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NY L88486





November 14, 2005

CLA2-RR:NC:TA:349 L88486

CATEGORY: CLASSIFICATION

Mr. Kirit D. Patel
Venus Textiles
25861 Wright Street
Foothill Ranch, CA 92610

RE: Classification and country of origin determination for sheet sets; Products of the West Bank, the Gaza Strip or a Qualifying Industrial Zone; General Note 3(a)(v): 19 CFR 102.21(c)(2); tariff shift

Dear Mr. Patel:

This is in reply to your letters dated October 21 and October 28, 2005, requesting a classification and country of origin determination for sheet sets that will be imported into the United States. You state in your letters that the manufacturing operations in Egypt will occur in one of the Qualifying Industrial Zones (QIZ) of Alexandria, Greater Cairo or the Suez Canal.

FACTS:

The subject merchandise consists of bed sheet sets. Each set, which will be packaged for retail sale in a vinyl bag, will contain a flat sheet, fitted sheet and two pillowcases. The sets will be made from 100 percent cotton or 55 percent cotton and 45 percent polyester woven fabric. The fabric will be of sateen, twill or plain weaves, will not be napped and may be dyed or printed. You have submitted five pillowcases as representative samples of the five different hem treatments that will appear on the flat sheet and pillowcases in each set. The fitted sheets will be plain. Sample A has a faced hem at the open end of the pillowcase. A decorative stitch (sometimes referred to as a hemstitch or picot stitch) is sewn along the lower edge of the hem. The stitching holds open a series of small holes punched in the fabric. As this stitching is sewn over a finished hem it is considered embroidery.

The hem on Sample B is a plain turned-up hem held with a single row of stitching. An approximately 2.5 inch wide strip of jacquard trimming is sewn to the pillowcase along the hem. A row of decorative picot stitching is sewn along both sides of this overlaid trim. A sheet set made with this hem treatment would contain embroidery and trimming. The hem on Sample C consists of two strips of fabric. A strip of embroidered and openwork trimming is inserted between the body of the pillowcase and what would have been a turned over top hem. The edge on Sample D is simply folded and sewn creating a four-inch wide turned-up hem. It does not contain any embroidery trimming or other decorative features. The hem on Sample E consists of a folded strip of embroidered fabric sewn to the body of the pillowcase.

You have presented two manufacturing scenarios. The manufacturing operations for the sheet sets are as follows:

Scenario 1:
EGYPT (Qualifying Industrial Zone):
-fabric is woven and dyed or printed.
-fabric is cut and sewn creating the pillowcases, flat and fitted sheets. -pillowcases and sheets are packaged for retail sale and shipped.

Scenario 2:
EGYPT (Qualifying Industrial Zone):
-fabric is woven.
-greige fabric is shipped to China, India or Pakistan.

CHINA, INDIA or PAKISTAN:
-fabric is dyed or printed.
-fabric is cut and sewn creating the pillowcases, flat and fitted sheets. (cutting and sewing will occur in the same country as dying or printing) -pillowcases and sheets are packaged for retail sale and shipped.

ISSUE:

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

CLASSIFICATION:

The bed sheet sets made with hem treatments A, B, C and E meet the qualifications of "goods put up in sets for retail sale". The components of the sets consist of at least two different articles which are, prima facie, classifiable in different subheadings (decorated pillowcases, decorated flat sheet and a plain fitted sheet). They are put up together to meet a particular need or carry out a specific activity and they are packed for sale directly to users without repacking. The sets will be classified under the subheading that imparts the essential character. The decorated components impart the essential character of the sets. The sheet sets made with the simple D hem treatment do not meet the qualifications of “goods put up in sets for retail sale” as the components of the sets are classifiable within the same subheading. Therefore, each item in these plain sets will be classified separately.

The applicable subheading for the printed Sample D pillowcases will be 6302.21.9010, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not napped pillowcases other than bolster cases. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the dyed Sample D pillowcases will be 6302.31.9010, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen: of cotton: other: not napped pillowcases other than bolster cases. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the printed Sample D flat and fitted sheets will be 6302.21.9020, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: other: not napped sheets. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the dyed Sample D flat and fitted sheets will be 6302.31.9020, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen: of cotton: other: not napped sheets. The general rate of duty will be 6.7 percent ad valorem.

The applicable subheading for the printed and embellished Sample A, B, C and E bed sheet sets will be 6302.21.5020, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen, printed: of cotton: containing any embroidery, lace, braid, edging, trimming, piping or appliqué work: not napped sheets. The general rate of duty will be 20.9 percent ad valorem.

The applicable subheading for the dyed and embellished Sample A, B, C and E bed sheet sets will be 6302.31.5020, HTSUSA, which provides for bed linen, table linen, toilet linen and kitchen linen: other bed linen: of cotton: containing any embroidery, lace, braid, edging, trimming, piping or appliqué work: not napped sheets. The general rate of duty will be 20.9 percent ad valorem.

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.

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." You did not indicate where the cotton was grown or the polyester was sourced for scenario 1. We cannot therefore conclude that the scenario 1 operation occurred wholly in Egypt. As the subject merchandise for both scenarios 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

6301-6306 Except for goods of heading 6302 through 6304 provided for in paragraph (e)(2) of this section, the country of origin of a good classifiable under heading 6301 through 6306 is the country, territory or insular possession in which the fabric comprising the good was formed by a fabric making process.

Subheadings 6302.21 and 6302.31 are not included in the paragraph (e)(2) exception to the above tariff shift rule. As the fabric comprising the sheets and pillowcases is formed in a single country, that is, Egypt, as per the terms of the tariff shift requirement, country of origin is conferred in Egypt for both scenario 1 and 2.

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 sheet sets in scenario 1 are woven, dyed or printed, cut and sewn in one of the Egyptian Qualifying Industrial Zones, namely Alexandria, Greater Cairo or the Suez Canal. The sheet sets meet the country of origin requirements in the West Bank, Gaza Strip or a qualifying industrial zone, specifically, in Egypt, under the applicable rules of origin for textiles and are considered to be a product of the West Bank, Gaza Strip or a qualifying industrial zone. The sheet sets in scenario 2 have also been determined to be a product of Egypt however; they are not imported directly into the United States.

With respect to the requirement that the articles be imported directly, General Note 3(a) (v)(B) (1) provides in pertinent part 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;

The sheet sets in scenario 2 are not imported directly into the United States and in addition, are subject to major processing operations in another country. The sheet sets in scenario 2 do not qualify for preferential treatment.

We are unable to state definitively that the sheet sets in scenario 1 will or will not satisfy the 35 percent value content requirement. Whether the requirement is satisfied can only be ascertained when the "appraised value" of the sheet sets is determined at the time of entry into the United States.

HOLDING:

The country of origin of the sheet sets in both manufacturing scenarios is Egypt. If the scenario 1 sheet sets are produced in an approved Qualifying Industrial Zone, they will be considered to be products of the West Bank, Gaza Strip or QIZ and will be eligible for duty free treatment under General Note 3(a)(v), HTSUS, assuming that they are imported directly from the West Bank, Gaza Strip, QIZ or Israel, and the 35 percent value content requirement is satisfied. The scenario 2 sheet sets are not eligible for preferential treatment.

The pillowcases fall within textile category designation 360 and the sheets fall within textile category designation 361. 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.cbp.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.

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 John Hansen at 646-733-3043.

Sincerely,

Robert B. Swierupski
Director,

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