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HQ 967449

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December 8, 2004

CLA-2: RR:CR:TE 967449 ASM

CATEGORY: CLASSIFICATION

Arthur W. Bodek, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 399 Park Avenue
25th Floor
New York, NY 10022-4877

RE: Request for Binding Ruling; Date of Export for Determining the Quota and Visa Treatment of Garments

Dear Mr. Bodek:

This is in response to correspondence dated November 1, 2004, requesting a binding ruling on behalf of your client, Liz Claiborne, Inc., asking Customs and Border Protection (CBP) to determine the date of exportation for women’s trousers for quota and visa purposes. No samples have been provided with this request.

FACTS:

In your request, you state that women’s 100 percent cotton woven trousers will be manufactured under a multiple country processing program. Essentially, you ask that we consider the following example: In 2004, trousers manufactured in Hong Kong will be subject to minor finishing operations in China; in 2005, the packaged trousers will then be shipped back from China to Hong Kong for export to the United States.

ISSUE:

What is the date of exportation of the subject merchandise for quota and visa purposes?

LAW AND ANALYSIS:

In determining the date of exportation in this example, we begin with the presumption the country of origin is Hong Kong. Title 19 C.F.R. Section 12.130(i), provides the following:

Date of exportation. For quota, visa or export license requirements, and statistical purposes, the date of exportation for textiles or textile products, subject to section 204, Agricultural Act of 1956, as amended, shall be the date the vessel or carrier leaves the last port in the country of origin, as defined by this section. Contingency of diversion in another foreign territory or country shall not change the date of exportation for quota, visa or export license requirements or for statistical purposes.

You assert that under Title 19 C.F.R. Section 12.130(i), the date of export is the date the goods are last shipped to the United States from their country of origin, i.e., that the country of origin is Hong Kong and the date of export is in the year 2005. However, in order to determine if the date of export will occur in the year 2004 or 2005, we first need to consider whether or not these facts give rise to a contingency of diversion within the meaning of 19 CFR 12.130(i).

In the case of Hugo Stinnes Steel & Metals Co. v. United States, 453 F. Supp. 94 (1978), which was affirmed by the United States Court of Customs and Patent Appeals in United States v. Hugo Stinnes Steel & Metals Co., 599 F2d 1037 (1979), the United States Customs Court held that an importer’s shipment of steel leaving Japan before an exemption deadline for the imposition of a supplemental duty, but arriving and leaving Belgium for the United States after the deadline, was still exempt from the additional duties. The court determined that the steel constituted an export the moment it was severed from the mass of goods in Japan with the intent, however circuitously, to join the mass of goods in the United States. The court explained that each of the alleged contingency of diversions was explainable as customary commercial practice. The court further noted that in construing the meaning of the term “exported”, two factors were of paramount importance, i.e., that there must be an act of shipment or severance from the country of origin, and there must be an intention to unite the articles to a mass of goods of another country.

In applying the principles set forth above in Hugo (supra) to the instant case, we begin by noting that the act of shipping the garments from Hong Kong to China for washing, pressing, and packing, is explainable as a customary commercial practice of the trade. Therefore, a contingency of diversion would not exist when the goods are shipped to China in 2004 for these minor finishing operations. In addition, the subject merchandise will not be finally severed from Hong Kong, which is the country of origin, or entered into the commerce of another country until they are exported from Hong Kong to the United States in the year 2005. Thus, we find the date of exportation to be in the year 2005.

HOLDING:

Based on the facts presented in this ruling and in accordance with 19 C.F.R. 12.130(i), we find the date of exportation for the subject merchandise to be the date in the year 2005 that the goods are shipped from Hong Kong to the United States.

Sincerely,


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