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HQ 966702

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December 11, 2003

CLA-2 RR:CR:TE 966702 RH

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.8044

Ms. Saralee Antrim-Saizan
Customs Administration
Carmichael International Service
533 Glendale Boulevard
Los Angeles, CA 90026-5097

RE: United States-Caribbean Basin Trade Partnership Act (CBTPA); Subheading 9802.00.8044, HTSUS; U.S. Note 3(d), subchapter XX, chapter 98, HTSUS; Nylon filament yarn; 19 CFR §10.223(c)(3); Sewing thread

Dear Ms. Saizan:

This is in reply to your letter of August 15, 2003, on behalf of Fortune Swimwear LLC, requesting a ruling on the classification, country of origin and eligibility of swimsuits under the United States-Caribbean Basin Trade Partnership Act (CBTPA).

FACTS:

The swimwear will be constructed of knit fabric composed of 85 percent nylon, 15 percent spandex and will be available in three sizes – infants’ (style 2202), girls’ (style 2613) and ladies’ (style 7554).

The fabric will be formed in the United States from nylon filament yarns that are formed in Mexico and/or in the United States. The nylon yarns produced in Mexico will be imported into the United States duty free under subheading 5402.41.90 of the Harmonized Tariff Schedule of the United States (HTSUS) under the North American Free Trade Agreement (NAFTA). The spandex yarns will be produced by extrusion, spinning or other processes in the United States.

Once formed, the knit fabric will be sent to a fabric printer (converter) in the United States. The printed fabric will then be sent to a cutter in the United States designated by your client, where the components will be cut.

In a telephone conversation with a member of my staff, you advised CBP that all lining fabrics, bra components and sewing thread will be produced in the United States from U.S.-made materials and cut as needed at shops designated by your client.

Finally, the swimwear components will be bundled and shipped to the Dominican Republic for assembly. The sewing thread used to assemble the garment components will be formed and finished (dyed) in the United States or formed in the United States and finished (dyed) in the Dominican Republic.

In your opinion, the swimwear is eligible for preferential treatment under subheading 9802.00.8044, HTSUS.

ISSUE:

What is the classification and country of origin of the swimwear, and is it eligible for preferential tariff treatment under the CBTPA?

LAW AND ANALYSIS:

The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination 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 implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA. The Dominican Republic was designated a beneficiary country by Presidential Proclamation

7351, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 10, 2000 (see 65 Fed. Reg. 60236).

The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§ 10.221 through 10.228 of the Customs Regulations (19 CFR §§10.221 through 10.228).

Section 213(b)(2)(A) of the CBERA, as amended, specifies the textile and apparel articles to which preferential treatment applies under the CBTPA during the transition period. Section 213(b)(2)(A)(i)(I) provides, in pertinent part, that preferential treatment applies to ---

(i) Apparel articles sewn or otherwise assembled in one or more CBTPA beneficiary countries from fabrics wholly formed and cut or from components knit-to-shape in the United States from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are wholly formed and cut in the United States) that are ---

(I) entered under subheading 9802.00.80 of the HTS;

Apparel articles entered on or after September 1, 2002, shall qualify under the preceding sentence only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is carried out in the United States. Apparel articles entered on or after September 1, 2002, shall qualify under the first sentence of this clause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are woven fabrics, is carried out in the United States.

Subheading 9802.00.8044, HTSUS, provides as follows:

Articles . . . assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in
condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating and painting.

Articles for which duty free treatment is claimed under U.S. note 7(b)(i) to this subchapter.

U.S. Note 7(b)(i), Subchapter II, Chapter 98, HTSUS, as recently amended by Presidential Proclamation 7626 of November 13, 2002 (67 Fed. Reg. 69459), provides that:

For purposes of heading 9802.00.80, duty-free treatment shall be accorded to the following articles imported directly from a beneficiary United States-Caribbean Basin Trade Partnership Act (CBTPA) country previously designated by the President in a proclamation issued pursuant to such Act and enumerated in general note 17(a) to the tariff schedule—

(i) apparel articles sewn or otherwise assembled in one or more such beneficiary countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States, from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of chapter 56 and are wholly formed and cut in the United States) provided they otherwise comply with the provisions of this note;

Articles otherwise eligible to enter under this heading, and which satisfy the conditions set forth in U.S. note 3 to subchapter XX of this chapter, shall not be ineligible to enter under this heading. Articles covered by the terms of this note shall be admitted into the customs territory of the United States free of quantitative limitations. Apparel articles entered on or after September 1, 2002, that are assembled in a beneficiary CBTPA country from knitted or crocheted fabrics or from woven fabrics shall be eligible to receive the duty treatment provided for in this note only if all dyeing, printing and finishing of such fabrics from which the articles are assembled is carried out in the United States. The following countries have been determined by the USTR to have satisfied the customs requirements of the CBTPA and, therefore, to be afforded the tariff treatment provided for in this note:

Barbados, Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Saint Lucia, Trinidad and Tobago.

U.S. Note 3(d), subchapter XX, HTSUS, provides that:

For purposes of U.S. note 7[b](i) [sic] to subchapter II of this chapter and subheadings 9820.11.03, 9820.11.06, and 9820.11.18, an article otherwise eligible for preferential treatment under such subheadings shall not be ineligible for such treatment because the article contains nylon filament yarn (other than elastomeric yarn) classifiable under subheading 5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 5401.41.90, 5402.51.00 or 5402.61.00 of the tariff schedule that entered free of duty as a product of Israel under the terms of general note 8 to the tariff schedule or as a good of Canada or a good of Mexico under the terms of general note 12 to the tariff schedule.

