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HQ 965744




October 3, 2002

CLA-2 RR:CR:SM 965744 mbg

CATEGORY: CLASSIFICATION

TARIFF NO.: 6105.10.0010; 9819.11.09

Ms. Sylvia Wilson
Prestige Clothing Manufacturers
195 Leicester Road
Mobeni 4052
Durban, South Africa

RE: African Growth and Opportunity Act; men’s knit cotton shirt

Dear Ms. Wilson:

This is in response to your letter of July 11, 2002, on behalf of Prestige Clothing Manufacturers, requesting a binding ruling on the eligibility of a men’s knit shirt for preferential treatment under the African Growth and Opportunity Act (“AGOA”).

FACTS:

The subject garment, style name “Hudson”, is a men’s knit shirt of 100 percent cotton fabric manufactured in South Africa. The shirt is manufactured for the “Tommy Hilfiger” company with 2.5 stitches per centimeter and a hemmed bottom. The shirt features a separate 100 percent cotton knit v-neck collar, a triangular woven fabric insert in the back of the shirt, a narrow piece of fabric inserted over the seam in the collar to protect from wear and tear as well as a small embroidered emblem on the front of the shirt.

You have stated that all of the fabric and the trimmings are manufactured in South Africa from yarns manufactured in South Africa with the exception of the triangular insert in the interior of the back of the shirt. The triangular piece of fabric is manufactured in Asia. You have also provided that the shirt will be completely assembled in South Africa by Prestige Clothing.

The subject men’s shirt will be classified in subheading 6105.10.0010 of the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”).

ISSUE:

Whether the subject apparel is eligible for preferential treatment under AGOA?

LAW AND ANALYSIS:

The Trade and Development Act of 2000 (the Act”) was signed into law on May 18, 2000 (Pub. L. 106-200, 114 Stat. 251). Title I of the Act concerns trade benefits for sub-Saharan Africa and is referred to as the African Growth and Opportunity Act (“AGOA”). Section 112 of the Act (codified at 19 U.S.C. 3721) specifies the textile and apparel articles that are eligible for duty-free and quota-free treatment when imported directly into the customs territory of the U.S. from a beneficiary sub-Saharan African country. Section 3108 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), enacted on August 6, 2002, amended the AGOA to modify the treatment accorded to textile and apparel articles imported from beneficiary sub-Saharan African countries.

Presidential Proclamation 7350 dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 FR 59321), implemented the AGOA by designating the eligible beneficiary sub-Saharan African countries and amending Chapter 98, Harmonized Tariff of the U.S. (including the creation of new subchapter XIX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the 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.

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.

South Africa was designated as a beneficiary sub-Saharan African country under AGOA by Presidential Proclamation 7350. The USTR issued a determination finding that South Africa has adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents in connection with shipments of textile and apparel articles and has implemented and follows, or is making substantial progress toward implementing and following, the customs procedures required by the AGOA, effective March 7, 2001. See 66 Fed. Reg. 14425, dated March 12, 2001.

Subheading 9819.11.09, HTSUS, provides as follows:

Apparel articles wholly assembled in one or more such countries from fabric wholly formed in one or more such countries from yarn originating in either the United States or one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 and are wholly formed and cut in one or more such countries), subject to the provisions of U.S. Note 2 to this subchapter.

U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.09.

In this case, the yarn and the fabric are wholly formed in South Africa with the exception of the foreign fabric used for the triangular patch, and the fabric is cut and wholly assembled into apparel in South Africa. Accordingly, the garments would be entitled to be classified in subheading 9819.11.09, HTSUS, subject to the quantitative limits set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provided the foreign fabric is considered a trimming.

II. Findings & Trimmings Requirements

Subchapter XIX, U.S. Note 3(a), HTSUSA, provides in pertinent part:

An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains—

(i) findings or trimmings of foreign origin, if the value of such findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article[.]

The Interim Regulations, regarding findings and trimmings further provide:

An article otherwise described under paragraph (a) of this section will not be ineligible for the preferential treatment referred to in [19 C.F.R.] § 10.211 because the article contains:

(i) Findings and trimmings of foreign origin, if the value of those findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. For the purposes of this section “findings and trimmings” include, but are not limited to, hooks and eyes, snaps, buttons, ‘bow buds’, decorative lace trim, elastic strips (but only if they are each less than 1 inch in width and are used in the production of brassieres), zippers (including zipper tapes), labels, and sewing thread except in the case of an article described in paragraph (a)(3) of this section.

See 19 C.F.R. §10.213(b)(1)(i).

“Findings” are generally accepted to be sewing essentials used in textile goods while “trimmings” are decorative or ornamental parts. See Headquarters Ruling Letter (“HQ”) 965076, dated April 18, 2002.

In HQ 562435, dated September 25, 2002, Customs classified a shirt which had similar foreign fabric pieces sewn in the interior of the shirt. Customs stated:

In this instance, the six ancillary components are textile fabric components that we believe are beyond the scope of "findings" and "trimmings." None of the components are sewing essentials such as buttons or zipper tapes or otherwise analogous to any of the findings examples set forth in Subchapter XIX, U.S. Note 3(b), HTSUS, and therefore, they would not be considered "findings." In HRL 559738, dated July 2, 1996, Customs held that a suede yoke and elbow patches for a jacket did not constitute "findings" or "trimmings" as they served more than just a decorative purpose, unlike lace trim for instance. Although the inside collar band, outside collar band, undercollar, tri label piece and under cuff are in a contrasting color to the remainder of the shirt, they are similar to the suede yoke and elbow patches that were the subject of HRL 559738 in that they clearly serve more than just a decorative purpose. The v-insert piece, while a styling feature of the garment, is a part of the shirttail integral to the design of the bottom of the shirttail. Therefore, we find that the six ancillary components are not "trimmings."

Therefore, in regard to the facts of this case, the subject shirt, classified in subheading 6105.10.0010, HTSUSA, is said to be cut and assembled in South Africa from fabrics produced in South Africa. The triangular fabric piece in the interior back of the shirt of foreign origin and used in style “Hudson” is not acceptable as a finding or trimming under AGOA. Therefore, the shirt will not be eligible for AGOA preferential treatment if the subject triangular piece of foreign fabric is utilized.

The finding and trimmings exception applies to those findings and trimmings which are of foreign origin and therefore, the embroidery, and the fabric cover over the seam, which are said to be manufactured in South Africa, are not included in the 25 percent calculation.

HOLDING:

The subject men’s shirt, as described above, is not eligible for preferential treatment under the AGOA.

The subject merchandise is properly classified in subheading 6105.10.0010, HTSUSA, which provides for “men’s or boys’ shirts, knitted or crocheted: Of cotton: Men’s” The general column one rate of duty is 20 percent ad valorem and the designated textile restraint number is 338.

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 you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is updated weekly and is available for inspection at the local Customs office. The Status Report on Current Import Quotas (Restraint Levels) is also available on the Customs Electronic Bulletin Board (CEBB) which can be found on the U.S. Customs website at .

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

Sincerely,

Myles Harmon, Acting Director

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