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NY J84129




June 17, 2003

CLA2-61:RR:NC:TA-359:J84129

CATEGORY: CLASSIFICATION

Mr. Bill Julich
Delmar International, Inc.
147-55 175th Street
Jamaica, New York 11434

RE: Classification and country of origin determination for women’s knitwear; United States - Israel Free Trade Agreement: Products of the West Bank, the Gaza Strip and the Irbid, Jordan Qualifying Industrial Zone; General Note 3(a)(v), Harmonized Tariff Schedule of the United States (HTS);19 CFR 102.21(c)(4); TD 98-62

Dear Mr. Julich:

This is in reply to your letter dated May 9, 2003, and to your subsequent facsimile transmission dated June 13, 2003, on behalf of Charter Ventures, LLC, 135 West 36th Street, 18th floor, New York City. You request a classification and country of origin determination for women’s knitwear that will be imported into the United States. Your sample and its component parts are returned as requested. FACTS:
The subject merchandise consists of Style AL 2165, a woman’s knitted pullover that has long sleeves and a turtleneck. The fiber content is 55% wool, 45% cotton. The pullover consists of two different fabric sections: the lower 2/3rds of the front, back and sleeves is made of 2X2 rib knit fabric, while the upper 1/3rd is jersey knit. The turtleneck is rib knit, as well. Both the jersey and rib knit fabric sections have more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. You also submitted the component panels from which the pullover is made. These consist of Back panel
Self-start bottom
Self-finished sides
Armhole contoured to shape during the knitting process Marker holes at the neck that are not lines of demarcation

Sleeve panels
Self-start ends
Self-finished sides
Contoured to shape during knitting process at point of joining body

Front panel
Self-start bottom
Self-finished sides
Armholes contoured to shape during knitting process Non-continuous line of demarcation at neckline

Strip of fabric for turtleneck.

The manufacturing operations for the pullover are as follows:

In Israel (Country A)
-knit back panel

In China (Country B)
-knit sleeve panels

In Jordan (Country C)
-knit front panel
-knit strip for turtleneck
-assemble panels by linking.
You have stated that the processing that takes place in Jordan actually occurs in the Irbid, Qualifying Industrial Zone (QIZ).

For the purpose of determining the country of origin of this pullover, we note that its main component panels, the “major parts”, that is the front, back and sleeve panels, are considered knit-to-shape components. These components qualify by virtue of their bottoms, their sides and their contoured shapes at the armholes.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the pullover, Style AL 2165, will be 6110.11.0080, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for sweaters, pullovers --- and similar articles, knitted or crocheted: of wool or fine animal hair: of wool: other: women’s. The general rate of duty will be 16.1% ad valorem.

The pullover falls within textile category designation 438. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.gov. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.

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.

However, Section 334 (b) (5) of the Uruguay Round Agreements Act provides that the Act shall not affect, for the purpose of the Customs laws and administration of quantitative restrictions, the status of goods that, under rulings and administrative practices in effect immediately before the enactment of this Act, would have originated in, or been the growth, product or manufacture of, a country that is party to an agreement with the United States establishing a free trade area, which entered into force before January 1, 1987. For such purposes, such rulings and administrative practices that were applied, immediately before the enactment of this Act, to determine the origin of textile and apparel products covered by such agreement shall continue to apply after the enactment of this Act, and on and after the effective date described in subsection (c), unless such rulings and practices are modified by the mutual consent of both parties to the agreement.

You have noted that the production processing that is scheduled for Jordan (Country C) will occur in the Irbid, Jordan, Qualifying Industrial Zone (QIZ). General Note 3(a)(v), HTS, 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 duties or excise taxes; and (3) has been designated by the United States 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 United States 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, Jordan, 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, Jordan, QIZ, 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 the Uruguay Rounds Act, 19 U.S.C., Section 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 QIZ as a bona fide qualifying industrial zone. Treasury decision (T.D.) 98-62, published in the Federal Register on June 26, 1998, (63 FR 34960), determined that pursuant to the agreement between the Government of Israel and the Government of 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., Section 102.21 in determining the country of origin of a textile or apparel product processed in the Irbid, Jordan, 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 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 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) in pertinent part 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 6110.11 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.

Section 102.21(b)(3) states:
Knit to Shape - the term “knit to shape” applies to any good of which 50% 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 the good is knit to shape.

Section 102.21(b)(4) states:
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.

Section 102.21(e) states that, for knit-to-shape garments, the tariff change must occur to heading 6101 through 6117 from a heading outside that group and that the knitting must be performed in a single country. However, in this instance, the tariff occurs within and not outside the designated headings, that is, from the component panels of heading 6117 to the pullover in heading 6110. Further, the components of the pullover are knit in more than one country. Accordingly, as the terms of the tariff shift are not fulfilled, Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) 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.

As the subject merchandise is not knit in a single country, Section 102.21 (c)(3) is inapplicable.

Section 102.21 (c)(4) states, "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". Therefore, the country of origin of the pullover is the country in which the assembly of the garment is combined with the knitting of the front panel and those operations constitute the most important manufacturing or assembly processes for this merchandise.

In the case of the subject merchandise, the knitting to shape of the front panel and the assembly of the pullover, both of which occur in Jordan, constitute the most important assembly processes. Accordingly, the country of origin of the woman’s knitted pullover, Style AL 2165, is Jordan.

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., Section 2112), the President issued Proclamation No. 6955 dated November 13, 1996 (Federal Register, November 18, 1996, 61 FR page 58761), which modified the HTS 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 of a Qualifying Industrial Zone (QIZ), provided that certain requirements are fulfilled. Such treatment effects products of the West Bank, Gaza Strip or a QIZ that are entered or withdrawn for consumption from warehouse on or after November 21, 1996.

Under General Note 3 (a) (v), HTS, articles that are 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 that i) the sum of (a) the cost or value of materials produced in the West Bank, the Gaza Strip, a QIZ or Israel plus (b) the direct costs of processing operations performed in the West Bank, the 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 wholly the growth, product or manufacture of one of those areas or if it is a new and different article of commerce that has been grown, produced or manufactured in one of those areas.

Regarding 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 QIZ, or Israel into the United States without passing through the territory of any intermediate country.

In your submission you have noted that this merchandise will be imported directly from the Irbid, QIZ, Jordan into the United States. We note that we cannot ascertain whether or not the 35 percent value requirement is met until the appraised value of the merchandise is established. This will occur at the time of the entry of the merchandise into the United States.

HOLDING:

The country of origin of the woman’s knitted pullover, Style AL 2165, is Jordan. The garment falls within textile category designation 438. Based upon international textile trade agreements products of Jordan are not subject to quota or the requirement of a visa.

Based upon the information submitted, the pullover is considered a product of the Irbid, QIZ, Jordan and is eligible for preferential duty treatment under General Note 3 (a) (v), HTS, provided that it is imported directly from Jordan and the 35 percent value requirement is satisfied.

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 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 Mike Crowley at 646-733-3049.

Sincerely,

Robert B. Swierupski
Director,

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