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HQ 966343




May 13, 2003

CLA-2 RR:CR:TE 966343 ASM

CATEGORY: CLASSIFICATION

TARIFF NO.: 9821.11.25

Matt Reynolds
Chief Operating Officer
Indigenous Designs Corporation
975 Corporate Center Parkway, #110
Santa Rosa, CA 95407

RE: Andean Trade Promotion and Drug Eradication Act; Woman’s Knitted Pullover; Assembly of Components; Subheading 9821.11.25

Dear Mr. Reynolds:

This is in response to your letter of February 12, 2003, requesting a binding ruling on the eligibility of a knit pullover for preferential treatment under the Andean Trade Promotion and Drug Eradication Act (“ATPDEA”). A sample was submitted.

FACTS:

The item under consideration is a green knit woman’s pullover sweater, identified by the importer as style #103-PD 38 (Organic Cotton Roll Neck – GCD3 Herb). The garment is comprised of 100 percent organic cotton and there are nine or fewer stitches per two centimeters, measured in the direction in which the stitches were formed. The garment features long sleeves and a rolled bottom, cuffs, and neckline. The garment will be made in Peru of 100 percent organic cotton fibers that are grown, spun, dyed, and knit in Peru. The sweater is knit by a hand run knitting machine in the following components: front panel; back panel; right arm, left arm. The components are then linked together to complete the sweater. All of the processes described are performed in Peru. The finished garment will be imported directly into the United States from Peru.

ISSUE:

Whether the subject knit pullover is eligible for preferential treatment under the ATPDEA?

LAW AND ANALYSIS:

The Trade and Development Act of 2002 (“the Act”) was signed into law on August 6, 2002. Title XXXI of the Act concerns the renewal and expansion of the Andean Trade Preference Act (ATPA) and is entitled the “Andean Trade Promotion and Drug Eradication Act” (ATPDEA). The ATPDEA provides for the entry of specific textile and apparel articles free of duty and free of any quantitative restrictions, as well as other benefits to non-textile products. Presidential Proclamation 7616, dated October 31, 2002 and published in the Federal Register (67 FR 67283) on November 5, 2002, implemented the ATPDEA by designating the eligible beneficiary countries and amending Chapter 98, Harmonized Tariff Schedule of the United States Annotated (HTSUSA) (including the creation of new subchapter XXI) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the ATPDEA.

Section 3103 of the Act (Pub. L. 107-210) outlines the treatment of certain textile and apparel articles under the ATPDEA. Wearing apparel articles that meet the specific production requirements set forth in the ATPDEA may enter into the customs territory of the United States free of duty and free of any quantitative restrictions, limitations, or consultation levels. Peru was designated as a beneficiary country under the ATPDEA by Presidential Proclamation 7616.

Garments meeting the description in subheading 9821.11.25, HTSUSA, are eligible for preferential treatment under the ATPDEA. This subheading provides as follows:

Articles imported from a designated ATPDEA beneficiary country enumerated in U.S. note 1(a) to this subchapter: Apparel articles sewn or otherwise assembled in one or more such countries from fabrics or from fabric components formed or from components knit-to-shape in one or more such countries, from yarns wholly formed in the United States or in one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 of the tariff schedule and are formed in one or more such countries); the foregoing apparel articles imported under the terms of U.S. note 3(d) and U.S. note 3(e) to this subchapter.

Interim regulations applicable to articles eligible for preferential treatment under the ATPDEA were published in the Federal Register, on Tuesday, March 25, 2003, Vol. 68, No. 57. Section 10.242 of the interim Customs regulations (19 CFR §10.242) defines “Assembled or sewn or otherwise assembled in one or more ATPDEA beneficiary countries” as follows:

“Assembled” and “sewn or otherwise assembled” when used in the context of production of an apparel or other textile article in one or more ATPDEA beneficiary countries has reference to a joining together of two or more components that occurred in one or more ATPDEA beneficiary countries, whether or not a prior joining operation was performed on the article or any of its components in the United States.

United States Note 1 to subchapter XXI, designates Peru as a beneficiary country under the ATPDEA. U.S. Note 3(d) to subchapter XXI, Chapter 98, HTSUSA, provides that the duty-free treatment afforded to goods under subheading 9821.11.25, HTSUSA, is limited to specific aggregate quantities for certain time periods as set forth therein. In addition, U.S. Note 3(e) provides the following:

For purposes of subheading 9821.11.25, duty-free treatment shall be afforded to goods imported under such subheading whether or not the apparel articles are also made from any of the fabrics, fabric components formed or components knit-to-shape described in subheadings 9821.11.01 through 9821.11.10, inclusive, unless such articles are made exclusively from any of the fabrics, fabric components formed or components knit-to-shape described in such subheadings.

Inasmuch as the subject garment is entirely processed in Peru of components knit and assembled in Peru of 100 percent organic cotton Peruvian yarn, the article meets the requirements set forth in the aforementioned interim regulations and the description contained at subheading 9821.11.25, HTSUSA, for preferential treatment under the ATPDEA.

In view of the foregoing, the subject garment is eligible for duty free treatment under subheading 9821.11.25, HTSUSA.

HOLDING:

Provided the subject garment is manufactured as described above, it is eligible for duty free treatment under the provisions of the ATPDEA, provided the apparel articles are imported directly into the customs territory of the U.S. from an ATPDEA beneficiary country and the apparel article meets the remaining requirements of the relevant ATPDEA provisions.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Myles B. Harmon, Director

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