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HQ 562372





July 18, 2002

CLA-2 RR:CR:SM 562372 KSG

CLASSIFICATION: 9819.11.12

Alan R. Klestadt, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 245 Park Avenue
33rd Floor
New York, NY 10167-3397

RE: Eligibility of certain brassieres for duty-free treatment under the AGOA; subheading 9819.11.12; 102.21(c)(2)

Dear Mr. Klestadt:

This is in response to your letter dated January 29, 2002, on behalf of Mast Industries, Inc., in which you requested a binding ruling concerning the eligibility of certain brassieres for preferential treatment under the African Growth and Opportunity Act ("AGOA"). A sample finished brassiere and blank were submitted for our examination.

FACTS:

Mast Industries proposes to produce a brassiere, style #438-3588TE/LBF 292, constructed from 87% nylon/10% lycra spandex knit fabric. We note that the remaining 3% of the fabric content was not identified. The garment features an underwire, hook and eye closure at the back, and two adjustable shoulder straps.

In scenario one, Mast proposes to do the following processing in Israel: the tubular blank is knitted on a Santoni knitting machine; and the blank is dyed. In Madagascar, the blank is split at the back to form the brassiere opening; the blank is heat-molded to form the cups; excess fabric is trimmed while the capping is sewn along the upper edge of the brassiere and the front half of the shoulder straps are formed; the plastic loop and slider are attached to the elastic part of the shoulder straps which are then attached to the brassiere to complete the shoulder straps; the hook and eye closures and the labels are attached; the underwire is sewn onto the blank; and the finished garment is pressed and packed.

In scenario two, the processing is the same except that the split tubing and heat-molding operations will be performed in Israel.

ISSUE:

What is the proper classification of the brassieres?

What is the country of origin of the brassieres, manufactured as described above?

Whether the brassieres, manufactured as described above in scenarios one and two, are eligible for duty-free treatment under the AGOA.

LAW AND ANALYSIS:

The brassieres are classified in subheading 6212.10.9020, HTSUS.

The second issue involves the country of origin of the brassieres under 19 CFR 102.21.

Section 334 of the Uruguay Round Agreements Act (“Section 334") provides rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 CFR 102.21) implements section 334. Pursuant to 19 CFR 102.21, the country of origin of a textile or apparel product is determined by sequential application of the general rules set forth in paragraphs (c)(1) through (c)(5).

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, 19 CFR 102.21(c)(1) 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 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.

With regard to paragraph (c)(2), the applicable rule set forth at 19 CFR 102.21(e) is:

6210-62121) If the good consists of two or more component parts, a change to an assembled good of heading 6210 through 6212 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession.

(2) If the good does not consist of two or more component parts, a change to heading 6210 through 6212 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5602 through 5603, 5801 through 5806, 5809 through 5811, 5903, 5906 through 5907, 6001 through 6002, and 6217, and subheading 6307.90 and provided that the change is a result of a fabric-making process.

This article involves two or more component parts and is wholly assembled in Madagascar under both scenarios. Therefore, pursuant to 19 CFR 120.21(c)(2), the country of origin of the brassieres would be Madagascar under both scenarios.

The third issue is whether the brassieres are eligible for preferential tariff treatment under the AGOA. Title I of the Trade and Development Act of 2000, Pub. L 106-200, 114 Stat. 251, May 18, 2000, referred to as the African Growth and Opportunity Act (“AGOA”), seeks to promote trade opportunities between the U.S. and the countries of sub-Saharan Africa. The AGOA provides for the extension of duty-free treatment under the GSP to non-textile articles normally excluded from GSP duty-free treatment that are not import sensitive; and the entry of specific textile and apparel articles free of duty. In order to implement the AGOA, Customs issued Interim Regulations in T.D. 00-67, 65 Fed. Reg. 59668, which became effective October 1, 2000. With regard to the textile and apparel provisions, the law became effective on October 1, 2000, and shall remain in effect through September 30, 2008. See Sec. 112(f), AGOA.

The enhanced trade benefits provided by the AGOA are available to eligible textile and apparel articles imported directly from a country (1) that is designated as a beneficiary sub-Saharan African country and (2) which the U.S. Trade Representative (“USTR”) has determined by a proclamation published in the Federal Register has satisfied the requirements of the AGOA and therefore should be afforded the tariff treatment authorized in such Act. Such countries shall be enumerated in U.S. Note 1, Subchapter XIX, Chapter 98, HTSUS, whenever the USTR issues a Federal Register notice as described herein. See Presidential Proclamation 7350, Annex, dated October 2, 2000, 65 Fed. Reg. 59321. Madagascar was designated as a beneficiary sub-Saharan African country under AGOA by Presidential Proclamation 7350.

