitwear.

The General Rules for the Interpretation of the Harmonized Tariff System provide that “any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished article, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article ” GRI’s , Rule 2(a). For the purpose of this ruling, each one of the four styles of women’s knitwear has the essential character of its finished article.

ISSUE:

What are the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for the short sleeved pullover, Style 1171, and the two long sleeved cardigans Styles 3102 and 3103 will be 6110.30.3055, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for sweaters, pullovers . . ., knitted or crocheted, of man-made fibers: other, other, other, other, other, women's or girls’. The general rate of duty will be 32.7 percent ad valorem.

The applicable subheading for the tank top, Style 1174, will be 6109.90.1065, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for T-shirts, singlets, tank tops and similar garments, knitted or crocheted, of other textile materials: of man-made fibers: women's or girls’: Tank tops and singlets: women’s. The general rate of duty will be 32.6 percent ad valorem.

Each of the non-originating materials used to make each one of the four styles has satisfied the changes in tariff classification required under HTUSA General note 12(t)/61.35. The four styles of women’s knitwear are entitled to a FREE rate of duty 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.

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 subject merchandise 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:"

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":

HTSUS Tariff shift and/or other requirements

6109.90.1065 If the good is knit to shape, a change to heading 6101 through 6110.30.3055 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory or insular possession

Section 102.21(e) states that the good must undergo a tariff shift from a heading outside of the designated grouping (i.e. headings 6101-6117); however, this change occurs within that grouping. Accordingly, as the four styles of women’s knitwear and their component panels are all classified inside of the designated grouping, they fail to meet the tariff shift requirement and therefore, the four styles of women’s knitwear do not qualify for country of origin determination under this section and therefore, Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

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

As the subject merchandise is knit to shape in a single country, that is, in the United States, Section 102.21(c)(3) applies.

The country of origin of the four styles of women’s knitted wearing apparel is the United States. However, there is an exception for products from the United States that are sent abroad for processing. Section 12.130(c), Customs Regulations (C.R.), 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 considered 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 Treasury Decision (T.D.) 90-17, issued February 23, 1990, Customs announced a change in practice and position. The change resulted in Customs using Section 12.130 for quota, duty and marking purposes when making country of origin determinations for textile goods. More recently, however, the Treasury Department, the U.S. Customs Service, published Treasury Decision, T.D., 00-44, in the Federal Register, Vol.35, No.133, pages 42634-7, July 11, 2000. The effective date of the decision is October 10, 2000. In it Customs states that C.R. 12.130 no longer controls for the purpose of determining the country of origin marking of textiles and textile products. Instead, Section 102.21, C.R., determines the country of origin marking of a United States produced textile or textile product that is further processed abroad. Therefore, in accordance with T.D. 90-17, and Section 12.130(c), C.R., the country of origin of the four styles of women’s knitwear is Mexico for quota and duty purposes. In accordance with T.D. 00-44, the country of origin for the purpose of the marking label is the United States.

Holding

The four styles of women’s knitwear are eligible for the NAFTA “MX” special duty rate of free upon compliance with all applicable laws, regulations and agreements. All four styles take textile quota category 639. Such products are subject neither to the restraints of quota nor to the requirement of a visa.

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 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.

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 Mike Crowley at 212-637-7077.

Sincerely,

Robert B. Swierupski
Director,

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