The exception for nylon filament yarn from Mexico set forth in U.S. Note 3(d), subchapter XX, chapter 98, HTSUS, applies to subheading 9802.00.8044, HTSUS. Therefore, the use of Mexican nylon filament yarn would not render the swimwear ineligible for classification under that tariff provision. See Headquarters Ruling Letter (HQ) 562536, dated December 23, 2002.

Finally, you state that the sewing thread used to assemble the fabric components may be formed in the United States and “finished” (dyed) in the Dominican Republic. Section 10.223(c)(3), of the Interim Customs Regulations (19 CFR §10.223(c)(3)) reads:

(3) Dyed, printed or finished thread.
An article otherwise described under paragraph (a) of this section will not be ineligible for the preferential treatment referred to in § 10.221 because the thread used to assemble the article is dyed, printed, or finished in one or more CBTPA beneficiary countries. See 68 Federal Register 13833 dated March 21, 2003.

Therefore, the United States thread finished in the Dominican Republic will not disqualify the swimwear from classification under subheading 9802.00.8044 HTSUS. See HQ 966239, dated May 16, 2003.

In your letter, you also ask for a determination on the classification and country of origin of the swimwear. The babies’ swimsuits (style 2202) are classifiable under subheading 6111.30.5040, HTSUS, as babies’ other knitted garments of synthetic fibers. The girls’ and women’s swimsuits (styles 2613 and 7554) are classifiable under subheading 6112.41.0020, HTSUS, and subheading 6112.41.0010, HTSUS, respectively, as women’s or girls’ swimwear of synthetic fibers, of fabric containing by weight 5 percent or more elastomeric yarn or rubber thread.

With regard to the country of origin, section 334 of the Uruguay Round Agreements Act (URAA) (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 Fed. Reg. 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.

Paragraph (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 is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of section 102.21 is inapplicable.

Paragraph (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.”

Paragraph (e) states, in pertinent part, that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:”

HTSUS Tariff shift and/or other requirements

6101 - 6117 (1) If the good is not knit to shape and consists of two or more component parts, except for goods of subheading 6117.10 provided for in paragraph (e)(2) of this section, a change to an assembled good of heading 6101 through 6117 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession.

As the swimwear is not knit to shape, consists of two or more component parts and is assembled in a single country (the Dominican Republic) as per the terms of the tariff shift requirement, country of origin is conferred in the Dominican Republic.

HOLDING:

The babies’ swimsuits, style 2202, are classifiable under subheading 6111.30.5040, HTSUS. The girls’ and women’s swimsuits, styles 2613 and 7554, are classifiable under subheading 6112.41.0020, HTSUS, and subheading 6112.41.0010, HTSUS, respectively.

The country of origin of the swimwear is the Dominican Republic.

Moreover, the swimwear assembled in the Dominican Republic from components knit in the U. S. qualifies for preferential tariff treatment under subheading 9802.00.8044, HTSUS, assuming compliance with all applicable requirements. Merchandise liquidated under that tariff provision, under the facts presented in this case, is duty free and free of quantitative limitations.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

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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See also:

• Tariff No.: 5402.10.30 - Single high tenacity yarn of nylon or polyamides, not put up for retail sale
• Tariff No.: 5402.10.60 - Multiple (folded) or cabled high tenacity yarn (except sewing thread) of nylon or other polyamides, not put up for retail sale
• Tariff No.: 5402.31.30 - Single textured yarn, of nylon or other polyamides, measuring not more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.31.60 - Multiple or cabled textured yarn (except sewing thread), of polyamides, single yarn not more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.32.30 - Single textured yarn, of nylon or other polyamides, measuring more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.32.60 - Multiple or cabled textured yarn (except sewing thread), of polyamides, single yarn more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.41.10 - Synth filament yarn, for doll wigs, of colored multifil, untwisted/with twist < 5 turns/meter, of nylon or other polyamide, not retail sale
• Tariff No.: 5402.41.90 - Syn filament yarn (not for doll wigs), of colored multifil, untwisted/with twist < 5 turns/meter, of nylon or o/polyamides, not retail sale
• Tariff No.: 5402.51.00 - Nylon or other polyamide yarns, single, with a twist exceeding 50 turns/m, not put up for retail sale
• Tariff No.: 5402.61.00 - Nylon or other polyamide yarn, multiple (folded) or cabled, (except sewing thread), not put up for retail sale
• Tariff No.: 6111.30.50 - Babies' garments and clothing accessories, knitted or crocheted, of synthetic fibers, nesoi
• Tariff No.: 6112.41.00 - Women's or girls' knitted or crocheted swimwear of synthetic fibers
• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9820.11.03 - CBTPA goods: Apparel article of chapter 61/62 assembled one or more CBTPA country under certain conditions from fabrics formed and cut in US
• Tariff No.: 9820.11.06 - CBTPA goods: Apparel articles cut in one or more CBTPA from US formed fabric of US formed yarn assembed in CBTPA with US yarn
• Tariff No.: 9820.11.18 - CBTPA goods: Knitted or crocheted apparel, cut and assembled in one or more CBTPA from US fabric of US yarn if assembly with US thread