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NY I87298




October 21, 2002

CLA2-RR:NC:3:353 I87298

CATEGORY: CLASSIFICATION

Mr. Jarrod Mills
Standard Textile
One Knollcrest Drive
P.O. Box 371805
Cincinnati, OH 45222-1805

RE: Classification and country of origin determination for woven jackets and a jacket liner; Duty-Free treatment for products of the West Bank, Gaza Strip, or a Qualifying Industrial Zone; General Note 3(a)(v); 19 C.F.R. §102.21(c)(2); T.D. 98-62; Revocation of ruling NY I84968.

Dear Mr. Mills:

This letter is to inform you that Customs has reconsidered New York Ruling NY I84968, dated September 10, 2002, issued to you concerning the classification, country of origin and eligibility for duty-free treatment for products of the West Bank, Gaza Strip, or a Qualifying Industrial Zone, of jackets and a jacket liner. After review of NY I84968, it has been determined that the country of origin of the jackets and jacket liner as country of origin Israel no longer reflects the view of the Customs Service and is revoked in accordance with section 177.9(d) of the Customs Regulations (19 C.F.R. §177.9(d)). Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. §1625), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub.L. 103-182, 107 Stat. 2057, 2186 (1993), publication is not required when the revocation is issued within 60 days of the issuance of the ruling. The following represents our position.

FACTS:

The subject merchandise consists of Styles 677, 970, 971 and 974 unisex work jackets and Style 872 unisex jacket liner. Styles 677, 970 and 971 are constructed of an outer shell of woven 65% polyester, 35% cotton fabric with a 100% nylon liner. The filler is 100% polyurethane with 100% polypropylene backing. All feature a zipper closure. Style 677 features a 100% polyester rib knit fabric cuff, waistband and collar, two side slash pockets at the waist and a triceps pencil pocket. Style 970 is hip-length and features cuffs with buttons, two side slash pockets at the waist and a triceps pencil pocket. Style 971 is Eisenhower-style and features cuffs with buttons, an adjustable button waist and two patch pockets with button flaps at the chest. Style 974 is constructed of an outer shell of woven 65% polyester, 35% cotton fabric and is unlined. It features a 100% polyester rib knit fabric cuff, waistband and collar, two side slash pockets at the waist and a triceps pencil pocket. Style 872 is a liner made to zip into the shell of jacket Style 974 and is constructed of a woven 100% nylon shell with 100% polyurethane filler and a 100% polypropylene backing. You state that the liner will be imported separately and sold separately from the Style 974 jacket.

The manufacturing operations for the jackets and liner are as follows: the fabric is woven in China, then shipped to Israel, where it is cut into jacket and liner components. The components are then shipped to Jordan (QIZ) for assembly into jackets or liner, finishing operations are performed (including attaching the zipper).

ISSUE:

What are the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for Styles 677, 970, 971 and 974 unisex work jackets will be 6202.93.5011, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “Women's or girls' overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6204: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers: Other: Other: Other: Other, Women’s.” The general rate of duty will be 28.1% ad valorem. The textile category designation is 635.

The applicable subheading for the Style 872 unisex jacket liner will be 6217.10.9530, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “Other made up clothing accessories; parts of garments or of clothing accessories, other than those of heading 6212: Accessories: Other: Other, Of man-made fibers.” The general rate of duty will be 14.8% ad valorem. The textile category designation is 659.

The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CUSTOMS.GOV. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, except for the purpose of determining whether a good is a product of Israel (see 19 C.F.R. 102.21(a)), the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Customs exclusively applies the textile rules of origin set forth in paragraphs (c )(1) through (5) of 19 C.F.R. 102.21 for determining the country of origin of textiles and apparel articles produced in a QIZ, even if processing occurs in Israel either before or after the processing is performed in the QIZ, because Treasury Decision 98-62, published in the Federal Register on June 26, 1998, 63 FR 34960, determined that pursuant to the agreement between the Governments of Israel and Jordan, and by mutual consent of the U.S. and Israel, Customs will exclusively apply the textile and apparel rules of origin set forth in 19 C.F.R. §102.21 in determining the country of origin of a textile or apparel product processed in a QIZ.

