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HQ 966086




February 26, 2003

CLA-2 RR:CR:TE 966086 jsj

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.09

Mrs. Liesl Fletcher
Jambo Kids Clothing
P.O. Box 28737
DANHOF 9310
Free State
Republic of South Africa

RE: African Growth and Opportunity Act; “Garments for girls (3 to 6 years) – Knit Fabric”; Apparel Assembled From Regional Fabric; 19 U.S.C. 3721 (b)(3); Chapter 98, Subchapter XIX, HTSUSA; Subheading 9819.11.09, HTSUSA; 19 C.F.R. 10.211 et seq.

Dear Mrs. Fletcher:

The purpose of this correspondence is to respond to your request dated November 26, 2002. The correspondence in issue requested, on the behalf of Jambo Kids Clothing, a binding ruling addressing the eligibility of merchandise described as “Garments for girls (3 to 6 years) – Knit Fabric” to receive preferential tariff and quota treatment pursuant to the African Growth and Opportunity Act (AGOA).

This ruling is being issued subsequent to the following: (1) A review of your submission dated November 26, 2002, which included undated and un-addressed correspondence from your company, sketches of the swing tops, sweatpants, leggings, dresses and hats, correspondence directed to you from your yarn and fabric supplier dated 1/10/02, and correspondence directed to you from the South African Revenue Service dated 2002-11-08; and (2) Electronic mail correspondence between you and a member of my staff dated January17 and 24, 2003.

FACTS

The articles in issue, as identified by Jambo Kids Clothing, are “Garments for girls (3 to 6 years) – Knit Fabric.” The garments include: (1) Swing tops with round necks or hoods; (2) Sweatpants with elastic at the waist; (3) Leggings with elastic at the waist; (4) A-style dresses and gathered skirt dresses; and (5) Hats.

The garments are made of 200 gm brushed fleece 100 percent cotton knit fabric. The yarn is spun and knitted into fabric in South Africa. The fabric is screen printed, cut and assembled into garments in South Africa. The garments, subsequent to assembly, are over-dyed in South Africa.

The sweatpants and leggings will have “elastic” at the waistband. The “elastic” is an elastic fabric composed of both yarn and rubber. The yarn is spun and the rubber is made in South Africa. The completed elastic fabric used in the waistband is formed in South Africa.

ISSUE

Are the swing tops, sweatpants, leggings, dresses and hats made of 100 percent cotton spun into yarn, knitted into fabric, printed, cut, assembled and over-dyed in South Africa eligible for preferential tariff and quota treatment pursuant to the African Growth and Opportunity Act ?

LAW AND ANALYSIS

The United States agency responsible for initially interpreting and applying the Customs laws addressing the importation of goods, including the United States Code, the Code of Federal Regulations and the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), is the U.S. Customs Service.

See 19 U.S.C. 1500 (West 1999) (providing that the Customs Service is responsible for fixing the final appraisement, classification and amount of duty to be paid); See also Joint Explanatory Statement of the Committee of Conference, H.R. Conf. Rep. No. 100-576, at 549 (1988) reprinted in 1988 U.S. Code Cong. and Adm. News 1547, 1582 [hereinafter Joint Explanatory Statement]. The federal law subject to interpretation and application in this ruling letter is the African Growth and Opportunity Act. See 19 U.S.C. 3701 et seq. The AGOA was initially enacted as Title I of the Trade and Development Act of 2000, Pub. L. 106-200, 114 Stat. 251 (May 18, 2000) to promote “increased trade and investment between the United States and sub-Saharan Africa.” 19 U.S.C. 3702 (1). The Act was amended in the Trade Act of 2002, Pub. L. 107-210, 116 Stat. 933 (Aug. 6, 2002).

