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HQ 966427




July 14, 2003

CLA-2 RR:CR:TE 966427 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 9821.11.25

Mr. Scott Steeno
That Sweater Place
2260 Maddy Court
Green Bay, WI 54303

RE: Andean Trade Promotion and Drug Eradication Act; Hand-knit Apparel; Subheading 9821.11.16, HTSUSA; Subheading 9821.11.25, HTSUSA; Assembled or Sewn or Otherwise Assembled in One or More ATPDEA Beneficiary Countries

Dear Mr. Steeno:

This is in response to your letter dated March 24, 2003, requesting a binding ruling on the classification and eligibility of hand-knit sweaters, mittens and gloves for preferential treatment under the Andean Trade Promotion Drug Eradication Act (“ATPDEA”). You submitted samples of each article to aid us in our determination. The samples will be returned to you per your request.

FACTS:

The items under consideration are three sweaters, a pair of mittens and a pair of gloves. No style numbers have been furnished. We have designated the samples as “Styles A-E”, respectively, for ease of reference purposes.

The first sweater, “Style A”, is a women’s hand-knit, 100% wool, pullover sweater with long sleeves and a turtleneck. The allover 3x1 rib knit fabric comprising the sweater has nine or fewer stitches per two centimeters, measured in the direction in which the stitches were formed.

The second sweater, “Style B”, is a women’s hand-knit cardigan style sweater, made of 50% cotton, 50% wool with long sleeves and a johnny collar. It has a full frontal opening with a zipper closure and side pockets at the waist. The knit fabric has nine or fewer stitches per two centimeters, measured in the direction in which the stitches were formed.

The third sweater, “Style C”, is a women’s hand-knit cardigan sweater made of 100% cotton with long sleeves, a rib knit bottom, slanted pockets at the waist and a full frontal opening with six buttoned closures. Style C has nine or fewer stitches per two centimeters, measured in the direction in which the stitches were formed.

“Style D” is a pair of 100% wool hand-knit mittens and “Style E” is a pair of hand-knit 50% wool, 50% cotton gloves.

The articles are hand-knit in Ecuador from yarns wholly formed in Ecuador. All of the samples contain a brand label which indicates the country of origin of the garment, and/or sizing and care instructions. The labels are also made in Ecuador from Ecuadorian yarns. The labels are sewn onto the garment in Ecuador with threads originating in Ecuador.

ISSUE:

Whether the hand-knit articles are eligible for preferential treatment under the ATPDEA in 9821.11.16, HTSUSA.

LAW AND ANALYSIS:

The Andean Trade Promotion and Drug Eradication Act (ATPDEA) provides certain specified trade benefits for Andean countries. These benefits include duty-free treatment to specified non-textile articles previously ineligible for preferential treatment under the Andean Trade Preference Act (ATPA), duty- and quota-free treatment of certain imports of tuna, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 3103 of the ATPDEA (codified at 19 U.S.C. 3203(b)(3)). Beneficiary countries are designated by the President of the United States after having met the eligibility requirements of the ATPDEA. Presidential Proclamation 7616 of October 21, 2002, published in the Federal Register (67 Fed. Reg. 67284), proclaimed necessary changes to the Harmonized Tariff Schedule of the United States (HTSUS) to implement the ATPDEA and designated Bolivia, Colombia, Ecuador and Peru as ATPDEA beneficiary countries which had met the requirements of the ATPDEA relating to the implementation of certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products.

The provisions implementing the textile provisions of the ATPDEA in the HTSUS are contained, for the most part, in subchapter XXI, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the ATPDEA may be found at §§ 10.241 through 10.248 of the Customs Regulations (19 CFR 10.241 through 10.248).

As used in the implementing textile provisions of the ATPDEA, articles eligible for preferential treatment must be either textiles or apparel. Customs regulation 19 C.F.R. 10.242 defines apparel articles as, “goods classifiable in Chapters 61 and 62 and headings 6501, 6502, 6503, and 6504 and subheadings 6406.99.15 and 6505.90 of the HTSUS.”

Thus, the articles at issue herein must be classifiable in one of the aforementioned headings or subheadings to warrant further consideration into their eligibility under the ATPDEA.

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings.

Based on the information you have provided us and the samples submitted for our consideration, Style A is classified in subheading 6110.11.0030, HTSUS, which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of wool or fine animal hair: of wool: sweaters: women’s.

Styles B and C are classified in subheading 6110.20.2020, HTSUS, which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of cotton: other: other: sweaters: women’s.

Style D is classified in subheading 6116.91.0000, HTSUS, which provides for gloves, mittens and mitts, knitted or crocheted: other: of wool or fine animal hair.

Style E is classified in subheading 6116.92.8800, HTSUS, which provides for gloves, mittens and mitts, knitted or crocheted: other: of cotton: other: other: without fourchettes.

Articles meeting the description in subheading 9821.11.16, HTSUS, are eligible for preferential treatment under the ATPDEA. This subheading provides as follows:

Handloomed, handmade or folklore textile and apparel goods, under the terms of U.S. note 3(b) to this subchapter.

U.S. note 3(b) to subchapter XXI, Chapter 98, HTSUS, reads as follows:

For purposes of subheading 9821.11.16, goods entered under this provision must be certified, by a competent authority of a designated ATPDEA beneficiary country enumerated in U.S. Note 1 to this subchapter, as eligible products of such country, in accordance with requirements established by the appropriate U.S. government authority.

