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NY K88210




August 25, 2004
CLA-2-RR:NC:TA:361 K88210

CATEGORY: CLASSIFICATION

Ms. Stacy Bauman
American Shipping Company, Inc.
140 Sylvan Avenue
Englewood Cliffs, NJ 07632

RE: Classification and country of origin determination for women’s knit garments; Duty-Free treatment for products of the West Bank, Gaza Strip, or a Qualifying Industrial Zone; General Note 3(a)(v).

Dear Ms. Bauman:

This is in reply to your letter dated August 3, 2003, submitted on behalf of your client Dress Barn Inc. Your request concerns the classification, and eligibility for preferential duty treatment for a garment that may be produced, in part, in a Qualifying Industrial Zone (QIZ).

FACTS:

The cardigan, style 6528, is constructed from 52 percent cotton, 48 percent polyester knit fabric. The garment has a hood with a drawstring and woven satin trim, a full front opening with a zipper closure, long hemmed sleeves, side seam pockets below the waist, and a plain, hemmed bottom. The fabric of the garment has more than nine stitches per two centimeters measured in the horizontal direction.

The pants, style 6529, are constructed from 52 percent cotton, 48 percent polyester knit fabric. The pants have an elasticized waistband with a drawstring, side seam piping, and hemmed leg openings.

You have indicated in your letter that the fabric is a blend of 52% cotton and 48 percent polyester. Garments which are claimed to be constructed from such a blend are subject, upon importation, to laboratory analysis by the U.S. Customs Service to verify the actual weight of the component fibers. Please be advised that a slight variation from the above stated fiber content may affect the classification and the textile category designation of the subject garment.

You have indicated that the garment will be produced either in Jordan or in an approved “Qualifying Industrial Zone.” The manufacturing operations for the cardigan and pants will be done in accordance with one of the following scenario:

SCENARIO A

Taiwan
Fabric for the body of the garment is knit Piping and hood trim fabric is woven
Drawstring fabric is woven and cut to length

QIZ
Body fabric is cut into components
Elastic is knit
All trim fabric (piping, elastic) is cut
All assembly of the garments is completed All finishing operations are completed.

SCENARIO B
Scenario B is identical to Scenario A, except that in Scenario B, the drawstrings are fully manufactured in Taiwan, that is, the fabric is cut, the length knotted, and a metal toggle is attached.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for style 6528 will be will be 6110.20.2075, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Sweatersand similar articles, knitted or crocheted: Of cotton: Other: Women’s or girls’. The general rate of duty is 16.5% ad valorem.

The applicable subheading for style 6529 will be will be 6104.62.2011, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Women’strousersknitted or crocheted: Of cotton. The general rate of duty is 14.9% ad valorem.

Style 6528 falls within textile category designation 339; style 6529 falls within textile category designation 348. 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.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.

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 indicated that the goods will be produced in a formally 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 industrial zone.

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. If the good is not knit to shape and does not consist of two or more component parts, a change to heading 6101 through 6117 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5806, 5809 through 5811, 5903, 5906 through 5907, and 6001 through 6002, and subheading 6307.90, and provided that the change is the result of a fabric-making process. If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.

The subject garments will be classified within the above noted range. Under both scenarios, as the garments are wholly assembled in Jordan, as per the terms of the tariff shift requirement, country of origin is conferred in 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, provided certain requirements are met. Such treatment was effective for products of the West Bank, Gaza Strip or a qualifying industrial zone 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 qualifying industrial zone which are imported directly to the U.S. from the West Bank, Gaza Strip, a qualifying industrial zone 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 qualifying industrial zone or Israel, plus 2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a qualifying industrial zone or Israel, is not less than 35% of the appraised value of such articles when imported into the U.S. An article is considered to be a product of the West Bank, Gaza Strip or a qualifying industrial zone 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.

Based upon the above production information, the garments meet the country of origin requirements in the West Bank, Gaza Strip or a qualifying industrial zone, specifically, in Jordan, under the applicable rules of origin for textiles, it would be considered a product of the West Bank, Gaza Strip or a qualifying industrial zone, specifically Jordan.

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--

(1) they are shipped directly from West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States with out passing through the territory of any intermediate country;

Based upon the facts presented, it appears that the garments will satisfy this requirement.

We are unable to state definitively that the garments will or will not satisfy the 35% value content requirement. Whether the requirement is satisfied can only be ascertained when the "appraised value" of the garments is determined at the time of entry into the United States.

HOLDING:

Based on the information provided, the garments will be considered a product of Jordan. If the garments are produced in an approved Qualifying Industrial Zone, the garments will be considered to be products of the West Bank or Gaza Strip or qualifying industrial zone, and will be eligible for preferential duty treatment under General Note 3(a)(v), HTSUS, assuming that they are imported directly from the West Bank, Gaza Strip, or Israel, and the 35 percent value content requirement is satisfied. Again, whether the 35% value content requirement will be met must await actual entry of the merchandise.

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 sections 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 Angela De Gaetano at 646-733-3052.

Sincerely,

Robert B. Swierupski
Director,

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