The AGOA provides for the extension of the Generalized System of Preferences (GSP) duty-free treatment to non-textile articles normally excluded from GSP duty-free treatment and for preferential treatment of certain textile and apparel articles described in the Act. The textile and apparel provisions of the AGOA became effective on October 1, 2000, and remain in effect until September 30, 2008. The Customs Service issued Interim Regulations implementing the AGOA that became effective on October 1, 2001. See 19 C.F.R. 10.211 et seq.; See also T.D. 00-67; 65 Fed. Reg. 59668 (2000).

Preferential treatment of certain textile and apparel articles is available under the AGOA for articles imported directly 19 C.F.R. 10.213 (c) from: (1) A country that has been designated by the President as a “beneficiary sub-Saharan African country;” and (2) That has satisfied the U.S. Trade Representative that it has met the requirements of 19 U.S.C. 3722 (a) and (b), having adopted protections against transshipment. The Republic of South Africa is a designated “beneficiary sub-Saharan African country” and has been declared by the U.S. Trade Representative to have satisfied the requirements of the Act protecting against transshipment. See Presidential Proclamation 7350, 65 Fed. Reg. 59321 (2000); 66 Fed. Reg. 14425 (2001).

Section 3721 (b) of Title 19 provides, in part, that preferential treatment “shall apply only to the following textile and apparel products:

APPAREL ARTICLES FROM REGIONAL FABRIC OR YARNS.-Apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub-Saharan African countries from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries (including fabrics not formed from yarns, if such fabrics are classified under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in one or more beneficiary sub-Saharan African countries), or from components knit-to-shape in one or more beneficiary sub-Saharan African countries from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries, or apparel articles wholly formed on seamless knitting machines in a beneficiary sub-Saharan African country from yarns originating either in the United States or one or more beneficiary sub-Saharan African countries. See also subheading 9819.11.09, HTSUSA.

The Customs Service notes that Chapter 98, Subchapter XIX, U.S. Note 2, HTSUSA, sets forth limitations on the preferential treatment available under this provision of the AGOA.

The instant ruling requires Customs to determine whether the merchandise in issue constitutes apparel articles wholly assembled in South Africa from fabric that was wholly formed in South Africa from yarns that originated in South Africa. Customs notes that although the fabric in issue is knit, the manufacturing process described by Jambo Kids leads Customs to the conclusion that the merchandise is not “knit-to-shape.” See generally 19 C.F.R. 10. 212 (defining “knit-to-shape”).

The articles Jambo Kids intends to import, swing tops, sweatpants, leggings, dresses and hats for girls three to six years of age, must initially meet the definition of “apparel articles.” “Apparel articles” are defined by Customs Regulations as “goods classifiable in Chapters 61 and 62 and headings 6501, 6502, 6503 and 6504 and subheadings 6406.99 and 6505.90 of the HTSUS.” 19 C.F.R. 10.212. The Customs Service will rely on the General Rules of Interpretation, part of the Harmonized Tariff Schedule of the United States, to classify the merchandise, in order to determine whether Jambo Kid’s merchandise meets the definition of “apparel articles.”

General Rule of Interpretation 1 provides, in part, that classification decisions are to be “determined according to the terms of the headings and any relative section or chapter notes.” General Rule of Interpretation 1. General Rule of Interpretation 1 further states that merchandise which cannot be classified in accordance with the dictates of GRI 1 should be classified pursuant to the other General Rules of Interpretation, provided the HTSUSA chapter headings or notes do not require otherwise. According to the Explanatory Notes (EN), the phrase in GRI 1, “provided such headings or notes do not otherwise require,” is intended to “make it quite clear that the terms of the headings and any relative Section or Chapter Notes are paramount.” General Rules for the Interpretation of the Harmonized System, Rule 1, Explanatory Note (V).

The Explanatory Notes constitute the official interpretation of the Harmonized System at the international level. See Joint Explanatory Statement supra note 1, at 549. The Explanatory Notes, although neither legally binding nor dispositive of classification issues, do provide commentary on the scope of each heading of the HTSUS. The EN’s are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989); Lonza, Inc. v. United States, 46 F. 3rd 1098, 1109 (Fed. Cir. 1995).

