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HQ 965871





September 25, 2002

CLA-2 RR:CR:TE 965871 JFS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.12

Mr. Milad F. Millet
Agridotcom Limited
P.O. Box 439
Accra, Ghana

RE: African Growth and Opportunity Act; Knit Shirt; Lesser Developed Country Status; Ghana

Dear Mr. Millet:

This is in response to your letter dated August 26, 2002, requesting a binding ruling on the eligibility of a man’s knit shirt for preferential treatment under the African Growth and Opportunity Act (“AGOA”).

FACTS:

You submitted a short sleeved shirt manufactured from knit material. You state that the knit fabric, collars, cuffs and accessories will all be sourced from Asia. For the purposes of this ruling, Customs will infer that all cutting, sewing and assembly of the garments will occur in Ghana.

ISSUE:

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

LAW AND ANALYSIS:

Title I of the Trade and Development Act of 2000, Pub. L 106-200, 114 Stat. 251, May 18, 2000, as amended by section 3108 of the Trade Act of 2002, 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.

Ghana was designated as a beneficiary sub-Saharan African country under AGOA by Presidential Proclamation 7350. The USTR issued a determination finding that Ghana 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 20, 2002. See 67 Fed. Reg. 14761, dated March 27, 2002.

Apparel articles wholly assembled in a lesser developed country (LDC) and directly imported into the U.S. are entitled to duty free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, which provides as follows:

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(d) lists Ghana as qualifying for designation as a lesser developed beneficiary country. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12.

The statute allowing for duty free entry of apparel articles from LDC’s, 19 U.S.C. 3721 (b) (3) (B) (i), as amended by section 3108 (a) (3) (B) of the Trade Act of 2002, provides as follows:

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

Emphasis added.

The interim regulations implementing the LDC provision of the AGOA, provide that duty free status is accorded to the following:

(5) Apparel articles wholly assembled in one or more lesser developed beneficiary countries regardless of the country of origin of the fabric used to make the articles;

19 C.F.R. 10.213 (emphasis added).

The provisions of the AGOA, and consequently the Customs regulations, only allow for foreign yarn or fabric to be used in the manufacture of apparel articles in LDC’s. They do not accord duty free status to apparel articles incorporating textile components originating from a foreign country. Collars and cuffs are fabric components. Thus, because the instant shirt incorporates collars and cuffs that are sourced from Asia, the shirt does not qualify for duty free status under the AGOA.

HOLDING:

The subject shirt is not eligible for preferential treatment under the AGOA due to the inclusion of the collars and cuffs that are manufactured in Asia.

Sincerely,

Myles B. Harmon, Acting Director

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