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NY L85314




June 24, 2005

CLA-2-61:RR:NC:TA:361 L85314

CATEGORY: NAFTA

Mr. Tom Gould
Zisser Group
3807 W. Sierra Hwy., 4420
Acton, CA 93510

RE: Eligibility under the North American Free Trade Agreement (NAFTA), of a woman’s garment and a girl’s garment from Mexico; Article 509

Dear Mr. Gould:

This is in reply to your letter dated May 31, 2005 requesting a ruling on the eligibility under the North American Free Trade Agreement (NAFTA), of a woman’s garment and a girls’ garment from Mexico on behalf of L’Koral Industries. As requested, the submitted samples will be returned.

FACTS:

Style A3341D-BGD, is a woman’s top constructed from 100 percent polyester knit fabric with a 100 percent polyester knit fabric lining. The fully lined top has ¼ inch shoulder straps, a V-shaped neckline in front, and overlock stitching finishing the bottom. The upper back extends straight across from side seam to side seam. We agree with your proposed classification of 6114.30.1020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The outer fabric of this garment is made in the United States from US fibers and yarns. The lining fabric is made in Taiwan, from fibers and yarns produced in Taiwan. Both types of fabric are cut into components in the United States, then fully assembled in Mexico.

Style E3569-H1062 is a girl’s pullover constructed from two different knit fabrics. The main portion of the garment is constructed from 100 percent cotton rib knit fabric (dark blue) with more than nine stitches per two centimeter, measured in the horizontal direction. The second fabric is constructed from 100 percent cotton jersey fabric (light blue) with more than nine stitches per two centimeters, measured in the horizontal direction. The pullover has a hood with a drawstring, short sleeves, and a hemmed bottom. The hood and approximately 2/3 of the front and back panels are made from the dark blue rib knit fabric. The sleeves, a small panel in the V-neckline, and approximately 1/3 of the front and back panels are made from the light blue jersey knit fabric. We agree with your proposed classification of 6110.20.2075, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The dark blue rib knit fabric is made from fibers produced in the United States, spun into yarn in the United States, and knit into fabric in the United States. The yarn and knit light blue fabric are made in Indonesia. Both fabrics are cut into components in the United States and fully assembled in Mexico.

ISSUE:

What is the eligibility under the North American Free Trade Agreement (NAFTA) of the subject merchandise?

ELIGIBILITY UNDER THE NAFTA:

General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-- (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or

(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--

(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or

(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.

Based on the facts provided, style A3341D-BGD qualifies for NAFTA preferential treatment, because it will meet the requirements of HTSUSA General Note 12(b)(ii)(A). Style A3341D-BGD will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

Style E3569-H1062 does not qualify for preferential treatment under the NAFTA because none of the above requirements are met. You have stated that this style should qualify based on rule 2 to chapter 61 of General Note 12(t). That rule states, in pertinent part: For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good, and such component must satisfy the tariff change requirements set out in the rule for that good.

A similar issue was discussed in ruling HQ 561892 of August 30, 2002. In that ruling, the following analysis was provided: In the instant case, as indicated above, each of the above-mentioned hockey jerseys is classified by application of GRI 1 in heading 6110. Therefore, there is no need to employ an essential character analysis to classify the jerseys. Accordingly, the above-mentioned chapter rule 2 has no application in the instant case.

As discussed above, in order for the hockey jerseys to be eligible for preferential tariff treatment under General Note 12 by application of the tariff-shift rule for heading 6110, each of the non-originating materials used in the production of the good must undergo the required change in tariff classification. Upon review, one finds that the non-originating fabric in each jersey does not satisfy the required change in tariff classification because the non-originating fabric comes from an excepted heading, i.e., 6002.

Similarly, in this case, each of the cotton fabrics of style E3569-H1062 must undergo the change indicated in rule 35, Chapter 61, General Note 12(t) which states: A change to headings 6109 through 6111 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Since the light blue fabric, classified in headings 6001-6006, was made in Indonesia, the light blue fabric does not undergo the required change in tariff classification, therefore, the garment does not qualify as NAFTA originating.

Style E3569-H1062 may be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, Additional U.S. Note 3(b) or 3(c), up to the annual quantities specified in subdivision (g) of Note 3. Upon completion of the required documentation and up to the specified annual quantities, style E3569-H1062 may be eligible for the Free preferential rate of duty.

HOLDING:

Style A3341D-BGD qualifies for preferential treatment under General Note 12; style E3569-H1062 does not qualify for preferential treatment under General note 12, however, it may be subject to Tariff Preference Level described in Section XI, Additional U.S. note 3(b) or 3(c) if the required documentation is provided, up to the specified annual quantities.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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