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NY L89169





December 21, 2005

CLA2-61:RR:NC:TA:359:L89169

CATEGORY: CLASSIFICATION

Ms. Rhoda Salus
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, FL 33126-2022

RE: Classification and country of origin determination for women’s knitwear; United States - Israel Free Trade Agreement: Products of the West Bank, the Gaza Strip and Al-Kerak, Jordan, Qualifying Industrial Zone; General Note 3(a)(v), Harmonized Tariff Schedule of the United States (HTS);19 CFR 102.21(c)(4)

Dear Ms. Salus:

We are replying to your letter dated December 12, 2005, in which you request a classification and country of origin determination for women’s knitwear that will be imported into the United States on behalf of Camel Textile International, Ltd.

FACTS:

The subject merchandise consists of a woman’s knitted cardigan. You have submitted a sample identified as style NN5366. The garment is made of 100% cotton finely knit fabric. The garment features a full front opening, ¾ length hemmed sleeves, a round neckline, two rows of beading sewn along the front neckline, down the front panels and around the entire bottom of the garment and a ribbon tie centered at the bodice of the front opening.

The manufacturing steps for the garment are as follows:

CHINA:

The fabric is cut into component parts
Sew the ribbon to the front panels
Sew the binding on the front and back panels Sew the beads on the front and back panels Pack and ship the garment to Jordan for assembly

AL-KERAK QIZ (JORDAN):

Sew the labels at center back neckline
Sew the back neckline/fix back neckline
Join the shoulder seams
Join the sleeves to the body of the garment Join the side seams with the care and UPC labels at inside left seam Fold the sleeve hem ends
Sew the beads on the front and back side seams The garment is trimmed, washed, inspected, packed, and shipped directly to the United States

ISSUES:

What are the classification and country of origin of the subject merchandise? Whether the subject apparel articles, produced in the Al-Kerak QIZ as described above, will qualify for duty-free treatment under General Note 3(a)(v), HTSUS, when imported into the U.S?

CLASSIFICATION:

The applicable subheading for the woman’s cardigan, Style NN5366, will be 6110.20.2075, Harmonized Tariff Schedule of the United States (HTS), which provides for sweaters, pulloversand similar articles, knitted or crocheted: of cotton, other: other: other: women’s or girls’. The general rate of duty will be 16.5% ad valorem.

The garment falls within textile category designation 339. 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.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

You stated that the processing operations for Jordan, were performed in the Al-Kerak Qualifying Industrial Zone (QIZ). 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."

By letters dated June 30, 1997 and July 1, 1997, to the U.S. Trade Representative, the Governments of Jordan and Israel, respectively, requested the designation of the industrial zone in Al-Kerak, Jordan, as a QIZ. Pursuant to subsequent consultations among the three Governments, the Governments of Israel and Jordan entered into a written agreement dated November 16, 1997, relating to the establishment of the Al-Kerak QIZ, which included the following provision, entitled "Rules of Origin":

“The [Governments of Israel and Jordan] agree that the origin of any textile or apparel product that is processed in the Al-Kerak Qualifying Zone, regardless of the origin or place of processing of any of its inputs or materials prior to entry into, or subsequent withdrawal from, the zone, will be determined solely pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay Rounds Act, 19 U.S.C.§ 3592.”

By notice published in the Federal Register on March 13, 1998 (63 FR 12572), the Office of the U.S. Trade Representative formally designated the Israeli-Jordanian Al-Kerak Qualifying Industrial Zone as a QIZ. 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 the Al-Kerak 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.

Section 102.21(e) states that the good must be completely assembled in a single country, territory or insular possession.. Accordingly, as the sweatshirt does not meet those requirements, 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":

(i) 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

(ii) 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.

As the subject merchandise 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, sewing the panels at the sides, attaching the sleeves, and sewing the shoulder seams constitute the most important assembly processes. Accordingly, the country of origin of the cardigan is Jordan.

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 8, HTSUS, products of a qualifying industrial zone (QIZ) are eligible, when imported into the United States, for the "special" rate of duty set forth in the tariff schedule if the article is imported directly from the QIZ into the customs territory of the United States and if all other statutory requirements are met. The "special" duty rate for the garment under consideration is Free.

Under General Note 3 (a) (v), HTS, articles that are 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 that i) the sum of (a) the cost or value of materials produced in the West Bank, the Gaza Strip, a QIZ or Israel plus (b) the direct costs of processing operations performed in the West Bank, the 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.

Regarding 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 QIZ, or Israel into the United States without passing through the territory of any intermediate country.

In your submission you have noted that this merchandise will be imported directly from the Al-Kerak QIZ, Jordan into the United States. We note that we cannot ascertain whether or not the 35 percent value requirement is met until the appraised value of the merchandise is established. This will occur at the time of the entry of the merchandise into the United States.

HOLDING:

The country of origin of style NN5366 is Jordan.

Based upon the information submitted for the manufacturing processes between China and Al-Kerak, Jordan, the garment is considered a product of the Al-Kerak, QIZ, Jordan and is eligible for preferential duty treatment under General Note 3 (a) (v), HTS, provided that it is imported directly from Jordan and the 35 percent value requirement is satisfied.

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 Camille R. Ferraro at 646-733-3049.

Sincerely,

Robert B. Swierupski
Director,

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