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HQ 966509





August 27, 2002

CLA-2 RR:CR:TE 966509 BAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.21

Dana Mobley
Customs Analyst
J.C. Penney Purchasing Corp.
P.O. Box 10001
Dallas, Texas 75301

RE: African Growth and Opportunity Act, subheading 9819.11.21, HTSUSA; Country of Origin; Women’s Corduroy Pants and Belt; subheading 6204.62.4005, HTSUSA

Dear Ms. Mobley:

The purpose of this correspondence is to respond to your letter dated May 7, 2003 on behalf of JCPenney Purchasing Corporation (JCPenney) requesting a country of origin determination and a determination as to whether or not the garment is eligible for duty free treatment under the African Growth and Opportunity Act (AGOA).

FACTS:

The article at issue is a pair of women’s corduroy pants with a textile belt. The corduroy fabric, made in China, is 97 percent cotton, three percent spandex. The 100 percent polyester webbing belt and hanger (not submitted) are also made in China. The fabric and belt are sent to Mauritius. In Mauritius, the fabric is cut and assembled into pants using thread from Mauritius. The belt is threaded through the belt loops, then the garments are packed.

The retail lot number for the garment is 664-8317. You provided a sample of the pants and belt to assist us in our determination. The garment tag indicates that the brand is “The Original Arizona Jean Company” and the color is “cardinal red.”

ISSUE:

What is the proper classification for the women’s corduroy belt and pants set?

What is the country of origin?

Are the women’s corduroy pants with matching belt eligible for preferential tariff and quota treatment under the African Growth and Opportunity Act?

LAW AND ANALYSIS:

CLASSIFICATION:

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods 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 GRIs may then be applied.

For classification purposes, the subject pants and belt are considered a "composite good" in which the pants impart the essential character. See Headquarters Ruling Letter (HRL) 960033, dated January 30, 1997, wherein a vest and belt were classified as a composite good with the vest imparting the essential character; HRL 960047, dated February 27, 1997, wherein a dress, self-fabric belt and shawl were considered to be a composite good; HRL 959342, dated July 18, 1996, wherein a women’s dress and self-fabric belt were classified as a composite good with the dress imparting the essential character; HRL 954073, dated September 23, 1993, wherein Customs classified a dress and textile belt, which were color coordinated and constructed of the same fabric, as a composite good, with the dress imparting the essential character to the item; HRL 956540, dated September 7, 1994, wherein Customs classified women's shorts with accompanying belts as composite goods.

Accordingly, the pants and belt are properly classified in subheading 6204.62.4005, HTSUSA, which provides for “Women’s or girls’ suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear): Trousers, bib and brace overalls, breeches and shorts: Of cotton: Other: Other: Other: Trousers and breeches: Women’s: Corduroy.”

COUNTRY OF ORIGIN:

Section 334 of the Uruguay Round Agreements (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Section 102.21(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 was not wholly obtained or produced in a single country, section (c)(1) is not applicable.

Section 102.21(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 foreign material 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."

Section 102.21(e)(1) states that, "The following rules will apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:"

6201-6208 (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.

Section 102.21(b)(6) defines “wholly assembled” as:

The term "wholly assembled" when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as "wholly assembled" in a single country, territory, or insular possession.

As discussed above, for classification purposes, the subject pants and belt are considered a "composite good" in which the pants impart the essential character. As such, the country of origin of the pants will determine the origin of the composite good and the country of origin of the accompanying belt is not determined separately. Accordingly as per the terms of Section 102.21 (c)(2) and section 102.21 (e), as the subject pants are composed of two or more component parts and are wholly assembled in a single country, that is, Mauritius, the country of origin of the subject pants and belt is Mauritius. See HQ 959342, dated July 18, 1996, wherein Customs held that a dress and self-fabric belt were considered a composite good and the country of origin of the dress was determined to be the country of origin for the composite good. See also HQ 959341, dated July 3, 1996.