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, paragraph (c)(1) of Section 102.21 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 of the foreign materials 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:”

Paragraph (e) in pertinent part states that “The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:”

HTSUS Tariff shift and/or other requirements

(1) If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

(1) If the good consists of two or more component parts, a change to an assembled good of heading 6215 through 6217 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

The jackets and jacket liner, consisting of two or more component parts, will be wholly assembled in a single country, that is, Jordan. Therefore, as per the terms of the tariff shift requirement, country of origin is conferred in Jordan.

UNITED STATES-ISRAEL FREE TRADE AGREEMENT:

Pursuant to the authority conferred by section 9 of the U.S.-Israel Free Trade Area Implementation Act of 1985 (19 U.S.C. §2112 note), the President issued Proclamation No. 6955 dated November 13, 1996 (published in the Federal Register on November 18, 1996 (61 Fed. Reg. 58761)), which modified the Harmonized Tariff Schedule of the United States (HTSUS) (by creating a new General Note 3(a)(v)) to provide duty-free treatment to articles which are the product of the West Bank, Gaza Strip or a qualifying industrial zone, provided certain requirements are met. Such treatment was effective for products of the West Bank, Gaza Strip or a qualifying industrial zone entered or withdrawn from warehouse for consumption on or after November 21, 1996.

Under General Note 3(a)(v), HTSUS, articles the products of the West Bank, Gaza Strip or a qualifying industrial zone which are imported directly to the U.S. from the West Bank, Gaza Strip, a qualifying industrial zone or Israel qualify for duty-free treatment, provided the sum of 1) the cost or value of materials produced in the West Bank, Gaza Strip, a qualifying industrial zone or Israel, plus 2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a qualifying industrial zone or Israel, is not less than 35% of the appraised value of such articles when imported into the U.S. An article is considered to be a product of the West Bank, Gaza Strip or a qualifying industrial zone if it is either wholly the growth, product or manufacture of one of those areas, or a new and different article of commerce that has been grown, produced or manufactured in one of those areas.

Because you indicate that the jackets and jacket liner will be wholly assembled in the West Bank, Gaza Strip or a qualifying industrial zone, specifically, the Jordanian portion of the Irbid QIZ, under the applicable rules of origin for textiles, they would be considered a product of the West Bank, Gaza Strip or a qualifying industrial zone, specifically Jordan.

With respect to the requirement that the articles be imported directly, General Note 3(a) (v)(B) (1) provides that:

Articles are “imported directly” for purposes of this paragraph if--
they are shipped directly from West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States with out passing through the territory of any intermediate country

Based upon the facts presented, this office is unable to state definitively that the garments will satisfy this requirement. Whether the requirement is satisfied can only be ascertained at the time of entry into the United States.

In regard to 35% value content requirement, Customs would apply the double substantial transformation test to determine whether the cost or value of materials imported into the West Bank or Gaza Strip may be counted toward the 35% requirement.

This office is unable to state definitively that the garments will or will not satisfy the 35% value content requirement. Whether the requirement is satisfied can only be ascertained when the “appraised value” of the garments is determined at the time of entry into the United States.

HOLDING

Based on the information provided, the jackets and jacket liner will be considered a product of the West Bank or Gaza Strip or qualifying industrial zone, and will be eligible for preferential duty treatment under General Note 3(a)(v), HTSUS, assuming that they are imported directly from the West Bank, Gaza Strip, or Israel, and the 35 percent value content requirement is satisfied. Again, whether the “imported directly” or 35% value content requirement will be met must await actual entry of the merchandise.

The country of origin of the jackets and jacket liner is Jordan. Based upon international textile trade agreements products of Jordan currently are not subject to quota and the requirement of a visa.

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 section 19 C.F.R. §177.9(b)(1). This sections states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 C.F.R. §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 of country of origin. 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 C.F.R. §177.2.

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 Kenneth Reidlinger at 646-733-3053.

Sincerely,

Robert B. Swierupski
Director,

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