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NY K84601





April 1, 2004
CLA-2-RR:NC:WA:355 K84601

CATEGORY: CLASSIFICATION

Mr. Arlen T. Epstein
David C. Williams, Esq.
8 Brook Lane
Cortlandt Manor, NY 10567

RE: Classification and country of origin determination for men’s dress pants: products of Jordan or a Qualifying Industrial Zone; General Note 3(a)(v); 19 C.F.R.§102.21(c)(4); T.D. 98-62

Dear Mr. Epstein:

This is in reply to your letter dated March 24, 2004, requesting the classification and country of origin determination for men’s dress pants, a product of Jordan or a Qualifying Industrial Zone (QIZ). The request was made on behalf of Kindnoon Trading, Ltd.

FACTS:

The garment, style KN002, is a men’s dress pant made of 100 percent polyester woven fabric. The garment features a zippered fly front with a left over right hook and eye closure and inside button closure at the waistband; six belt loops; pleated front panels; two side seam pockets; two back welt pockets with buttons and cuffed pant legs. A sample of a finished garment as well as a sample of the unfinished garment in its condition as shipped from China to Jordan for further fabrication were provided and will be returned as you have requested.

The manufacturing operations are as follows:

CHINA:

The fabric is formed
The fabric is cut into component parts
The front and back panels are made
The zipper is sewn at the left front panel The front pockets are sewn at the front panel The back pockets are sewn at the back panel; the keyhole is made and the buttons are attached The side seams are sewn
The right and left panels are joined and the back rise is formed The overlock at the front rise, inseam and hem are threaded The waistband is set without the closure being finished The belt loops are set on the waistband

JORDAN OR A QUALIFIED INDUSTRIAL ZONE:

The zipper is sewn at the right side
The two front panels are joined and the front rise is formed The inseams of the front and back panels are sewn The closure of the waistband is finished
The hook and eye closure and button inside the waistband are attached The garment is washed, pressed and packed

Bartacking will be done in either China or Jordan.

ISSUE:

What are the classification and country of origin of the subject merchandise under the US-Israel Free Trade Agreement?

CLASSIFICATION:

The applicable subheading for style KN002 will be 6203.43.4010, Harmonized Tariff Schedule of the United States (HTS), which provides for men’s or boys’ trousers, bib and brace overalls, breeches and shorts, of synthetic fibers, other, other, other, other, trousers and breeches, men’s. The general rate of duty is 27.9% ad valorem.

The pants fall within textile category designation 647. 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 U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CUSTOMS.TREAS.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.

General Note 3(a) (v) (G) 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 duty or excise taxes; and (3) has been designated by the U.S. Trade Representative in a notice published in the Federal Register as a qualifying industrial zone”. You have not identified the QIZ so we cannot comment upon whether it is a designated qualifying industrial zone.

Treasury Decision 98-62 dated July 13, 1998, determined that pursuant to the agreement between the Governments of Israel and 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. §102.21 in determining the country of origin of a textile or apparel product processed in a qualifying 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

6201 – 6208 If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled 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(e) states that the good must be completely assembled in a single country, territory or insular possession. Accordingly, as the subject merchandise does not meet this requirement, 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, and 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, 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, sewing the zipper at the right side, joining the two front panels and forming the front rise, sewing the inseams, and finishing the closure of the waistband, constitute the most important assembly processes. Accordingly, the country of origin of the garment 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. §2112 note), the President issued Proclamation No. 6955 dated November 13, 1996 (published in the Federal Register on November 18, 1996 (61 Fed. Reg. 58761), which modified the Harmonized Tariff Schedule of the United States (HTSUS) 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 a Qualifying Industrial Zone (QIZ), provided certain requirements are met. Such treatment was effective for products of the West Bank, Gaza Strip or QIZ entered or withdrawn from warehouse for consumption on or after November 21. 1996.

Under General Note 3 (a) (v), HTSUS, articles the products of the West Bank, Gaza Strip or a QIZ which are imported directly to the U.S. from the West Bank, Gaza Strip, a QIZ or Israel, qualify for duty-free treatment, provided the sum of (1) the cost or value of materials produced in the West Bank, Gaza Strip, a QIZ or Israel, plus (2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a QIZ or Israel, is not less than 35 percent of the appraised value of such articles when imported into the U.S. An articles is considered to be a product of the West Bank, Gaza Strip, a QIZ if it is either wholly the growth, product or manufacture of one of those areas or a new and different article of commerce that has been grown, produced or manufactured in one of those areas.

With respect to 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—
they are shipped directly from the West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States without passing through the territory of any intermediate country;”

You have not stated that the garment is shipped directly to the United States. In your letter, you stated that it was not yet determined if bartacking would be done in China or Jordan, nor where or when, in the sequence of manufacturing, that step would take place.

In regard to the 35 percent value content requirement, your letter gave no indication of meeting this requirement. Please note that for purposes of this requirement, the direct costs of processing operation performed in a qualifying QIZ must constitute more than 35 percent of the appraised value of the merchandise; this does not include the cost of the foreign fabric and certain trimmings used in the assembly of the garment.

HOLDING:

Based upon the information provided, the garment will be considered a product of Jordan. Should the garment meet all applicable requirements, the rate of duty will be Free. Otherwise, the garment is dutiable at the rate of 27.9% ad valorem. The country of origin of the garment is Jordan. Based upon international textile trade agreements, products of Jordan currently are not subject to quota and they do not require a visa. 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 C.F.R. §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 C.F.R. §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 C.F.R. §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 Camille R. Ferraro at 646-733-3046.

Sincerely,

Robert B. Swierupski
Director,

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