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NY L85589




July 11, 2005

CLA-2-RR:NC:TA:N3:356 L85589

CATEGORY: CLASSIFICATION

Mr. Arlen T. Epstein
DC Williams & Associates
470 Park Avenue South
New York, NY 10016

RE: Classification and country of origin determination for a men’s woven shirt; Products of the West Bank, the Gaza Strip or a qualifying industrial zone; General Note 3(a)(v); 19 CFR 102.21(c)(4); most important assembly; T.D. 98-62.

Dear Mr. Epstein:

This is in reply to a letter dated June 10, 2005, on behalf of Kindnoon Offshore Trading Co., Ltd., concerning a classification and country of origin determination for a men’s woven shirt that will be imported into the United States. You state that the manufacturing operations will occur in China and either in the country of Jordan proper (Scenario 1) or in a Qualifying Industrial Zone (QIZ) in Jordan (Scenario 2). You have provided a sample of the partially assembled garment as it leaves China and a sample of the finished garment as it will be imported from Jordan or from the QIZ into the United States. Your samples will be returned, as requested.

FACTS:

The submitted sample, item number 340, is a men’s shirt constructed from 65 percent cotton, 35 percent polyester, woven fabric that has two or more colors in the warp and/or the filling. The garment has a point collar; a left over right, full front opening with a button at the neckline and six snap closures; long sleeves with a snap on the sleeve placket and three snaps on the sleeve cuffs; two patch pockets with flaps and snap closures on the chest; front and rear overlaid yokes; and a curved, hemmed bottom. The submitted sample is in size “Large Tall.”

The manufacturing operations for the submitted sample are as follows:

CHINA:

- The fabric is formed and cut into component parts - The pockets are formed and the pockets and pocket flaps are attached - The sleeve cuffs are formed and placed in the pockets for later assembly - The collar and placket are formed
- The placket is attached to the front panel - The front and back yokes are attached
- The front and back panels are joined at the shoulders - The sleeve placket is formed
- The snap closures are attached

JORDAN (Scenario 1) OR A QUALIFIED INDUSTRIAL ZONE (Scenario 2):

- The collar is attached
- The sleeves are attached to the front and back panels - The cuffs are attached
- The side seams are sewn
- The bottom is hemmed
- The garment is washed, pressed and packed for export directly to the U.S.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the submitted sample will be 6205.20.2050, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for men’s or boys’ shirts, of cotton: other: other: other: with two or more colors in the warp and/or the filling: other: men’s. The general rate of duty is 19.7 percent ad valorem.

The submitted sample falls within textile category designation 340. 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.cpb.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.

You state that the processing operations will be performed either in the country of Jordan proper (Scenario 1) or in a Qualifying Industrial Zone (QIZ) (Scenario 2). 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.” Since a determination has not been made by your client as to where the final processing will occur, we will assume, for the purposes of this letter, that the QIZ will meet the requirements of General Note 3(a)(v)(G), HTSUS.

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

6201-6208 If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

Although the garment 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.

Since the garment 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, the assembly processes occurring either in the country of Jordan proper (Scenario 1) or in a Qualified Industrial Zone (Scenario 2), consisting of the attachment of the collar, the attachment of the sleeves, the attachment of the cuffs, and the joining of the side seams constitute the most important assembly processes.

Accordingly, under Section 102.21 (c)(4), the country of origin of the submitted garment in Scenario 1 and Scenario 2 is Jordan, 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 (QIZ), 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;

You have stated in your letter that the garments in Scenario 2 will be imported directly from the Qualifying Industrial Zone to the United States and that the 35% value content requirement will be met. It cannot be ascertained whether the value 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 the submitted garment in Scenario 1 and Scenario 2 is Jordan. Based upon international textile trade agreements, products of Jordan are not presently subject to visa requirements or quota restraints.

Based upon the information submitted, the garments in Scenario 2 will be considered a product of the Qualified Industrial Zone and will be eligible for preferential duty treatment under General Note 3 (a)(v), HTSUS, assuming that the garments are imported directly from the Qualified Industrial Zone 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 Specialist Division


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