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NY K80252




November 18, 2003

CLA2-RR:NC:TA:N3:359 K80252

CATEGORY: CLASSIFICATION

Ms. Barbara Moore
The Janel Group of N.Y., Inc.
150-14 132nd Avenue
Jamaica, NY 11434

RE: Country of origin determination; 19 CFR 102.21(c)(2); tariff shift; Classification and status under the North American Free Trade Agreement (NAFTA) of women’s knit garments produced in Mexico; Article 509

Dear Ms. Moore:

This is in reply to your letter dated October 30, 2003, on behalf of KBL Group International Ltd., East Rutherford, New Jersey, in which you requested the classification, country of origin determination and originating status under the NAFTA for a woman’s knit garment which will be produced in Mexico and imported into the United States. You have provided a sample of the garment, which will be returned, as you have requested.

FACTS:

The submitted sample, Style 39202, is a woman’s sleeveless crewneck pullover garment constructed from 96% cotton, 1% lycra and 3% other fibers knitted fabric. The rib knit panels of the garment have more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. The crew neckline and armhole openings are capped with rib knit binding fabric.

The manufacturing operations for the pullover are as follows:

U.S. cotton spun yarn is imported into Mexico Chinese yarn made of lycra and nylon is also imported into Mexico The panels are knit and assembled into a garment in Mexico The garment is inspected, packed for export and shipped to the U.S.

ISSUE:

What are the classification, country of origin and NAFTA status of the garment?

CLASSIFICATION:

The applicable subheading for Style 39202 will be 6110.20.2075, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: Of cotton: Other: Other: Other: Women’s or girls’. The general rate of duty will be 16.9% ad valorem.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

Section 334 of the Uruguay Round Agreements Act (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at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996.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 FR 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 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

6101 - 6117 If the good is not knit to shape and consists of two or more component parts, 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 pullover is not knit to shape, does consist of two or more component parts and is assembled in a single country, that is, in Mexico, as per the terms of the tariff shift requirement, country of origin is conferred in Mexico.

NAFTA STATUS:

You have stated in your letter that some of the yarn, specifically the nylon/lycra yarn, is spun in China and imported into Mexico for knitting. An inclusion of foreign, non-originating material would usually preclude preferential treatment under the NAFTA, as it does not meet the tariff shift requirement of General Note 12(t)/61.35 which states:

“A change to headings 6109 through 6111 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or heading 5508 through 5516 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.”

The nylon/lycra yarn is of chapter 54 and is therefore excluded from this provision. However, General Note 12(f)(vi)states:

“A good provided for in chapters 50 through 63, inclusive, of this schedule that does not originate because certain fibers or yarns used in the production of the component of the good that determines the tariff classification of the good do not undergo an applicable change in tariff classification, provided for in subdivisions (r), (s) and (t) of this note, shall nonetheless be considered to originate if the total weight of all such fibers or yarns in that component is not more than 7 percent of the total weight of that component.”

In your letter you stated that the nylon/lycra yarn imported from China comprises approximately 4% by weight of the finished garment. It is within the tolerance limits as set forth in the General Note 12(f)(vi), and therefore, the garment can be treated as if it were “wholly originating”.

Style 39202, being wholly obtained or produced entirely in the territories of the United States and Mexico, will meet the requirements of HTSUSA general Note 12(b)(i). Style 39202 will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations and agreements. Because the garments are “originating” under the NAFTA, these garments are not subject to visa requirements or quota restraints.

HOLDING:

The country of origin of the pullover is Mexico.

The applicable subheading for Style 39202 will be 6110.20.2075, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: Of cotton: Other: Other: Other: Women’s or girls’. The general rate of duty will be 16.9% ad valorem.

Style 39202, being wholly obtained or produced entirely in the territories of the United States and Mexico, will meet the requirements of HTSUSA general Note 12(b)(I). Style 39202 will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations and agreements. Because the garment is “originating” under the NAFTA, the garment is not subject to visa requirements or quota restraints.

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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