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NY H87557




February 25, 2002

CLA-2-61:RR:NC:TA:359:H87557

CATEGORY: CLASSIFICATION

TARIFF NO.: 6110.20.2020, 6110.20.2075

Ms. Karanda Ho
L&K Knitters (Canada), Inc.
245 West Beaver Creek Road, Unit 1
Richmond Hill, Ontario, Canada L4B 1L1

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of three styles of wearing apparel from Canada; Article 509

Dear Ms. Ho:

This ruling replaces our previous ruling H86007 which was issued to you on December 21, 2001. In your letter dated January 8, 2002, and in a subsequent letter dated January 16, 2002, you propose some changes to the production process under which we based our previous ruling. Please see the remainder of this ruling for our comments on the proposed changes.

In your letter dated November 9, 2001, you requested a ruling on the status of three styles of women’s knitwear from Canada under the NAFTA.

You submitted five samples, three of which are for wear by women while two are for wear by men. We have transferred your menswear samples to another National Import Specialist who will respond to you directly concerning those items. This ruling concerns the three samples of women’s apparel. These samples were submitted and returned as part of the original ruling.

Style W-303 is a woman’s knitted cardigan sweater which has long sleeves, a turtle neck and a full-front opening with six button closures. The 1x1 rib knit fabric of the sweater has less than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The fiber content is 100% cotton. The sweater extends from the wearer’s neck and shoulders to below her waist.

Style W-307 is a woman’s knitted pullover sweater which has a crew neck, long sleeves with rib knit ends and a pronounced rib knit waistband. The cable and the rib knit fabric of the sweater has nine or fewer stitches per two centimeters, measured in the direction in which the stitches were formed. The fiber content is 100% cotton. The sweater extends from the wearer’s neck and shoulders to below her waist.

Style W-312 is a woman’s knitted pullover with long sleeves and a v-shaped neckline. The 1x1 rib knit fabric of the pullover has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The pullover extends from the neck and shoulders of the wearer to below her waist. The fiber content is 100% cotton.

The applicable tariff provision for the two women’s sweaters, Styles W-303 and W-307 will be 6110.20.2020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Sweaters ---and similar articles, knitted or crocheted: of cotton: other: other: sweaters: women’s. The general rate of duty will be 17.3% ad valorem.

The applicable tariff provision for the woman’s pullover, Style W-312, will be 6110.20.2075, HTSUSA, which provides for Sweaters, pullovers ---and similar articles, knitted or crocheted: of cotton: other: other: other: women’s. The general rate of duty will be 17.3% ad valorem.

The sweaters fall within textile category designation 345. The pullover falls within 339. Based upon international textile trade agreements products of Canada are neither subject to the restraints of quota nor the requirement of a visa.

You state that the manufacturing process for these three styles is as follows:

Case 1 (letter of January 8th)

- the cotton yarn is spun in the United States; - the front, back and sleeve panels are knit to shape in Canada; - the panels are assembled by looping them into finished garments in China; - the garments are washed, ironed, packed and inspected in China; - the finished garments are shipped to the United States.

Case 2 (letter of January 8th)
the cotton yarn originates in China; the front , back and sleeve panels are knit to shape in Canada; the panels are assembled by looping in Canada; the garments are washed, ironed, packed and inspected in Canada; the finished garments are shipped to the United States.

Case 1 (letter of January 16th)
the cotton yarn is spun in the United States; the front, back and sleeves panels are knit to shape in Canada; the panels are assembled by looping in Canada; the garments are washed, ironed, packed and inspected in China; the finished garments are shipped to the United States.

Case 2 (letter of January 16th)
the yarn originates in China; the front, back and sleeve panels are knit to shape in Canada; the panels are assembled by looping in Canada; the garments are washed, ironed, packed and inspected in China; the finished garments are shipped to the United States.

Case 3 (letter of January 16th)
the yarn is spun in the United States; the front, back and sleeve panels are knit to shape in Canada; the panels are assembled by looping in Canada; the garments are washed, ironed, packed and inspected in China; the finished garments are shipped to the United States.

Since, as you have stated, all of the panels (the sleeves, the back and the front) of each one of the samples are knit to shape in Canada, then the country of origin for each sample is Canada (Section 102.21 (c)(3), Customs Regulations, noted).

In Case 1 and Case 2 (letter of January 8th), and in Case 2 (letter of January 16th) the three samples of women’s knitwear, Styles W-303, W-307 and W-312 do not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the knitted apparel will not undergo the change in tariff classification required by General Note 12(t)/61.35, HTSUSA. Specifically, in Case 1, the samples are not “both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties,” as is required by the General Note. In Case 2 (both letters) the samples fail to qualify because the yarn originates in China.

For the samples constructed under Cases 1 and 3 (letter of January 16th) they do not qualify for preferential treatment under the NAFTA because they undergo further additional operations outside the territories of the NAFTA parties (General Note 12(l) HTSUSA).

We also note Additional U.S. Note 3(a), Section XI, HTSUSA, which provides for a reduced rate of duty (the Tariff Preference Levels – TPL) for apparel goods of Chapters 61 and 62, which are imported from Canada, provided that they are both cut (or knit to shape) and sewn or otherwise assembled in the territory of a NAFTA party from fabric or yarn produced or obtained outside the territory of one of the NAFTA parties. However, if the TPL applies, the goods are subject to the reduced NAFTA rate of duty up to the yearly quantity limit. In Case 1 (letter of January 8th), the TPL does not apply because the good is not “otherwise assembled” in Canada. In Case 2 (letter of January 8th), the TPL applies since the good is knit to shape and is “otherwise assembled” in Canada, as well as imported from Canada. In the remaining three cases (letter of January 16th), the TPL does not apply since the goods are not imported from Canada.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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 646-733-3049.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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