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NY K89472




September 21, 2004

CLA2-61:RR:NC:TA:359:K89472

CATEGORY: CLASSIFICATION

Ms. Hannah Chan
Business Faith International, Ltd.
A8 & A13 7/F, Blk A
Hong Kong Industrial Centre
No. 489-491 Castle Peak Road
Kowloon, Hong Kong

RE: Classification and country of origin determination for women’s knitwear; United States - Israel Free Trade Agreement: Products of the West Bank, the Gaza Strip and Irbid, Jordan, Qualifying Industrial Zone; General Note 3(a)(v), Harmonized Tariff Schedule of the United States (HTS);19 CFR 102.21(c)(4); TD 98-62.

Dear Ms. Chan:

We are replying to your letter dated September 1, 2004, in which you request a classification and country of origin determination for women’s knitwear that will be imported into the United States. You have submitted a sample identified as style xxxEVE467.

FACTS:

The subject merchandise consists of a woman’s knitted cardigan. The cardigan is identified as style xxxEVE467. It is made of 95% cotton and 5% spandex knit fabric with more than 9 stitches per 2 centimeters in the horizontal direction. The garment features a full frontal opening with a zippered closure, a straight banded bottom which provides no tightening, two pockets at the waist along the princess seams, long loosely cuffed sleeves, a hood with a drawstring in lieu of a collar, and letter appliqués affixed to the front panels of the cardigan.

Two scenarios for manufacturing the garments have been presented. In the first scenario the garment is manufactured in China and the Commonwealth of the Northern Mariana Islands (CNMI). In the second scenario the garment is manufactured in China and the Irbid Qualifying Industrial Zone (QIZ), in Jordan. In both instances, the garment, after completion in either the QIZ or CNMI, will be shipped directly to the United States. The manufacturing steps for both sets of countries are identical, therefore, we will list them once as follows:

CHINA:

The fabric is cut into component parts (hood, front-left and right, back panels, both sleeves, left and right side seam panels, left and right cuffs, bottoms). The double layer hood is sewn
The eyelets are sewn to the front of the hood The drawstring is finished
The letter appliqués are applied to the front panels The pockets are sewn to the left and right front panels The side seam panel is sewn to the left and right front panels The zipper tape is sewn
The rib cuffs are sewn to the right and left sleeves and the underarm is partially sewn, enough to accommodate the cuff The rib bottom is sewn

IRBID QIZ (JORDAN) OR CNMI:

The front and back panels are sewn at the shoulders The hood is attached to the body of the garment The labels are sewn to the neckline
The neck tape is sewn to the neckline
The zipper is attached to the body of the garment The side seams are sewn to the back panels, closing the sides of the garment The sleeves are attached to the garment
The edges of the armholes are sewn
The label is sewn to the princess seam

ISSUES:

What are the classification and country of origin of the subject merchandise? Whether the subject apparel articles, produced in the Irbid QIZ as described above, will qualify for duty-free treatment under General Note 3(a)(v), HTSUS, when imported into the U.S?

CLASSIFICATION:

The applicable subheading for the woman’s knitted cardigan, Style xxxEVE467, will be 6110.20.2075, Harmonized Tariff Schedule of the United States (HTS), which provides for sweaters, pullovers --- and similar articles, knitted or crocheted: of cotton, other: other: other: women’s or girls’. The general rate of duty will be 16.5% ad valorem.

The cotton cardigan, style xxxEVE467, falls within textile category designation 339. 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:

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.

You stated that the processing operations for Jordan, were performed in the Irbid Qualifying Industrial Zone (QIZ). General Note 3(a)(v)(G), HTSUS, 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."

By letters dated June 30, 1997 and July 1, 1997, to the U.S. Trade Representative, the Governments of Jordan and Israel, respectively, requested the designation of the industrial zone in Irbid, Jordan, as a QIZ. Pursuant to subsequent consultations among the three Governments, the Governments of Israel and Jordan entered into a written agreement dated November 16, 1997, relating to the establishment of the Irbid QIZ, which included the following provision, entitled "Rules of Origin":

“The [Governments of Israel and Jordan] agree that the origin of any textile or apparel product that is processed in the Irbid Qualifying Zone, regardless of the origin or place of processing of any of its inputs or materials prior to entry into, or subsequent withdrawal from, the zone, will be determined solely pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay Rounds Act, 19 U.S.C.§ 3592.”

By notice published in the Federal Register on March 13, 1998 (63 FR 12572), the Office of the U.S. Trade Representative formally designated the Israeli-Jordanian Irbid Qualifying Industrial Zone as a QIZ. Treasury Decision 98-62, published in the Federal Register on June 26, 1998 (63 FR 34960), 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 the Irbid QIZ.

Section 102.21, 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.

Section 102.21(e) states that the good must be completely assembled in a single country, territory or insular possession.. Accordingly, as the cardigan does not meet those requirements, 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 to shape, 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 panels at the shoulders, attaching the hood, attaching the zipper, sewing the side seams closed and attaching the sleeves constitute the most important assembly processes. Accordingly, the country of origin of the cardigan is Jordan or CNMI.

In your request, you asked if the same ruling would apply to the garment if the fiber content were changed to 100% cotton, or 100% polyester or various fiber blends. Although the classification of the garment could change, these changes in fiber content would not affect the country of origin determination.

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 8, HTSUS, products of a qualifying industrial zone (QIZ) are eligible, when imported into the United States, for the "special" rate of duty set forth in the tariff schedule if the article is imported directly from the QIZ into the customs territory of the United States and if all other statutory requirements are met. The "special" duty rate for the two submitted garments under consideration is Free.

Under General Note 3 (a) (v), HTS, articles that are the products of the West Bank, Gaza Strip or a QIZ which are imported directly to the United States from the West Bank, Gaza Strip, a QIZ or Israel, qualify for duty free treatment provided that i) the sum of (a) the cost or value of materials produced in the West Bank, the Gaza Strip, a QIZ or Israel plus (b) the direct costs of processing operations performed in the West Bank, the Gaza Strip, a QIZ or Israel is not less than 35 percent of the appraised value of such articles when imported into the United States.

Regarding 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 the West Bank, the Gaza Strip, a QIZ, or Israel into the United States without passing through the territory of any intermediate country.

In your submission you have noted that this merchandise will be imported directly from the Irbid QIZ, Jordan into the United States. We note that we cannot ascertain whether or not the 35 percent value requirement is met until the appraised value of the merchandise is established. This will occur at the time of the entry of the merchandise into the United States.

HOLDING:

The country of origin of style xxxEVE467 is Jordan or CNMI. Based upon international textile trade agreements products of Jordan are not subject to quota or the requirement of a visa. Since the CNMI is not a foreign country and therefore, the United States has no quota or visa agreement with it, the garments are not subject to quota restraints and do not require a visa.

Based upon the information submitted for the manufacturing processes between China and Irbid, Jordan, the garments are considered products of the Irbid, QIZ, Jordan and are eligible for preferential duty treatment under General Note 3 (a) (v), HTS, provided that they are imported directly from Jordan and the 35 percent value requirement is satisfied.

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 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 CFR 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 CFR 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 646-733-3049.

Sincerely,

Robert B. Swierupski
Director,

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