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NY J84530




July 3, 2003

CLA2-61:RR:NC:TA-359:J84530

CATEGORY: CLASSIFICATION

Ms. Rhoda Salus
Sandler, Travis and Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, Florida 33126-2002

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 Al-Kerak Industrial Estate, 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 Ms. Salus:

We are replying to your letter which was undated but was received by this office May 14, 2003, on behalf of your client, Union Capital International, Ltd. You request a classification and country of origin determination for women’s knitwear that will be imported into the United States. Your samples and their component parts are returned as requested. FACTS:
The subject merchandise consists of five samples and their component parts. Style CB 9010 is a woman’s knitted pullover that consists of 47% rayon, 47% polyester, 6% spandex. The fabric of the pullover has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. This style features a shirt collar; a v-shaped neck opening with a placket which has no means of closure; ¾-length sleeves which are hemmed and a hemmed bottom.

The manufacturing operations for the pullover are as follows:

In China (Country A)
-cut fabric into component parts
-construct collar
-sew placket with binding to front panel

In Jordan (Country B)
-sew front and back panels at shoulder seams -sew collar to front and back panels
-sew sleeves to front and back panels
-sew side seams
-fold fabric and hem bottom and sleeves.

Style JA 9102 is a woman’s knitted, long sleeve shirt with a partial front opening that has a zippered closure. The long sleeves feature hemmed cuffs which have four snap closures. The fabric of this shirt has more than ten stitches per linear centimeter in both the horizontal and the vertical directions. The fiber content is 56% polyester, 38% cotton, 6% spandex.

The manufacturing operations for this garment are:

In China (Country A)
-cut fabric into component parts
-construct hood
-sew placket and zipper with binding to front panel -construct cuffs
-sew sleeve placket to sleeve

In Jordan (Country B)
-sew front and back panels at shoulder seams -sew side seams
-sew hood to body
-sew sleeves to body
-hem bottom.

Style JA 9401 is a woman’s knitted pair of pants that consists of 58% polyester, 36% cotton, 6% spandex fibers. The pants feature a covered elastic waistband with a drawstring inside the tunnel; one patch pocket on the rear at the right; hemmed leg openings; a side vent opening with six snap closures on the bottom of each leg; and a contrasting strip of inserted fabric which extends vertically down the side of each leg.

The manufacturing operations for this style are: In China (Country A)
-cut fabric into component parts
-sew pocket to back panel

In Jordan (Country B)
-sew side fabric strips to front and back panels -sew front and back rise
-sew inseams.

Style JA 9101 is a woman’s knitted cardigan, similar to a sweater, that consists of 56% polyester, 38% cotton, 6% spandex fibers. Its fabric has more than nine stitches per two centimeters, measured in the direction in which the stitches are formed. The cardigan features a full-front opening with a zippered closure; a stand-up collar; a banded bottom; two front pockets at the waist; banded cuffs with side slits which allow the cuffs to fold back; and two inside pockets. At each side of the cardigan there is also one three-inch-wide strip which is decorated by piping at each seam in which it is sewn. Although you recommend classification of this cardigan in Heading 6102, HTS, as a jacket, we note that it is precluded from this heading by the absence of tightening at the cuffs or the waistband.

The manufacturing operations for this style are: In China (Country A)
-cut fabric into component parts
-sew inside neck binding to first strip of collar -sew outside and inside pockets to front panels -sew parts of sleeve cuffs to each other
-sew two strips of narrow fabric (acting as piping) to each side strip -sew cuffs to sleeve panels
-sew sleeve panels closed
-sew zipper to its placket

In Jordan (Country B)
-sew front and back panels at shoulder seams -sew jersey knit side strips to front and back panels, thereby sewing side seams closed -sew collar to body
-sew waistband to body
-sew zipper with front placket to body
-sew neck binding inside neckline
-sew sleeves to body.

Style ST 9001 is a woman’s knitted cardigan that consists of 80% cotton, 20% polyester fibers. The fabric of this garment is napped on its inside. It features a full-front opening with a zipper closure; an attached hood with a drawstring closure; long, raglan sleeves; a hemmed bottom; pockets at the waist and interior pockets. Although you recommend that this style be classified as a jacket in heading 6102, HTS, we note that it is precluded from this heading because the hemmed cuffs and the hemmed bottom fail to allow the garment to protect the wearer from the elements.

