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NY N009764




May 16, 2007

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

CATEGORY: CLASSIFICATION

Ms. Rita Wenzel
Dress Barn Inc.
30 Dunnigan Drive
Suffern, NY 10901

RE: Classification and country of origin determination for a men’s woven short; 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 Ms. Wenzel:

This letter replaces N006686 that was issued to you on March 9, 2007. In correspondence dated April 12, 2007, you provided additional information and requested a classification and country of origin determination for men’s woven shorts, with a fabric belt, that will be imported into the United States from Egypt. You have submitted two manufacturing scenarios and state that the manufacturing operations will occur in China and a Qualifying Industrial Zone (QIZ) in Egypt with zippers supplied from Israel. After assembly, the garments will be exported directly from the QIZ to the United States.

FACTS:

Style 41515 is a pair of men’s shorts constructed from 100% cotton, woven twill fabric. The shorts have a flat waistband with five belt loops; an inner drawstring; a fly front opening with a zipper closure and a button at the waistband; inset slash pockets at each side; two rear inset pockets with buttoned flaps; cargo pockets with buttoned flaps on each leg; and raw edges at the leg openings. There is a woven textile belt with a double D-ring closure inserted through the belt loops. You have stated that you will import the same garment in different colors and sizes as Styles 41514, 41516, 41517 and 41518.

The shorts and the belt are sold together at retail as a unit. They are adapted to each other, are mutually complementary and together form a whole that would not normally be offered for sale in separate parts. As such, they meet the definition of a composite good found in the Explanatory Notes to the General Rules of Interpretation, 3(b). The essential character of the garment is imparted by the shorts.

The manufacturing operations for the shorts are as follows:

Scenario A:

CHINA:
- The fabric for the shorts is woven and is sent in rolls to Egypt. - The fabric for the belts is woven and is cut to length and sent to Egypt. - The belt buckles are produced and sent to Egypt.

ISRAEL:
- Zippers are produced and sent to Egypt.

Egypt (QIZ)
- The belt fabric is sewn and the belt buckle is attached. - The fabric for the shorts is cut into components, sewn and assembled into completed garments - The garment is finished and packed for export directly to the United States.

Scenario B:

CHINA:
- The fabric for the shorts and for the belt is woven and sent in rolls to Egypt. - The belt buckle is produced and sent to Egypt

ISRAEL:
- Zippers are produced and sent to Egypt.

Egypt (QIZ)
- The fabric for the belt is cut and sewn and the belt buckle is attached - The fabric for the shorts is cut into components, sewn and assembled into completed garments - The garment is finished and packed for export directly to the United States.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for Styles 41514, 41515, 41516, 41517 and 41518 will be 6203.42.4051, Harmonized Tariff Schedule of the United States (HTSUS), which provides for men’s or boys’ breeches and shorts: of cotton: other: men’s shorts. The general rate of duty is 16.6% ad valorem.

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 World Wide Web at http://www.usitc.gov/tata/hts/.

Styles 41514, 41515, 41516, 41517 and 41518 fall within textile category designation 347. With the exception of certain products of China, 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.

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.

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.

As the garment consists of two or more component parts, and is wholly assembled in a single country, that is Egypt, the terms of the tariff shift are met. The country of origin is conferred in Egypt, QIZ, for both Scenario A and Scenario B.

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.

You state that the processing operations will be performed in a QIZ in Egypt for Scenarios A and B. 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.”

Presidential Proclamation 6955 delegated to the United States Trade Representative the authority to designate qualifying industrial zones. See GN 3(a)(v)(G)(3), supra. The governments of Israel and Egypt jointly requested the designation as a qualifying industrial zone of areas comprising a Greater Cairo zone, Alexandria zone, Suez Canal zone and Central Delta zone. The names and locations of the factories comprising these four zones were specified on maps and materials submitted by Egypt and Israel and on file with the Office of the U.S. Trade Representative. For the purposes of this letter, we will assume that the QIZ you are using will meet the requirements of General Note 3(a)(v)(G), HTSUS.

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% 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 Scenarios A and B will be imported directly from the QIZ to the United States. It cannot be ascertained whether the 35% value content 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 A and Scenario B is Egypt (QIZ). Based upon international textile trade agreements, products of Egypt are not presently subject to visa requirements or quota restraints.

Based upon the information submitted, the garments in Scenario A and Scenario B will be considered a product of the Qualifying 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 Qualifying 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 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 Mary Ryan at 646-733-3271.

Sincerely,

Robert B. Swierupski, Director
National Commodity Specialist Division


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