United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2003 HQ Rulings > HQ 966496 - HQ 966648 > HQ 966641

Previous Ruling Next Ruling
HQ 966641




September 9, 2003

CLA-2 RR:CR:TE 966641 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.09

Ms. Dana L. Bounds
UPS Supply Chain Solutions
1600 Genessee, Suite 450
Kansas City, MO 64102

RE: African Growth and Opportunity Act; Knit Polo Shirt; Lesser Developed Country

Dear Ms. Bounds:

This is in response to your letter of June 4, 2003, requesting a binding ruling on the eligibility of apparel for preferential treatment under the African Growth and Opportunity Act ("AGOA"). A sample was submitted.

FACTS:

The submitted sample, identified as style no. 6393, is a men’s knit polo shirt of 100% cotton, pique knit fabric that measures 11 stitches per linear centimeter counted in the horizontal direction and 20 stitches per linear centimeter counted in the vertical direction. The shirt has a rib knit spread collar; a partial front opening with three button closures; short sleeves with rib knit cuffs; and a straight, hemmed bottom with side slits. The side slits are self-finished and the shirt has self-fabric neck binding.

You state that the yarn is from South Africa or Zambia, the fabric is knit in Mauritius, and the collar and cuffs are knit to shape in Mauritius. You further state that the cutting of the fabric and assembly of the garment will take place in Lesotho. The labels are sourced in China, the buttons from Taiwan and the thread from Malaysia.

ISSUE:

Whether the subject apparel article is eligible for preferential treatment under the AGOA?

LAW AND ANALYSIS:

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 Africa 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. South Africa and Mauritius were designated beneficiary countries by Presidential Proclamation 7350, published in the Federal Register on October 4, 2000, 65 Fed. Reg. 59321. Lesotho and Zambia were designated beneficiary countries and lesser developed beneficiary sub-Saharan African countries by Presidential Proclamation 7350 published in the Federal Register on October 4, 2000, 65 Fed. Reg. 59321. Mauritius was determined to be eligible for textile benefits under the AGOA by the USTR effective January 19, 2001, 66 Fed. Reg. 8440, dated January 31, 2001. Lesotho was determined to be eligible for textile benefits under the AGOA by the USTR effective April 23, 2001, 66 Fed. Reg. 21192, dated April 27, 2001. South Africa was determined to be eligible for textile benefits under the AGOA by the USTR effective March 7, 2001, 66 Fed. Reg. 14425, dated March 12, 2001. Zambia was determined to be eligible for textile benefits under the AGOA by the USTR effective December 17, 2001, 66 Fed. Reg. 65773, dated December 20, 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).

You have stated that it is your belief that the garment qualifies for duty free treatment under subheading 9819.11.12, HTSUS. Apparel articles wholly assembled in a sub-Saharan African lesser developed beneficiary country (LDC) and directly imported into the U.S. are entitled to duty free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, which provides as follows:

Apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, regardless of the country of origin of the fabric or the yarn used to make such articles, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive.

U.S. Note 2(d) lists Lesotho as qualifying for designation as a LDC. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12, HTSUS.

This provision of the AGOA allows foreign yarn or fabric to be used in the manufacture of apparel articles in LDC’s. It does not extend duty-free treatment to foreign formed textile components (i.e. cut to shape or knit to shape collars and cuffs). See HQ 965871, dated September 25, 2002 and HQ 562612, dated April 30, 2003. We presume for purposes of this ruling that the cost of the buttons, labels and thread will not exceed 25% of the cost of the components of the assembled article. Inasmuch as the shirt incorporates knit to shape components, i.e, the collar and cuffs, from a non-LDC the shirt does not qualify for duty free status under subheading 9819.11.12, HTSUS.

However, garments meeting the description in subheading 9819.11.09, HTSUS, are eligible for preferential treatment under the AGOA. It provides as follows:

Apparel articles wholly assembled in one or more such countries from fabric wholly formed in one or more such countries from yarn originating in either the United States or one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 and are wholly formed and cut in one or more such countries), or from components knit-to-shape in one or more such countries from yarns originating either in the United States or in one or more such countries, or apparel articles wholly formed on seamless knitting machines in such a country from yarns originating either in the United States or one or more such countries, subject to the provisions of U.S. note 2 to this subchapter.

The definition of "Knit-to-shape components" is set forth in 19 CFR 10.212 which provides:

"Knit-to-shape," when used with reference to textile components, means components that are knitted or crocheted from a yarn directly to a specific shape containing a self-start edge. Minor cutting or trimming will not affect the determination of whether a component is “knit to shape.” In this case, the yarn is formed in South Africa or Zambia, the collar and cuffs are knit to shape in Mauritius, the fabric is cut and the apparel is wholly assembled in Lesotho. Accordingly, the garments would be entitled to be classified in subheading 9819.11.09, HTSUS, subject to the quantitative limits set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS. The garments are eligible for preferential treatment under the AGOA.

HOLDING:

Based on the information provided, the men’s shirts, manufactured as described in this case, are eligible for duty free treatment under subheading 9819.11.09, HTSUS, provided they are imported directly into the customs territory of the U.S. from a beneficiary country.

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
Commercial Rulings Division

Previous Ruling Next Ruling

See also: