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NY K87933

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August 11, 2004
CLA-2-61:RR:NC:TA:355 K87933

CATEGORY: CLASSIFICATION

TARIFF NO.: 6112.41.0010

Ms. Saralee Antrim-Saizan
Customs Administration
Carmichael International Service
533 Glendale Boulevard
Los Angeles, CA 90026-5097

RE: U.S.-Caribbean Basin Trade Partnership Act; Subheading 9802.00.8044, HTSUSA; U.S. Note 3, subchapter XX, chapter 98, HTSUSA; U.S. Note 7, subchapter II, chapter 98, HTSUSA; 19 CFR 102.21(c)(2); women’s swimwear with control panel

Dear Ms. Saizan:

This is in response to your letter dated July 15, 2004, on behalf of your client, Fortune Swimwear LLC (“Fortune”), requesting a ruling on the classification, country or origin and eligibility of swimsuits under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”).

FACTS:

You have submitted two samples of women’s swimsuits. These garments are of one-piece construction with a short skirt covering an elasticized panty. The garments are identified as style H7010, submitted in a medium and plus size. The submitted samples are prototypes. You state the imported garment will be made of either 90% nylon and 10% spandex knit fabric, or 90% polyester and 10% spandex knit fabric.

You have presented two manufacturing scenarios for the garment which are as follows:

The shell fabric is knit in the United States using nylon filament yarns formed in Mexico and imported into the United States under HTS subheading 5402.41.90. The spandex yarns used in the production of the shell fabric are formed by extrusion, spinning or other processes in the United States. The material used in the creation of the spandex yarns is imported from non-Nafta countries. The underbody of the swim garment contains a midriff section of fabric which is identified as a “tummy control” panel. You state that this power net panel is made of 90% nylon and 10% spandex yarns and that the fabric weighs less than 7% of the entire fabric weight of the swimsuit.

Once the shell fabric is formed, it is sent to a fabric printer in the United States. Once the fabric is printed and finished, it is sent to a cutter in the United States where it is cut into the component pieces for the swimsuit Additionally, all of the other fabrics and components used in the formation of the garment are produced and cut in the United States. The components are bundled together and shipped to the Dominican Republic where they are sewn into garments and shipped back to the United States.

In the second scenario, the midriff power net panel, which comprises less than 7% of the overall weight of the garment, is made in either China or Korea of foreign materials. You ask if the garment, under both of these scenarios, is eligible for preferential treatment under CBPTA, 9802.00.8044, HTS.

UNITED STATES CARIBBEAN BASIN TRADE PARTNERSHIP ACT (CBTPA):

The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)).

Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination 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 implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.

The Dominican Republic was designated a beneficiary country by Presidential Proclamation 7351, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 10, 2000 (see 65 Fed. Reg. 60236).

The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUSA) are contained, for the most part, in subchapter XX, Chapter 98, HTSUSA (two provisions may be found in subheading 9802.00.80, HTSUSA). The regulations pertinent to the textile provisions of the CBTPA may be found at §§ 10.221 through 10.228 of the Customs Regulations (19 CFR §§10.221 through 10.228).

Section 213(b)(2)(A) of the CBERA, as amended, specifies the textile and apparel articles to which preferential treatment applies under the CBTPA during the transition period. Section 213(b)(2)(A)(i)(I) provides, in pertinent part, that preferential treatment applies to ---

Apparel articles sewn or otherwise assembled in one or more CBTPA beneficiary countries from fabrics wholly formed and cut or from components knit-to-shape in the United States from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the HTS and are wholly formed and cut in the United States) that are entered under subheading 9802.00.80 of the HTS;

Apparel articles entered on or after September 1, 2002, shall qualify under the preceding sentence only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are knit fabrics, is carried out in the United States. Apparel articles entered on or after September 1, 2002, shall qualify under the first sentence of this clause only if all dyeing, printing, and finishing of the fabrics from which the articles are assembled, if the fabrics are woven fabrics, is carried out in the United States.