Pursuant to U.S. Note 2(d), Subchapter XIX, Chapter 98, HTSUS, Madagascar was designated as a lesser developed beneficiary country for the purposes of subheading 9819.11.12, HTSUS.

Section 112(b)(3)(B) of AGOA provides:

Subject to subparagraph (A), preferential treatment shall be extended through September 30, 2004, for apparel articles wholly assembled in one or more lesser developed beneficiary sub-Saharan African countries regardless of the country of origin of the fabric used to make such articles.

Subheading 9819.11.12 provides:

Apparel articles wholly assembled in a lesser developed such country enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive

U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.09 and 9819.11.12. U.S. Note 2(a) and (b), provide:

(a) Imports of apparel articles under subheadings 9819.11.09 and 9819.11.12 shall be limited, in the period beginning on the date announced in a notice published in a Federal Register by the United States Trade Representative and continuing through the close of September 30, 2001, to an aggregate quantity not to exceed 1.5 percent of the aggregate square meter equivalents of all apparel articles imported into the United States in the preceding 12-month period for which data are available. Of that aggregate quantity, an amount not to exceed 1 percent of such aggregate square meter equivalents shall be eligible to enter under such subheadings during the period beginning on the date announced in such Federal Register notice and continuing through the close of December 31, 2000. The remaining 0.5 percent of such aggregate square meter equivalents, together with any quantity remaining unfilled from the 1 percent eligible to enter prior to January 1, 2001, shall be eligible to enter under such subheadings during the period beginning on January 1, 2001 and continuing through the close of September 30, 2001.

(b) Such imports of apparel articles under subheadings 9819.11.09 and 9819.11.12 shall be limited, in each of the seven one-year periods beginning on October 1, 2001, to an aggregate quantity not to exceed the applicable percentage set forth herein of aggregate square meter equivalents of all apparel articles imported into the United States in the preceding 12-month period for which data are available:

12-Month Period Applicable Percentage

October 1, 2001 through September 30, 2002 1.7857

October 1, 2002 through September 30, 2003 2.0714 October 1, 2003 through September 30, 2004 2.3571 October 1, 2004 through September 30, 2005 2.6428 October 1, 2005 through September 30, 2006 2.9285 October 1, 2006 through September 30, 2007 3.2142 October 1, 2007 through September 30, 2008 3.5

The Customs Interim Regulations define "wholly assembled in" in 19 CFR 10.212 as:

When used with reference to a textile or apparel article in the context of one or more beneficiary countries or one or more lesser developed beneficiary countries, the expression "wholly assembled in" means that all of the components of the textile or apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or one or more lesser developed beneficiary countries.

Section 112(b)(3)(B) of AGOA requires that fabric be wholly assembled in the LDBC into an apparel article. Scenario one, in which the processing in Madagascar includes splitting the blank and heat-molding to form the cups, as well as trimming, sewing the capping, forming the front half of the shoulder straps, attachment of the remaining part of the shoulder straps, attaching the plastic loop and slider, attachment of the hook and eye closures and labels, sewing the underwire onto the blank and pressing and packing the finished garment satisfies the definition of "wholly assembled in" because all the components are joined together in Madagascar and the fabric of Israeli-origin will be wholly assembled in Madagascar into finished apparel. The finished brassieres under this scenario would be eligible for preferential treatment under subheading 9819.11.12, HTSUS, subject to the quantitative limitations set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS. Scenario two, in which the processing in Israel includes splitting the blank and heat-molding to form the cups, and the processing in Madagascar includes the trimming, sewing the capping, forming the front half of the shoulder straps, the attachment of the remaining part of the shoulder straps, attaching the plastic loop and slider, attachment of the hook and eye closures and labels, sewing the underwire onto the blank and pressing and packing the finished garment, does not satisfy section 112(b)(3)(B) of the AGOA because the heat molding operation, which forms the brassiere to its shape, is performed in Israel. Therefore, the blanks that are sent to Madagascar would no longer be considered fabric so that the required transition from fabric to a finished apparel article is not taking place in Madagascar.

HOLDING:

Pursuant to 19 CFR 102.21(c)(2), the country of origin of the brassieres under both scenarios is Madagascar for the purposes of Customs laws and the administration of quantitative restrictions.

Based on the information provided, the brassieres, manufactured as described in this case in scenario one, are eligible for preferential treatment under the AGOA subject to the quantitative limitations set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS.

The brassieres, manufactured as described in scenario two, are not eligible for preferential treatment under the AGOA.

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 19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the 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. 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 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,

Myles B. Harmon, Acting Director
Commercial Rulings Division


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