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NY J84113




June 16, 2003

CLA-2-RR:NC:TA:N3:356 J84113

CATEGORY: CLASSIFICATION

Mr. Willliam Julich
Delmar International, Inc.
147-55 175th Street
Jamaica, NY 11434

RE: Classification and country of origin determination for a man’s knit garment; Products of the West Bank, the Gaza Strip or a qualifying industrial zone; General Note 3 (a) (v); United States - Israel Free Trade Agreement; 19 CFR 102.21(c)(4); most important assembly; T.D. 98-62.

Dear Mr. Julich:

This is in reply to a letter dated May 7, 2003, on behalf of Charter Ventures LLC, requesting a classification and country of origin determination for a man’s knit garment. You have stated that the countries of production will be Israel, China, and Jordan. You also state that the operations in Jordan will take place in the Irbid, Qualifying Industrial Zone (QIZ). You have provided a sample of the garment parts as they are knit in Israel, China and Jordan (QIZ) and a sample of the finished garment as it will be imported into the United States. The garment parts include the front and back panels, the left and right sleeves, and the collar. As requested, your samples will be returned.

FACTS:

The submitted sample, Style 2623, is a man’s sweater constructed from 100 percent lamb’s wool, jacquard knit fabric that measures 3 stitches per two centimeters counted in the horizontal direction. The garment has a rib knit shawl collar; long sleeves with rib knit cuffs; and a rib knit bottom.

The front and the back panels are knit to shape with rib knit self-start bottoms, self-finished sides, shaped armholes, and curved, shaped necklines. The sleeves are knit to shape with rib knit self-start cuffs, self finished sides, and shaping at the armholes. The shawl collar is knit to the shape used in the garment.

The manufacturing operations are as follows:

The back panel is knit to shape

The right and left sleeve panels are knit to shape

COUNTRY “C” (IRBID QIZ, JORDAN):

The front panel is knit to shape
The collar is knit to shape
The components are linked into a finished garment The garment is washed and finished for export to the United States

ISSUE:

What are the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for Style 2623 will be 6110.11.0015, Harmonized Tariff Schedule of the United States, (HTS), which provides for: sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of wool or fine animal hair: of wool: sweaters: men's. The general rate of duty is 16.1 percent ad valorem. The garment falls within textile category designation 445.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

You stated that the processing operations in Jordan were performed in the Irbid Qualifying Industrial Zone (QIZ). General Note 3(a)(v)(G), HTSUS, defines a “qualifying industrial zone” as any area that:”(1) encompasses portions of the territory of Israel and Jordan or Israel and Egypt; (2) has been designated by local authorities as an enclave where merchandise may enter without payment of duty or excise taxes; and (3) has been designated by the U.S. Trade representative in a notice published in the Federal Register as a qualifying industrial zone.”

By letters dated June 30, 1997 and July 1, 1997, to the U.S. Trade Representative, the Governments of Jordan and Israel, respectively, requested the designation of the industrial zone in Irbid, Jordan, as a QIZ. Pursuant to subsequent consultations among the three Governments, the Governments of Israel and Jordan entered into a written agreement dated November 16, 1997, relating to the establishment of the Irbid QIZ, which included the following provision, entitled “Rules of Origin”:

The [Governments of Israel and Jordan] agree that the origin of any textile or apparel product that is processed in the Irbid Qualifying Zone, regardless of the origin or place of processing of any of its inputs or materials prior to entry into, or subsequent withdrawal from, the zone, will be determined solely pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay Rounds Act, 19 U.S.C.§ 3592.

By notice published in the Federal Register on March 13, 1998 (63 FR 12572), the Office of the U.S. Trade Representative formally designated the Israeli-Jordanian Irbid Qualifying Industrial Zone as a QIZ. Treasury Decision 98-62, published in the Federal Register on June 26, 1998 (63 FR 34960), determined that pursuant to the agreement between the Governments of Israel and Jordan, and by mutual consent of the U.S. and Israel, Customs will exclusively apply the textile and apparel rules of origin set forth in 19 C.F.R. §102.21 in determining the country of origin of a textile or apparel product processed in the Irbid QIZ.

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: "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 of the foreign materials 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 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 (3) If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory or insular possession.

