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HQ H014034




August 15, 2007

CLA-2 OT:RR:CTF:TCM H014034 HMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.12.20

Bryan L’Esperance
Samsonite Corporation
575 West Street, Suite 110
Mansfield, MA 02048

RE: Ruling Request on Eligibility for Preferential Treatment under DR-CAFTA of Certain Hard-sided Suitcases Produced in the Dominican Republic from Non-originating Materials

Dear Mr. L’Esperance:

This is in response to your letter, June 5, 2007, on behalf of Samsonite Corporation (“Samsonite”), concerning your request for a ruling on the eligibility for preferential treatment under the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (“DR-CAFTA”) of certain hard-sided suitcases produced by Samsonite in the Dominican Republic from non-originating materials. You submitted a diagram for the suitcases’ assembly for our examination.

FACTS:

The merchandise at issue consists of hard-sided suitcases, assembled in the Dominican Republic from non-originating components. The sample in the diagram submitted is that of a suitcase with its exterior made of a hard plastic shell, featuring a top and side carry handles, a telescoping pull handle, wheels and a zipper closure system. The interior is composed of a fabric lining, a mesh fabric door enclosure and cross straps made from fabric webbing.

You explain that the plastic shells, mesh materials, lining material, zipper tapes, webbing and various pieces of hardware are made in non-DR-CAFTA countries and shipped to the Dominican Republic for assembly there. In the Dominican Republic, the lining and mesh material will be cut to shape and sewn, the pull handle systems will be assembled, and all materials and hardware will be fitted to the plastic shells, resulting in the finished suitcases. We note that the cross straps, lining, mesh door, main zipper, hinge, wheels, handles and other hardware are assembled by sewing, stapling, and glue tacking to create the finished suitcases. The suitcases are then packaged for shipment to the United States.

In your ruling request letter you claim that the subject suitcase is classifiable under subheading 4202.12.2020, Harmonized Tariff Schedule of the United States (“HTSUS”) and inquire whether it is eligible for preferential (duty-free) treatment under the DR-CAFTA.

ISSUE:

Whether the subject hard-sided suitcase is eligible for preferential (duty-free) treatment under the DR-CAFTA when the suitcase is assembled in the Dominican Republic from non-originating materials?

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

Initially, we note that the subject suitcase is classifiable under subheading 4202.12.20, HTSUS, as “trunks, suitcases: trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers: with outer surface of plastics or of textile materials: with outer surface of plastics.”

With regards to eligibility under the DR-CAFTA, on August 5, 2004, the governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States signed the Dominican Republic-Central America-United States Free Trade Agreement (“Agreement”). The U.S. Congress approved the Agreement with the enactment on August 2, 2005, of the DR-CAFTA, Pub. L. 109-53, 119 Stat. 462 (19 U.S.C. 4001 et seq.). The Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and the United States are currently parties to the Agreement.

By Presidential Proclamation, dated February 28, 2007, effective March 1, 2007 (Proclamation No. 8111, 72 Fed. Reg. 10023 (2007)), the HTSUS was modified as set forth in Annexes I and II of Publication 3901 of the United States International Trade Commission, entitled Modifications to the Harmonized Tariff Schedule of the United States to Implement the Dominican Republic-Central America-United States Free Trade Agreement With Respect to the Dominican Republic (Publication 3901), to add the Dominican Republic as a country accorded preferential tariff treatment under the DR-CAFTA.

General Note (GN) 29 of the HTSUS contains the DR-CAFTA rules. GN 29(a), HTSUS, states, in relevant part:

Goods for which entry is claimed under the terms of the Dominican Republic-Central America-United States Free Trade Agreement are subject to duty as set forth herein. For the purposes of this note –
originating goods or goods described in subdivision (a)(ii), subject to the provisions of subdivisions (b) through (n) of this note, that are imported into the customs territory of the United States and entered under a provision –

(A) in chapters 1 through 97 of the tariff schedule for which a rate of duty appears in the “Special” subcolumn of column 1 followed by the symbol “P” or “P+” in parentheses, or
in chapter 98 or 99 of the tariff schedule where rate of duty or other treatment is specified,
are eligible for the tariff treatment and quantitative limitations set forth therein in accordance with sections 201 through 203, inclusive, of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (Pub. L. 109-53; 119 Stat. 462)[.]

GN 29(b), HTSUS, sets forth criteria for determining whether a good (other than agricultural goods provided for in GN 29(a)(ii)) is an originating good for purposes of the DR-CAFTA. GN 29(b), HTSUS, states, in relevant part:

For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if –

(i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;

(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and –
each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note;
and the good satisfies all other applicable requirements of this note; or

(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.

As the subject merchandise is assembled in the Dominican Republic from non-originating components, the provisions of GN 29(b)(ii)(A) and GN 29(n) apply. Specifically, the subject suitcase will have to satisfy the tariff change rule of GN 29(n), Chapter 42, HTSUS, rule 3, which states that:

A change to subheading 4202.12 from any other chapter, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement.

Based on the submitted information, we find that the subject suitcase would not qualify for preferential (duty-free) treatment under the DR-CAFTA. The language of GN 29(n), Chapter 42, rule 3, requires that the goods of subheading 4202.12 be cut or knit to shape, or both, in the Dominican Republic. Although the suitcases will be assembled in the Dominican Republic, the plastic shells, the main component of the suitcase and the determinative component for classification of the subject suitcases, will not be cut in the Dominican Republic. We note that cutting the lining and the mesh material in the Dominican Republic is not sufficient to satisfy the tariff change requirement because the plastic shells do not satisfy the requirements of rule 3 of GN 29(n), Chapter 42, HTSUS. Furthermore, the other non-originating components, such as the top and side carry handles, the telescoping pull handle and wheels, do not meet the requirements of rule 3 as they are not cut or knit to shape in the Dominican Republic and no information or claim has been made that these components fall within the scope of “de minimis” as defined in GN 29(e). Inasmuch as the suitcase’s plastic shells and these other components of the suitcases are not cut or knit to shape in the Dominican Republic, the subject suitcases are ineligible for preferential treatment under the DR-CAFTA.

HOLDING:

The hard-sided suitcase assembled in the Dominican Republic from non-originating materials is not eligible for preferential (duty-free) treatment under the DR-CAFTA. It is classifiable under subheading 4202.12.2020, HTSUS, as “Trunks, suitcases: trunks, suitcases, vanity cases, attache cases, briefcases, school satchels and similar containers: with outer surface of plastics or of textile materials: with outer surface of plastics, Structured, rigid on all sides: Trunks, suitcases, vanity cases and similar containers” with a column one general duty rate of 20%. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the Internet at www.usitc.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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