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HQ 562251




April 18, 2002

MAR-2 RR:CR:SM 562251 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9820.11.24

Sarah B. Magruder
The Forstmann Company
498 Seventh Avenue- 15th Floor
New York, NY 10018-6701

RE: U.S.-Caribbean Basin Trade Partnership Act; subheading 9820.11.24; yarn not wholly formed in U.S.

Dear Ms. Magruder:

This is in response to your letter of September 26, 2001, requesting a binding ruling on the eligibility of certain garments made from a wool/silk blended fabric for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”).

FACTS:

The Forstmann Company is a domestic weaver of primarily wool and wool-blended fabrics. Their plants, which are located in Dublin, Georgia, card, spin, weave, dye and finish fabric.

Forstmann purchases silk yarn imported from China, which is blended with U.S.-origin woolen yarns into fabric that ranges from 18 to 50 percent silk.

You asked whether garments made of silk/wool blend from 18 to 50 percent silk by weight are eligible for preferential treatment under the CBTPA.

We will assume for the purposes of this ruling that the fabric is cut and assembled into garments in CBTPA beneficiary countries.

ISSUE:

Whether garments made from the wool/silk blended fabric, manufactured as described above, are eligible for duty-free treatment under the CBTPA. LAW AND ANALYSIS:

Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213(b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.

Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in section 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.

Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.

The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country: (1) that is designated as a CBTPA beneficiary country; and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles.

In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000. It is noted that the issue raised in this ruling letter is outside the scope of the comments received.

The relevant provision is set forth in 19 U.S.C. 2703(b)(2)(A)(v)(I), which provides as follows:

Apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more CBTPA beneficiary countries, from fabrics or yarn that is not formed in the United States or in one or more CBTPA beneficiary countries, to the extent that apparel articles of such fabrics or yarn would be eligible for preferential treatment, without regard to the source of the fabrics or yarn, under Annex 401 of the NAFTA.

Subheading 9820.11.24, HTSUS, was created for the entry of articles eligible for preferential treatment under the above section (see Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329)). This subheading provides for the duty-free entry of:

Apparel articles both cut (or knit-to-shape) assembled in one or more such countries from fabrics or yarn not formed in the United States or in one or more such countries, provided that such apparel articles of such fabrics or yarn would be considered an originating good under the terms of general note 12(t) to the tariff schedule without regard to the source of the fabric or yarn if such apparel article had been imported from the territory of Canada or the territory of Mexico directly into the customs territory of the United States.

Further, as you are aware, pursuant to U.S. Note 3(a)(iii), Subchapter XX, HTSUS, an article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains fibers or yarns not wholly formed in the United States or in one or more designated beneficiary countries enumerated in general note 17(a) to the tariff schedule, provided that the total weight of all such fibers and yarns is not more than 7 percent of the total weight of the article. Therefore, if the Chinese yarn in this case was not more than 7 percent by weight non-U.S., the garments would not be ineligible for CBTPA treatment. Because the Chinese yarn in this case is more than 7 percent by weight non-U.S., the "de minimus" rule is not applicable.

Pursuant to U.S. Note 2(a), Section XI, HTSUS, goods classifiable in chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over each other single textile material. When no one textile material predominates by weight, the goods are to be classified in as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration. Subheading Note 2(a), Section XI, HTSUS, provides that products of chapters 56 to 63 containing two or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under U.S. Note 2(a) for the classification of a product of chapters 50 to 55 or of heading 5809 consisting of the same textile materials.

Pursuant to Subheading Note 2(a), Section XI, HTSUS, and U.S. Note 2(a), Section XI, HTSUS, garments made of a wool/silk blended fabric that is less than 50 % by weight silk (18-49%), would be classified as wool garments. Subheading 9820.11.24, HTSUS, applies to apparel article "of such fabrics or yarn that is not formed in the United States or in one or more CBTPA beneficiary countries." Since the apparel in this case would be classified as wool garments, it is the wool yarn that is determinative. In this case, the wool yarn is formed in the United States and therefore, the garments could not be entered under subheading 9820.11.24, HTSUS. Based on the facts presented in this case, no other CBTPA provisions appear applicable.

HOLDING:

Garments made of 18-50 percent by weight silk/wool blend fabrics, as described above, are not eligible for preferential treatment under the CBTPA.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Commercial Rulings Division

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