The subject merchandise is classifiable as a men’s sweater in heading 6110, HTSUS. Section 102.21 (e) requires a tariff shift to headings 6101 through 6117 from any heading outside that group. In this case, a tariff shift to heading 6110, HTSUS, occurs in Jordan, but from components that are classifiable in heading 6117, HTSUS. As heading 6117, HTSUS, is excepted by Section 102.21 (c)(2), the tariff shift is not applicable.

Section 102.21(c)(3) applies where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) and where the merchandise consists of either a good that was knit to shape or (with the exception for goods of certain specifically enumerated headings), was wholly assembled in a single country, territory, or insular possession.

Section 102.21 (c)(3)(i) provides the following:

“If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; ...”

Section 102.21 (b) states that:

(3) KNIT TO SHAPE: The term “knit to shape” applies to any good of which 50 percent or more of the exterior surface area is formed by major parts that have been knitted or crocheted directly to the shape used in the good, with no consideration being given to patch pockets, appliques, or the like. Minor cutting, trimming, or sewing of those major parts will not affect the determination of whether a good is “knit to shape”.

(4) MAJOR PARTS: The term “major parts” means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar parts.

In this instance, the subject garment is comprised of knit to shape panels that have not been knit in a single country, territory or insular possession. Accordingly, Section 102.21 (c)(3) is inapplicable.

Section 102.21 (c)(4) provides the first multi-country rule. Section 102.21 (c) (4) states that;

“Where the country of origin of a textile or apparel product cannot be determined under paragraph (c) (1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred.”

In the case of the subject merchandise, the country of origin is the country in which the assembly of the garment is combined with the knitting of the front panel because that country will constitute the country where the most important manufacturing or assembly process takes place. The knitting to shape of the front panel, when combined with the assembly of the garment, both of which occur in Jordan, constitutes the most important assembly or manufacturing process for this garment. Accordingly, the country of origin of Style 2623 is Jordan, the country in which the front panel was knit to shape and assembled.

STATUS UNDER THE UNITED STATES - ISRAEL FREE TRADE AGREEMENT:

Pursuant to the authority conferred by section 9 of the U.S. - Israel Free Trade Area Implementation Act of 1985 (19 U.S.C § 2112 note), the President issued Proclamation No. 6955 dated November 13, 1996 (published in the Federal Register on November 18, 1996 (61 Fed. Reg. 58761)), which modified the Harmonized Tariff Schedule of the United States (HTSUS) (by creating a new General Note 3 (a)(v)) to provide duty-free treatment to articles which are the product of the West Bank, Gaza Strip or a qualifying industrial zone (QIZ), provided certain requirements are met. Such treatment was effective for products of the West Bank, Gaza Strip or a qualifying industrial zone entered or withdrawn from warehouse for consumption on or after November 21, 1996.

Under General Note 3 (a)(v), HTSUS, articles the products of the West Bank, Gaza Strip or a QIZ which are imported directly to the United States from the West Bank, Gaza Strip, a QIZ or Israel, qualify for duty-free treatment, provided the sum of (1) the cost or value of materials produced in the West Bank, Gaza Strip, or QIZ or Israel, plus (2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a QIZ or Israel, is not less than 35 percent of the appraised value of such articles when imported into the United States. An article is considered to be a product of the West Bank, Gaza Strip, or a QIZ if it is either wholly the growth, product or manufacture of one of those areas or a new and different article of commerce that has been grown, produced or manufactured in one of those areas.

With respect to the requirement that the articles be imported directly, General Note 3(a)(v) (B)(1) provides that:

Articles are “imported directly” for purposes of this paragraph if: (1) they are shipped directly from the West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States without passing through the territory of any intermediate country;

You have stated in your letter that the garments will be imported directly from the Irbid QIZ, Jordan to the United States. It cannot be ascertained whether the 35% value content requirement is met until the “appraised value” of the merchandise is determined at the time of entry into the United States.

HOLDING:

The country of origin of Style 2623 is Jordan. The garment falls within textile category designation 445. Based upon international textile trade agreements, products of Jordan are not subject to visa requirements or quota restraints.

Based upon the information submitted, the garments will be considered a product of the Irbid QIZ, Jordan and will be eligible for preferential duty treatment under General Note 3 (a)(v), HTSUS, assuming that the garments are imported directly from the Irbid QIZ, Jordan to the United States and the 35% value content requirement is satisfied. A determination will be made at the time of entry of the merchandise into the United States, whether the above requirements are met.

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 sections 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 the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mary Ryan at 646-733-3071.

Sincerely,

Robert B. Swierupski
Director,

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