Commencing classification of the swing tops, sweatpants, leggings, dresses and hats for girls three to six years of age, in accordance with the dictates of GRI 1, the Customs Service examined the headings of the HTSUSA. The sweatpants, leggings and dresses are classifiable in heading 6104, HTSUS, which provides for “[w]omen’s or girls’ suits, ensembles, suit-type jackets, blazers, trousers, bib and brace overalls, breeches, and shorts (other than swimwear), knitted or crocheted.” The swing tops are classifiable in heading 6110, HTSUS, which provides for “[s]weaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted.” Customs, in arriving at the conclusion that the sweatpants, leggings, dresses and swing tops are classifiable as girls’ garments, assumes that the garments meet the requirements of Chapter 61, Note 9. Garments of this chapter designed for left over right closure at the front shall be regarded as men’s or boys’ garments, and those designed for right over left closure at the front as women’s or girls’ garments. These provisions do not apply where the cut of the garment clearly indicates that it is designed for one or the other of the sexes.

Garments which cannot be identified as either men’s or boys’ garments or as women’s or girls’ garments are to be classified in the headings covering women’s or girls’ garments. The hats are classifiable in subheading 6505.90, HTSUS, which provides, in part, for “[h]ats and other headgear, knitted or crocheted[o]ther.” These items, classifiable in Chapter 61 of the HTSUS, and subheading 6505.90, HTSUS, are, therefore, “apparel articles” for the purpose of the AGOA.

The apparel articles subject to this ruling letter are “wholly assembled in” South Africa, from fabric “wholly formed” in South Africa, from yarn that originated in South Africa. “Wholly assembled in,” for the purpose of textile and apparel articles under the AGOA,
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. 19 C.F.R. 10.212.

The fabric is considered as having been “wholly formed” in South Africa because the phrase “wholly formed,” when used with reference to fabric,
means that all of the production processes, starting with polymers, fibers, filaments, textile strips, yarns, twine, cordage, rope, or strips of fabric and ending with a fabric by a weaving, knitting, needling, tufting, felting, entangling or other process, took place in a single country. 19 C.F.R. 10.212.

The yarn is considered as “originating” in South Africa when the country of origin is determined to be South Africa through the application of 19 C.F.R. 102.21. See 19 C.F.R. 10.212. According to correspondence of the yarn supplier attached to Jambo Kid’s submission, “yarn utilized forthe products are manufactured in South Africa.” Customs understands this statement to mean that the cotton fiber is spun into yarn in South Africa. The yarn used in the production of the Jambo Kids garments, therefore, originates in South Africa for Customs purposes, because the cotton fiber spun into cotton yarn meets the tariff shift requirement of 19 C.F.R. 102.21 (e)(1). See 19 C.F.R. 102.21 (c)(2).

The Jambo Kids articles meet the requirements of Customs AGOA implementing regulations and are, therefore, eligible to receive the preferential tariff and quota benefits provided in the African Growth and Opportunity Act.

HOLDING

The sweatpants, leggings, swing tops, dresses and hats are eligible to receive the preferential tariff and quota benefits of the African Growth and Opportunity Act.

They are classified in subheading 9819.11.09, Harmonized Tariff Schedule of the United States Annotated.

They should be entered under Preference Group D and Visa Group 4.

Statistical reporting of the merchandise should be in accordance with Chapter 98, Subchapter XIX, U.S. Statistical Note 1. Chapter 98, Subchapter XIX, U.S. Statistical Note 1 states: “For statistical reporting of merchandise under the subheadings of this chapter: (a) Report the 8-digit number (or 10-digit number, if any) found in this subchapter in addition to the 10-digit number appearing in chapters 1-97 which would be applicable but for the provisions of this subchapter; and (b) The quantities reported should be in the units provided in chapters 1-97.”

The Column 1 Special Rate of Duty is FREE.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division

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