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HQ 967943

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January 5, 2006

CLA-2 RR:CTF:TCM 967943 KSH

CATEGORY: CLASSIFICATION

TARIFF NO.: 6203.42.4010; 6204.62.4010

Hector Hernandez
Eagle Global Logistics
1801 N.W. 82 Avenue
Miami, FL 33126-1013

RE: U.S. Caribbean Basin Trade Partnership Act; subheading 9820.11.06

Dear Mr. Hernandez:

This is in response to your letter dated September 14, 2005, on behalf of your client, Koramsa Corporation, requesting a ruling on the eligibility of certain apparel under the Caribbean Basin Trade Partnership Act (CBTPA).

FACTS:

Your client proposes to make trousers under the following two scenarios:

Scenario A: For style numbers 175040222, 175077490022540225, 175042323, 175230222, 175230225, 175280222, 175280225 and 175282323, U.S. origin fabric from U.S. origin yarn is exported to Guatemala. The lining fabric is sent in rolls to a facility in Guatemala where it is printed by a silk-screening process. In Guatemala, the fabric is cut into components and sewn into garments. The competed garments are washed and packed in Guatemala. The finished trousers are then exported to the United States.

Scenario B: For style numbers WF16J04 and WF16F02, U.S. fabric from U.S. origin yarn is shipped to Guatemala where it is cut into components. The waistband, shell and back pockets are screen printed at a separate facility in Guatemala. The cut components are then assembled into garments. The completed garments are washed and packed. The finished trousers are exported to the United States.

Samples of blue denim components that had been screen-printed were submitted.

ISSUE:

Whether the apparel articles produced as described above, would qualify for preferential treatment under the CBTPA.

LAW AND ANALYSIS:

The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty-free and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)).

Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.

Guatemala was designated a beneficiary country by Presidential Proclamation 7351 of October 2, 2000, published in the Federal Register (65 Fed. Reg. 59329). Guatemala was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 2, 2000. See 65 Fed. Reg. 60236.

The provisions implementing the textile provisions of the CBTPA in the HTSUS are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS).

Subheading 9820.11.06 of the Harmonized Tariff Schedule of the United States (HTSUS), provides that articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule which meet the following description are eligible for CBTPA treatment:

Apparel articles sewn or otherwise assembled in one or more such countries with thread formed in the United States from fabrics wholly formed in the United States and cut in one or more such countries from yarns wholly formed in the United States, or from components knit-to- shape in the United States from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the tariff schedule and are wholly formed in the United States), under the terms of U.S. note 2(a) to this subchapter.

U.S. Note 2(a) to heading 9820, HTSUS, provides in relevant part:

For purposes of subheadings 9820.11.03, 9820.11.06, 9820.11.18, and 9820.11.33, apparel articles entered on or after September 1, 2002, that are assembled in a beneficiary CBTPA country from knitted or crocheted fabrics or from woven fabrics shall be eligible to receive the duty treatment provided for in this note only if all dyeing, printing and finishing of such fabrics from which the articles are assembled is carried out in the United States.

The regulations pertinent to the textile provisions of the CBTPA may be found at §§10.221 through 10.228 of the Customs and Border Protection (CBP) Regulations (19 CFR 10.221 through 10.228). The provisions pertaining to printing, dyeing and finishing can be found in 19 C.F.R. 10.223(b). It reads in relevant part:
b) Dyeing, printing, finishing and other operations--(1) Dyeing, printing and finishing operations. Dyeing, printing, and finishing operations may be performed on any yarn, fabric, or knit-to-shape or other component used in the production of any article described under paragraph (a) of this section without affecting the eligibility of the article for preferential treatment, provided that the operation is performed in the United States or in a CBTPA beneficiary country and not in any other country and subject to the following additional conditions:

(i) In the case of an article described in paragraph (a)(1), (a)(2), (a)(3), (a)(12), or (a)(13) of this section that is entered on or after September 1, 2002, and that contains a knitted or crocheted or woven fabric, or a knitted or crocheted or woven fabric component produced from fabric, that was wholly formed in the United States from yarns wholly formed in the United States, any dyeing, printing, or finishing of that knitted or crocheted or woven fabric or component must have been carried out in the United States; and

(2) Other operations. An article described under paragraph (a) [10.223(a) describes the apparel articles eligible for preferential treatment under the CBTPA] of this section that is otherwise eligible for preferential treatment will not be disqualified from receiving that treatment by virtue of having undergone one or more operations such as embroidering, stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing or screen printing, provided that the operation is performed in the United States or in a CBTPA beneficiary country and not in any other country.

Under scenarios A and B, as described by you, the fabric or fabric component is screen printed in Guatemala prior to assembly. Pursuant to 19 C.F.R. 10.223(b)(2), screen printing will not disqualify an article from receiving preferential treatment if it is otherwise eligible. However, these operations must occur post-assembly. See HQ 562605, dated April 9, 2003. Based upon the facts as you have presented them, the trousers that are cut and assembled in Guatemala from fabric wholly formed in the U.S. from yarns wholly formed in the U.S. would not be eligible under subheading 9820.11.06, HTSUS, for CBTPA treatment due to the screen printing operations which occur in Guatemala prior to the assembly process.

HOLDING:

Based upon the information submitted, the trousers that are cut and assembled in Guatemala from fabric wholly formed in the U.S. from yarn wholly formed in the U.S. would not be eligible for CBTPA treatment under subheading 9820.11.06, HTSUS. Depending on whether the trousers are designed for wear by men or women, the trousers are classified in subheading 6203.42.4010, HTSUS, which provides for “men’s or boys' suits, ensembles, suit-type jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear): trousers, bib and brace overalls, breeches and shorts: of cotton: other: other: trousers and breeches: men’s: blue denim” or subheading 6204.62.4010, HTSUS, which provides for “women's or girls' suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear): trousers, bib and brace overalls, breeches and shorts: of cotton: other: other: other: trousers and breeches: women’s: blue denim.” The column one, general rate of duty for subheading 6203.42.4010, HTSUS, is 16.6% ad valorem. The textile quota category is 347. The column one, general rate of duty for subheading 6204.62.4010, HTSUS, is 16.6% ad vaorem and the textile quota category is 348.

Quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries. The textile category number above applies to merchandise produced in non-WTO member-countries. Quota and visa requirements are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” which is available on our web site at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer you to the web site of the Office of Textiles and Apparel of the Department of Commerce at otexa.ita.doc.gov.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.

Sincerely,

Gail A. Hamill, Chief
Tariff Classification and Marking Branch

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See also:

• Tariff No.: 6203.42.40 - Men's or boys' trousers and shorts, not bibs, not knitted or crocheted, of cotton, not containing 15% or more by weight of down, etc
• Tariff No.: 6204.62.40 - Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of cotton, nesoi
• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9820.11.03 - CBTPA goods: Apparel article of chapter 61/62 assembled one or more CBTPA country under certain conditions from fabrics formed and cut in US
• Tariff No.: 9820.11.06 - CBTPA goods: Apparel articles cut in one or more CBTPA from US formed fabric of US formed yarn assembed in CBTPA with US yarn
• Tariff No.: 9820.11.18 - CBTPA goods: Knitted or crocheted apparel, cut and assembled in one or more CBTPA from US fabric of US yarn if assembly with US thread
• Tariff No.: 9820.11.33 - CBTPA goods: Apparel articles sewn/assembled in CBTPA country with US thread & any combination of certain cutting or knit-to-shape operation