Subheading 9802.00.8044, HTSUSA, provides as follows:

Articles . . . assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating and painting.

Articles for which duty free treatment is claimed under U.S. note 7(b)(i) to this subchapter:

U.S. Note 7(b)(i), Subchapter II, Chapter 98, HTSUSA, as recently amended by Presidential Proclamation 7626 of November 13, 2002 (67 Fed. Reg. 69459), provides that:

For purposes of heading 9802.00.80, duty-free treatment shall be accorded to the following articles imported directly from a beneficiary United States-Caribbean Basin Trade Partnership Act (CBTPA) country previously designated by the President in a proclamation issued pursuant to such Act and enumerated in general note 17(a) to the tariff schedule
apparel articles sewn or otherwise assembled in one or more such beneficiary countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States, from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of chapter 56 and are wholly formed and cut in the United States) provided they otherwise comply with the provisions of this note;

Articles otherwise eligible to enter under this heading, and which satisfy the conditions set forth in U.S. note 3 to subchapter XX of this chapter, shall not be ineligible to enter under this heading. Articles covered by the terms of this note shall be admitted into the customs territory of the United States free of quantitative limitations. Apparel articles entered on or after September 1, 2002, that are assembled in a beneficiary CBTPA country from knitted or crocheted fabrics or from woven fabrics shall be eligible to receive the duty treatment provided for in this note only if all dyeing, printing and finishing of such fabrics from which the articles are assembled is carried out in the United States. The following countries have been determined by the USTR to have satisfied the customs requirements of the CBTPA and, therefore, to be afforded the tariff treatment provided for in this note:

Barbados, Belize, Costa Rica, Dominican Republic, El Salvador, Guatemala, Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Saint Lucia, Trinidad and Tobago.

U.S. Note 3(d), subchapter XX, HTSUSA, provides that:

For purposes of U.S. note 7[(i) to subchapter II of this chapter and subheadings 9820.11.03, 9820.11.06, and 9820.11.18, an article otherwise eligible for preferential treatment under such subheadings shall not be ineligible for such treatment because the article contains nylon filament yarn (other than elastomeric yarn) classifiable under subheading 5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30, 5402.32.60, 5402.41.10, 5401.41.90, 5402.51.00 or 5402.61.00 of the tariff schedule that entered free of duty as a product of Israel under the terms of general note 8 to the tariff schedule or as a good of Canada or a good of Mexico under the terms of general note 12 to the tariff schedule.

The exception for nylon filament yarn from Mexico set forth in U.S. Note 3(d), subchapter XX, chapter 98, HTSUSA, applies to subheading 9802.00.8044, HTSUSA. Therefore, the use of Mexican nylon filament yarn would not render the swimwear ineligible for classification under that tariff provision. See Headquarters Ruling Letter HQ 562536, December 23, 2002

In the second scenario you presented, all of the above requirements are met. Your first scenario included foreign made fabric which you believed would be acceptable as it weighed less than 7% of the overall weight of the garment, thus satisfying the principle of “de minimis”.

U.S. Note 3(a)(iii), subchapter XX, HTSUSA, states that:

An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains: (iii) fibers or yarns not wholly formed in the United States or in one or more designated beneficiary countries enumerated in general note 17(a) to the tariff schedule, provided that the total weight of all such fibers and yarns is not more than 7% of the total weight of the article.