Moreover, the ATPDEA legislation mandates the President consult with representatives of the ATPDEA beneficiary countries concerned for the purpose of identifying particular textile and apparel goods that are mutually agreed upon as being handloomed, handmade or folklore goods. See 19 U.S.C. §3203(b)(3)(C).

At this time, there is no bilateral agreement in place between Ecuador and the United States concerning handloomed, handmade or folklore articles. Thus, the garments are not eligible for duty free treatment under subheading 9821.11.16, HTSUS.

Although the articles do not qualify for duty-free treatment under 9821.11.16, HTSUS, they are eligible for duty-free treatment under subheading 9821.11.25, HTSUS. That provision requires the sewing or assembly of fabrics, fabric components or components knit-to-shape. Subheading 9821.11.25, HTSUS, reads:

Apparel articles sewn or otherwise assembled in one or more such countries from fabrics or from fabric components formed or form 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.

U.S. note 3(d) to subchapter XXI, Chapter 98, HTSUS, provides that the duty-free treatment afforded to goods under subheading 9821.11.25 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.

The term “wholly formed yarns” is defined in the regulations as follows: “Wholly formed,” when used with reference to yarns, means that all of the production processes, starting with the extrusion of filament, strip, film, or sheet and including drawing to fully orient a filament or slitting a film or sheet into strip, or the spinning of all fibers into yarn, or both, and ending with a yarn or plied yarn, took place in the United States or in one or more ATPDEA beneficiary countries.

Section 10.242 of the interim Customs Regulations (19 CFR §10.242).

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.

Style A appears to be knit to the shape of the final good. Although Style A is a single component, CBP has held that sewing a label onto an item is considered an acceptable assembly operation for purposes of subheading 9802, HTSUS (Articles assembled abroad with components produced in the United States). See Headquarters Ruling Letter (HQ) 555565, dated May 14, 1990 (The operations of sewing beaded weights and a patch or label onto a towel are considered acceptable assembly operations pursuant to 19 CFR 10.16(a)).

Moreover, labels sewn onto sweaters are considered components that are subject to special rules. Section 10.243(c)(1)(i)(A) of the interim Customs Regulations (19 CFR §10.243(c)(1)(i)(A)) states that an article will not be ineligible for preferential treatment because it contains:

Findings and trimmings of foreign origin, if the value of those findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. For purposes of this section “findings and trimmings” include, but are not limited to, sewing thread, hooks and eyes, snaps, buttons, “bow buds,” decorative lace trim, elastic strips, zippers (including zipper tapes), and labels.

In this case, we find that sewing the label onto the article, is an acceptable assembly operation for purposes of subheading 9821.11.25, HTSUS.

Style B appears to be comprised of the body of the sweater which is linked and looped to the sleeve and collar components. Pockets have been knit into the lower front side of the sweater and a full-length frontal zipper is sewn into the sample. It meets the assembly requirements because the body, sleeves, collar and zipper are assembled in Ecuador.

Style C appears to be knit into the shape of the body and full length arms. The sleeves are joined by a separate yarn extending the length of the interior of the arm. A rib knit bottom and cuffs have been linked and looped to the body of the sweater. Plastic buttons with wooden faces extending the length of the sweater are sewn onto the front. It meets the assembly requirements because the sleeves, rib knit cuffs and bottom and buttons are assembled in Ecuador.

Style D is knit in the shape of mittens which are joined by a separate vertical yarn extending from the side of the wrist opposite the thumb and extending partially across the top of the mittens. Closing the seam of the mittens is considered an acceptable assembly operation as the yarn serves as a joining agent by joining the fabric to itself. See L'Eggs Products v. United States, 704 F. Supp. 1127 (CIT 1989).

Style E is knit in the shape of gloves which are joined by a separate yarn extending from the wrist to the top of the thumbs. Closing the seam of the gloves is considered an acceptable assembly operation as the yarn serves as a joining agent by joining the fabric to itself. See L'Eggs Products v. United States, 704 F. Supp. 1127 (CIT 1989).

All of the components in Styles A – E are knit to shape in Ecuador from wholly formed Ecuadorian yarns and are subject to an assembly operation in Ecuador. Thus, the articles satisfy the requirements of subheading 9821.11.25, HTSUS, and are eligible for duty-free treatment under the ATPDEA.

HOLDING:

Style A is classified in subheading 6110.11.0030, HTSUS, which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of wool or fine animal hair: of wool: sweaters: women’s. The duty rate will be 16.1% ad valorem. The textile category code is 446.

Styles B and C are classified in subheading 6110.20.2020, HTSUS, which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of cotton: other: other: sweaters: women’s. The duty rate will be 16.9% ad valorem. The textile category code is 345.

Style D is classified in subheading 6116.91.0000, HTSUS, which provides for gloves, mittens and mitts, knitted or crocheted: other: of wool or fine animal hair. The duty rate will be 31.4 cents per kg. plus 7 percent ad valorem. The textile category code is 431.

Style E is classified in subheading 6116.92.8800, HTSUS, which provides for gloves, mittens and mitts, knitted or crocheted: other: of cotton: other: other: without fourchettes. The rate of duty will be 9.5 percent ad valorem. The textile category code is 331.

Provided the sample articles are manufactured as described above, they are eligible for duty free treatment under subheading 9821.11.25, HTSUS, provided they are imported directly into the Customs territory of the U.S. from an ATPDEA beneficiary country and they meet 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 and Border Protection officer handling the transaction.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division

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