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March 8, 2004

CLA-2 RR:CR:TE 966820 TMF

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.12

Port Director, Newark/New York c/o Residual Liquidation & Protest Branch 1100 Raymond Boulevard
Suite 402
Newark, New Jersey 07102

RE: Eligibility of men’s knit garments made of foreign-origin collars and cuffs made from circular knit fabric under the African Growth and Opportunity Act (AGOA)

Dear Sir or Madame:

This is in reply to your correspondence forwarding Application for Further Review of Protest (AFR) 4601-03-102825, filed by the law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP on behalf of their client, Americo Group, Inc. Your office submitted samples to this office for our review.

FACTS:

On June 27, 2003, Customs and Border Protection (hereinafter “CBP”) liquidated twelve entries of men’s knit shirts and classified the goods in 6105.20.2010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “Men’s or boys’ shirts, knitted or crocheted: Of man-made fibers: Other...Men’s.”

Counsel for the protestant timely filed on September 24, 2003 a protest and request for Application for Further Review (hereinafter “AFR”) against CBP’s liquidation of the entries in question. The protestant asserts that classification in subheading

9819.11.12, HTSUSA, which provides for duty-free treatment of apparel goods under the AGOA, is proper.

Review of the AFR is warranted pursuant to 19 C.F.R §§174.24 and 174.25 on the basis that CBP has not ruled on whether collars produced from circular knit fabric are eligible for preferential treatment under the African Growth and Opportunity Act (hereinafter referred to as “AGOA”).

The Customs Protest and Summons Information Report (Customs Form 6445A) identifies two styles of merchandise at issue: Style number FA10225BG and FA10225. However, counsel submitted one style, FA10225, which is a Henley-style men’s shirt constructed of 55 percent polyester and 45 percent cotton finely knit, drop needle interlock fabric. It also has a partial front three-button placard opening, long sleeves with rib knit cuffs, rib knit Henley collar and a straight, hemmed bottom with side slits.

Also submitted with the protest is a sample of 33-inch circular knit fabric in 1x1 rib knit construction that is 66 inches wide in circumference. The circular knit fabric has no lines of demarcation and appears to be the same fabric as used in the previously discussed sample shirt for the collars and cuffs.

The fabric invoices were also submitted with the protest which state that 15,244 yards (231 rolls) are made of 55 percent polyester, 45 percent cotton, 1x1 rib knit fabric measuring 66 inches in width totaling 339 yards (7 rolls). The destination is indicated as the country of Lesotho.

In the Memorandum in Support of Protest and AFR, counsel for the protestant states that the fabric is imported into Lesotho from Hong Kong or Taiwan where it arrives in rolls of unmarked fabric. The fabric is measured, marked and cut to form various body components (e.g., front, back, sleeves).

The collar fabric is manufactured as a large loop of rib knit fabric without demarcation lines. It is then cut to form the collar and cuffs. Counsel for the protestant states that the fabric is not shaped prior to arrival in Lesotho nor demarcation lines applied outside of Lesotho. Rather, the counsel for the protestant states the following takes place in Lesotho:

Fabric without demarcation lines is spread on the table. A paper pattern is laid on top of the fabric. The paper pattern dictates the dimensions for the collars to be cut from the fabric. A pair of scissors is used to cut the fabric according to the collar and cuff pattern. Along with the body components, the collar and cuffs are marked, measured and cut from fabric rolls in Lesotho and the garment is assembled in Lesotho.

ISSUE:

Whether the subject men’s knit, garment shirt, identified as style FA10225, is eligible for preference under the African Growth and Opportunity Act?

LAW AND ANALYSIS:

The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation 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 prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty- and quota-free benefits extended to textile and apparel articles under the Act. Lesotho was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59321). It was determined to be eligible for textile benefits under the AGOA by the USTR effective April 23, 2001 (66 Fed. Reg. 21192).

The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XIX, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at §§ 10.211 through 10.217 of the Customs Regulations (19 CFR 10.211 through 10.217).

Classification of the Subject Garments

Style FA10225 is classifiable in subheading 6105.20.2010, Harmonized Tariff Schedule of the United States Annotated, HTSUSA, which provides for “Men’s or boys’ shirts, knitted or crocheted: Of man-made fibers: Other...Men’s.” The general column one rate of duty is 32 percent ad valorem.

Eligibility under Subheading 9819.11.12, HTSUSA

Apparel articles wholly assembled in a sub-Saharan African lesser-developed beneficiary country (LDBC) and directly imported into the U.S. are entitled to duty free and quota-free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, which provides as follows:

Apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, regardless of the country of origin of the fabric or the yarn used to make such articles, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive.

U.S. Note 2(d) lists Lesotho as qualifying for designation as a lesser-developed beneficiary country. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12, HTSUSA.

The term "wholly assembled in", when used with reference to a textile or apparel article in the context of one or more beneficiary countries or one or more lesser developed beneficiary countries, means :

[A]ll of the components of the textile or apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or one or more lesser developed beneficiary countries. See 19 C.F.R. 10.212.

The term "Knit-to-shape components”, when used with reference to textile components, means:

Components that are knitted or crocheted from a yarn directly to a specific shape containing a self-start edge. Minor cutting or trimming will not affect the determination of whether a component is "knit-to-shape." Id.

Subheading 9819.11.12, HTSUSA, allows for the use of foreign yarn or fabric in the production of apparel articles, and specifically provides that the country of origin of the fabric is not a consideration. Since the country of origin of the fabric is not relevant to the receipt of AGOA lesser developed beneficiary country preferential tariff and quota treatment (provided the other requirements of the Act are met), the fact that the collar and cuff fabric used in the subject shirt originates in Hong Kong or Taiwan is not relevant.

The collars and cuffs used in the subject men’s shirt are made from 1x1 rib circular knit construction fabric which is imported on rolls into Lesotho. Further, counsel for the protestant stated this fabric does not contain any lines of demarcation, nor is it shaped prior to arrival to Lesotho. Rather, it undergoes a cut and sew assembly process (see previous Facts section) to create the Henley-style collars and cuffs which are ultimately used in the subject shirt.

Based on the facts and supporting arguments from the counsel for the protestant, we find that as the subject shirt contains collars and cuffs produced from 1x1 circular rib knit fabric, which is cut to shape in Lesotho and assembled in Lesotho with other components cut to shape in Lesotho from fabric, the shirt qualifies for AGOA preferential treatment under subheading 9819.11.12, HTSUSA.

HOLDING:

The protest should be ALLOWED. The subject men’s knit shirt, identified as style FA10225, which incorporates collars and cuffs produced from circular knit fabric qualifies for AGOA preference in subheading 9819.11.12, HTSUSA.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division

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