NY L81663 - Classification and country of origin determination for a men’s knit garment; Products of the West Bank, the Gaza Strip or a qualifying industrial zone; General Note 3(a)(v); United States - Israel Free Trade Agreement; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21 (c)(4); most important assembly; T.D. 98-62. - United States International Trade Commision Rulings

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NY L81663

January 27, 2005

CLA-2-RR:NC:TA:N3:356 L81663

CATEGORY: CLASSIFICATION

Mr. Ego Leung
Come Long Fashion Knits Ltd.
2/F., Yick Shiu Industrial Building
No. 1, San On Street
Tuen Mun, N.T., Hong Kong

RE: Classification and country of origin determination for a men’s knit garment; Products of the West Bank, the Gaza Strip or a qualifying industrial zone; General Note 3(a)(v); United States - Israel Free Trade Agreement; 19 CFR 102.21(c)(2); tariff shift; 19 CFR 102.21 (c)(4); most important assembly; T.D. 98-62.

Dear Mr. Leung:

This is in reply to your letter dated December 28, 2004, concerning a classification and country of origin determination for men’s knit garments that will be imported into the United States. You state that the manufacturing operations will occur in China and the Al-Tajamouat Industrial City, Jordan. You described three manufacturing scenarios and, for each scenario, you provided a sample of the partially assembled garment in the condition in which it leaves China, as well as a sample of the finished garment as it will be imported into the United States.

FACTS:

Style 0300001 is a men’s dyed T-shirt that is constructed from 100 percent cotton, tubular knit, jersey fabric that measures 27 stitches per 2 centimeters counted in the horizontal direction. For classification purposes, we will assume that the fabric weight is 200 grams per square meter or less. Style 0300001 features a rib knit crew neckline; short, hemmed sleeves; and a straight, hemmed bottom.

The manufacturing operations for Style 0300001 are as follows:

CHINA:
The fabric is cut into component parts
The shoulder seams are sewn closed
The rib knit neckband and neck tape are attached The bottom is hemmed
The sleeve components are hemmed

AL-TAJAMOUAT INDUSTRIAL CITY, QIZ, JORDAN: The underarm sleeve seams are sewn closed The sleeves are attached to the body of the garment The neck label is attached
The garments are inspected, ironed and packed for export to the U. S.

CHINA:
The fabric is cut into component parts
The shoulder seams are sewn closed
The rib knit neckband and neck tape are attached

AL-TAJAMOUAT INDUSTRIAL CITY, QIZ, JORDAN: The bottom is hemmed
The sleeve components are hemmed
The underarm sleeve seams are sewn closed The sleeves are attached to the body of the garment The neck label is attached
The garments are inspected, ironed and packed for export to the U. S.

CHINA:
The fabric is cut into component parts
The bottom is hemmed
The sleeve components are hemmed
The underarm sleeve seams are sewn closed

AL-TAJAMOUAT INDUSTRIAL CITY, QIZ, JORDAN: The shoulder seams are sewn closed
The rib knit neckband and neck tape are attached The sleeves are attached to the body of the garment The neck label is attached
The garments are inspected, ironed and packed for export to the U. S.

ISSUE:

What are the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for Style 0300001 will be 6109.10.0012, Harmonized Tariff Schedule of the United States, (HTS), which provides for T-shirts, singlets, tank tops and similar garments, knitted or crocheted: of cotton: men’s or boys’: other: other T-shirts: men’s. The rate of duty is 16.5 percent ad valorem.

Style 0300001 falls within textile category designation 338. Quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information as to whether quota and visa requirements apply to this merchandise, we suggest that you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” available at our web site at www.cpb.gov. In addition, you will find current information on textile import quotas, textile safeguard actions and related issues at the web site of the Office of Textiles and Apparel, at otexa.ita.doc.gov.

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.

You state that the processing operations in Jordan are performed in the Al-Tajamouat Industrial City, Jordan. By a notice published in the Federal Register on October 15, 1999, (64 FR 56015), pursuant to section 9 of the U.S. – Israel Free Trade Area Implementation Act and General Note 3 (a)(v)(G)(3), HTSUS, the Office of the United States Trade Representative designated the Al-Tajamouat Industrial City as a Qualifying Industrial Zone (QIZ). The QIZ encompasses certain areas under the customs control of the Governments of Israel and Jordan.

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.” Thus, effective on the date of publication of the above notice, goods produced in the Al-Tajamouat QIZ that meet all the conditions and requirements of General Note 3(a)(v), HTSUS, are entitled to duty free treatment.

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 a 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.

Paragraph (b) (6) defines “wholly assembled” as:

The term “wholly assembled” when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets) will not affect the status of a good as “wholly assembled” in a single country, territory, or insular possession.

For Version “C”, the submitted garment is not knit to shape and consists of two or more parts. As all of the assembly operations (joining the shoulders, attaching the neckband, and attaching the sleeves) in Version “C” occur in Jordan, the garments are considered “wholly assembled” in a single country, that is, Jordan. As per the terms of the tariff shift requirement, country of origin in Version “C” is conferred in Jordan.

For Versions “A” and “B”, although the garment is not knit to shape and consists of two or more component parts, it is not wholly assembled in a single country, territory or insular possession. Accordingly, as the terms of the tariff shift are not met, 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”:

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

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.

For Versions “A” and “B”, since the shirt 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 Versions “A” and “B,” the assembly processes in China consisting of the joining of the shoulders and the attachment of the rib knit neckband constitute the most important assembly processes.

Accordingly, under Section 102.21 (c)(4), the country of origin of the garment in Versions “A” and “B” is China, the country in which the most important assembly processes occur.

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 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 the sum of (1) the cost or value of materials produced in the West Bank, Gaza Strip, or 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 United States. An article is considered to be a product of the West Bank, Gaza Strip, or 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: (1) 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;

It cannot be ascertained whether the 35% value content requirement is met until the “appraised value” of the merchandise is determined at the time of entry into the United States.

HOLDING:

The country of origin of Style 0300001 in Versions “A” and “B” is China under Section 102.21 (c)(4). The country of origin of Style 0300001 in Version “C” is Jordan under Section 102.21(c)(2). Based upon international textile trade agreements, products of Jordan are not subject to visa requirements or quota restraints.

Based upon the information submitted, the garments will be considered a product of the Al-Tajamouat Industrial City, QIZ, Jordan and will be eligible for preferential duty treatment under General Note 3 (a)(v), HTSUS, assuming that the garments are imported directly from the QIZ, Jordan to the United States and the 35% value content requirement is satisfied. A determination will be made at the time of entry of the merchandise into the United States, whether the above requirements are met.

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 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 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 Mary Ryan at 646-733-3271.

Sincerely,

Robert B. Swierupski
Director,
National Commodity

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