The note states “fibers or yarns”. Headquarters Ruling 964907, dated June 26, 2002, discusses the definition and application of the principle of “de minimus” and states the following:

The definition of de minimis upon which U.S. Customs relied in drafting the interim regulations is directly based upon the wording of the CBTPA legislation itself. As set forth by Congress and provided in the CBTPA legislation, (Title II, Subtitle B, Section 211, (b)(2)(A)(vii)(III)), the de minimis rule is specifically structured to utilize "the total weight of all such fibers or yarns." (H.R. 434-30, 31, 106th Cong. § 2 (2000)). The legislation specifically refers to the total weight of foreign fibers and yarns rather than the total weight of foreign fabrics for the de minimus rule. Therefore, in drafting the implementing regulations, Customs relied upon the plain wording of the legislation and used the total weight of the foreign fibers and yarns for the de minimis rulethis special rule is limited to fibers and yarns and cannot be extended to fabric.

Since the manufacturing processes in the first scenario involve using foreign fabric, the garment would not be eligible for preferential treatment in that instance.

In your letter you also ask for a determination on the classification and country of origin of the swimwear.

CLASSIFICATION:

The applicable subheading for swimsuits will be 6112.41.0010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for women’s or girls’ swimwear: Of synthetic fibers: Of fabric containing by weight 5 percent or more elastomeric yarn or rubber thread: Women’s. The general rate of duty will be 24.9% ad valorem.

The swimsuits fall within textile category designation 659. 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:

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, "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":

HTSUSA 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 swimwear is completely assembled in a single country, that is, the Dominican Republic, as per the terms of the tariff shift requirement, country of origin is conferred in the Dominican Republic.

HOLDING:

The swimsuits are classifiable under subheading 6112.41.0010, HTSUSA.

The country of origin of the swimwear is the Dominican Republic.

The garment, if made using spandex fabric formed in the United States, (second scenario), would be eligible for preferential treatment under 9802.00.8044, HTSUSA.

The swimwear if made with the foreign elastomeric fabric power net panel, (first scenario), would not be eligible for preferential treatment under CBTPA, 9802.00.8044, HTSUSA.

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 letters, either directly, by reference, or by implication, is accurate and complete in every material aspect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 646-733-3049.

Sincerely,

Robert B. Swierupski
Director,

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See also:

• Tariff No.: 5402.10.30 - Single high tenacity yarn of nylon or polyamides, not put up for retail sale
• Tariff No.: 5402.10.60 - Multiple (folded) or cabled high tenacity yarn (except sewing thread) of nylon or other polyamides, not put up for retail sale
• Tariff No.: 5402.31.30 - Single textured yarn, of nylon or other polyamides, measuring not more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.31.60 - Multiple or cabled textured yarn (except sewing thread), of polyamides, single yarn not more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.32.30 - Single textured yarn, of nylon or other polyamides, measuring more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.32.60 - Multiple or cabled textured yarn (except sewing thread), of polyamides, single yarn more than 500 decitex, not put up for retail sale
• Tariff No.: 5402.41.10 - Synth filament yarn, for doll wigs, of colored multifil, untwisted/with twist < 5 turns/meter, of nylon or other polyamide, not retail sale
• Tariff No.: 5402.41.90 - Syn filament yarn (not for doll wigs), of colored multifil, untwisted/with twist < 5 turns/meter, of nylon or o/polyamides, not retail sale
• Tariff No.: 5402.51.00 - Nylon or other polyamide yarns, single, with a twist exceeding 50 turns/m, not put up for retail sale
• Tariff No.: 5402.61.00 - Nylon or other polyamide yarn, multiple (folded) or cabled, (except sewing thread), not put up for retail sale
• Tariff No.: 6112.41.00 - Women's or girls' knitted or crocheted swimwear of synthetic fibers
• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9820.11.03 - CBTPA goods: Apparel article of chapter 61/62 assembled one or more CBTPA country under certain conditions from fabrics formed and cut in US
• Tariff No.: 9820.11.06 - CBTPA goods: Apparel articles cut in one or more CBTPA from US formed fabric of US formed yarn assembed in CBTPA with US yarn
• Tariff No.: 9820.11.18 - CBTPA goods: Knitted or crocheted apparel, cut and assembled in one or more CBTPA from US fabric of US yarn if assembly with US thread