The African Growth and Opportunity Act (AGOA):

The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty- and quota-free benefits extended to textile and apparel articles under the Act. Mauritius was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on March 12, 2002, 66 Fed. Reg. 14425. It was determined to be eligible for textile benefits under the AGOA by the USTR effective March 7, 2001. See, 66 Fed. Reg. 14425, dated March 12, 2001.

The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XIX, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at §§ 10.211 through 10.217 of the Customs Regulations (19 CFR 10.211 through 10.217).

Subheading 9819.11.21, HTSUS, is the provision commonly referred to as the "NAFTA short supply" provision. It was created for the entry of articles eligible for preferential treatment under section 112(b)(5)(A) (see Presidential Proclamation 7350, dated October 2, 2000, published in the Federal Register on October 4, 2000

(65 Fed. Reg. 59327)). Subheading 9819.11.21, HTSUS, provides for the duty-free entry of:

Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more [beneficiary] countries from fabrics or yarn that is not formed in the United States or a beneficiary country, provided that such apparel articles of such fabrics or yarn would be considered an originating good under the terms of general note 12(t) to the tariff schedule without regard to the source of the fabric or yarn if such apparel article had been imported from the territory of Canada or the territory of Mexico directly into the customs territory of the United States

Accordingly, if an apparel article is "of" a fabric that is considered to be a "short supply" fabric under GN12(t), it is considered to be an originating good providing it meets the other applicable requirements of GN 12(t).

We note that there is no definitive list of "short supply" fabrics or yarns for purposes of the NAFTA. The determination of short supply fabrics or yarns is based upon the various provisions of NAFTA and whether, under NAFTA, for the particular apparel article at issue, certain fabrics or yarns may be sourced from outside the NAFTA parties for use in the production of an "originating" good. If sourcing of certain fabrics or yarns outside the NAFTA parties is allowed, then those fabrics or yarns are deemed to be in "short supply."

The fabric from which the pants are made is formed in China. Thus, in order to determine whether the pants are eligible for preferential treatment under the "short supply" provision of the AGOA, we must determine whether the non-originating fabric used in the production of the pants is permitted under General Note 12(t), HTSUSA.

General Note 12 (t), Chapter 62, Chapter Rule 2, HTSUSA, provides that:

Apparel goods of this chapter shall be considered to originate if they are both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following:

(B) Corduroy fabrics of subheading 5801.22, containing 85 percent or more by weight of cotton and containing more than 7.5 wales per centimeter;

The corduroy fabric at issue is a fabric of subheading 5801.22, HTSUS, consists of 97 percent cotton and contains 8 wales per centimeter. Accordingly, the fabric used to produce the pants would be considered a short supply fabric and the pants are eligible for preferential treatment under the AGOA.

General Note 12 (t), Chapter 62, Chapter Rule 3, HTSUSA, provides in pertinent part:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good.

Accordingly, since the apparel article at issue is a composite good consisting of the pants and a belt, and as the pants are the component of the composite good that determines the tariff classification of the good, the pants would also be the component that determines eligibility for AGOA preferential treatment under subheading 9819.11.21, HTSUS. The polyester webbing belt, then, would be eligible for preferential treatment under AGOA by virtue of the pants’ eligibility.

HOLDING:

The women’s corduroy pants composed of 97 percent cotton and three percent spandex and the polyester webbing belt are eligible for preferential treatment under the AGOA (subheading 9819.11.21, HTSUS). The country of origin for the pants and belt is Mauritius.

Statistical reporting of the merchandise should be in accordance with Chapter 98, Subchapter XIX, U.S. Statistical Note 1 which provides that for merchandise under the subheadings of the subchapter, the 8 digit number (or 10 digit number, if any) should be reported in addition to the 10 digit number appearing in chapters 1-97 which would be applicable for the provisions of the subchapter and that the quantities reported should be in the units provided in chapters 1-97.

The Column 1 Special Rate of Duty is FREE.

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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