The manufacturing operations for this style are: In China (Country A)
-cut fabric into component parts
-sew two hood sections together and sew inside twill tape -hem hood and attach drawstring
-sew inside and outside pockets to front panels -sew zipper and plackets to each front panel

In Jordan (Country B)
-sew raglan sleeves to front and back panels at shoulder seams -sew hood to body
-sew neck binding inside neckline
-sew side seams
-hem sleeves and bottom.

You have stated that the processing that takes place in Jordan actually occurs in the Al-Kerak Industrial Estate, a Qualifying Industrial Zone (QIZ).

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the woman’s knitted pullover, Style CB 9010, and the woman’s knitted cardigan, Style JA 9101, will be 6110.30.3055, Harmonized Tariff Schedule of the United States (HTS), which provides for sweaters, pullovers --- and similar articles, knitted or crocheted: of man-made fibers: other: other: other: other: other: women’s. The rate of duty will be 32.2% ad valorem. The applicable subheading for the woman’s knitted shirt, Style JA 9102, will be 6106.20.2010 HTS, which provides for women’s or girls’ blouses and shirts, knitted or crocheted: of man-made fibers: other: women’s. The duty rate will be 32.3% ad valorem. The applicable subheading for the women’s knitted pants, Style JA 9401, will be 6104.63.2006 HTS, which provides for women’s or girls’ ---trousers ---knitted or crocheted: trousers: --- of synthetic fibers: other: other: trousers ---women’s: containing 5 percent or more by weight of elastomeric yarn or rubber thread. The rate of duty will be 28.4 %ad valorem. The applicable subheading for the women’s knitted cardigan, Style 9001, will be 6110.20.2075 HTS, which provides for sweaters, pullovers --- and similar articles, knitted or crocheted: of cotton: other: other: other: women’s. The rate of duty will be 16.9% ad valorem.

The man-made fiber pullover, Style CB 9010, and the man-made fiber cardigan, Style JA 9101, each fall within textile category designation 639. The man-made fiber shirt, Style JA 9102, also falls within textile category designation 639. The man-made fiber pants fall within 648 and the cotton cardigan falls within 339. 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.

You have noted that the production processing that is scheduled for Jordan (Country B) will occur in the Al-Kerak Industrial Estate, Jordan, a 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 the Al-Kerak Industrial Estate, 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 Al-Kerak Industrial Estate, 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 Al-Kerak Industrial Estate, 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 Al-Kerak Industrial Estate 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 Al-Kerak Industrial Estate, 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

6104.63 If the good is not knit to shape and consists of two or 6106.20 more component parts, a change to an assembled 6110.20 good of heading 6101 through 6117 from unassembled 6110.30 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) states:
Wholly Assembled - when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially 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.

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 the good must be assembled in a single country. However, in this instance, for all five samples submitted, the assembly processing takes place 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; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is neither knit to shape nor wholly assembled 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".

In the case of the subject merchandise, for the five styles presented, the following constitute the most important assembly processes: For Style CB 9010, the man-made fiber pullover, -sewing the front and back panels at the shoulder seams -sewing the collar to the front and back panels -sewing the sleeves to the front and back panels and -sewing the side seams, all of which occur in Jordan, Country B.

For Style JA 9102, the shirt,
-sewing the front and back panels at the shoulder seams -sewing the side seams
-sewing the hood to the body and
-sewing the sleeves to the body, all of which occur in Jordan, Country B.

For Style JA 9401, the pants,
-sewing the side fabric strips to the front and back panels -sewing the front and back rise and
-sewing the inseams, all of which occur in Jordan, Country B.

For Style JA 9101, the man-made fiber cardigan, -sewing the front and back panels at the shoulder seams -sewing the jersey knit side strips to the front and back panels, thereby closing the side seams
-sewing the collar to the body
-sewing the waistband to the body
-sewing the zipper and its front placket to the body -sewing the neck binding inside the neckline and -sewing the sleeves to the body, all of which occur in Jordan, Country B.

For Style ST 9001, the cotton cardigan,
-sewing the raglan sleeves to the front and back panels at the shoulder seams
-sewing the hood to the body
-sewing the neck binding inside the neckline and -sewing the side seams, all of which occur in Jordan, Country B.

Accordingly, the country of origin for all five styles presented is Jordan, Country B.

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 Al-Kerak Industrial Estate, 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 five knitted apparel samples for women that you presented is Jordan, Country B. 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 garments are considered a product of the Al-Kerak Industrial Estate, QIZ, Jordan and are eligible for preferential duty treatment under General Note 3 (a) (v), HTS, provided that they are 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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