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NY N019721




December 13, 2007

CLA-2-62:OT:RR:NC:WA:356

CATEGORY: CLASSIFICATION

TARIFF NO.: 6203.42.4011

Mr. Mark Schissel and Ms. Trace Garrett
Target Customs Brokers, Inc.
7000 Target Parkway, NCD-0459
Brooklyn Park, MN 55445

RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of men’s denim pants from Nicaragua.

Dear Mr. Schissel and Ms. Garrett:

In your letter dated November 6, 2007, you requested a ruling on the status of men’s pants from Nicaragua under DR-CAFTA.

The submitted sample, Style 218180, is a pair of men’s pants constructed from 100% cotton, blue denim fabric. The pants have a flat waistband with five belt loops, a front fly opening with a zipper closure, a button in the waistband, two quarter pockets on the front panel, an inner pocket inside the right front pocket, two back patch pockets, and hemmed legs.

You describe the manufacturing and assembly process as follows:

Style 218180 will be cut and wholly assembled in Nicaragua from fabric woven in Mexico.

After assembly, the pants will be shipped to Guatemala where they will be pressed, packed, and exported to the United States.

The origin of the sewing thread will be the United States and the origin of the trim will be Hong Kong.

The applicable tariff provision for Style 218180 will be 6203.42.4011, Harmonized Tariff Schedule of the United States (HTSUS), which provides for men’s and boys’trousers: of cotton: other: other: other: blue denim. The general rate of duty will be 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/.

The pants 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 With the exception of certain products of China, quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries.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.

General Note 29(b), HTSUS, sets forth the criteria for determining whether a good is originating under DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

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--

(A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or

(B) 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.

Style 218180 was produced in Nicaragua. On April 1, 2006, Nicaragua became eligible for DR-CAFTA benefits.

The merchandise does not qualify for preferential treatment under DR-CAFTA because (a) it will not be wholly obtained or produced entirely in the territory of one or more DR-CAFTA countries; (b) one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 29(n)/62.15, HTSUS; and (c) it will not be produced entirely in the territory of one or more of the DR-CAFTA parties exclusively from originating materials.

The pants may be subject to a reduced rate of duty based upon the temporary tariff provisions found in chapter 99, subchapter XV of the HTSUS. U.S. Note 15 to that chapter states:

The rate of duty provided for in subheading 9915.61.01 in the "Special" subcolumn of rates of duty column 1 shall apply to goods of Nicaragua, in an aggregate quantity not to exceed the annual total quantity set forth in subdivision (c) of this note. Subheading 9915.61.01 applies to the cotton or man-made fiber apparel goods described in this note if the goods meet the applicable conditions for preferential tariff treatment under general note 29 to the tariff schedule, other than the condition that they be originating goods and are both cut or knit to shape, and sewn or otherwise assembled, in the territory of Nicaragua. The apparel goods of cotton or of man-made fibers, or subject to cotton or man-made fiber restraints, enumerated herein and provided for in chapters 61 or 62 shall receive the tariff treatment set forth in subheading 9915.61.01. For purposes of this note, an apparel good must be classifiable in a tariff provision enumerated in the first column below and be described opposite such provision:

The pants are both cut and sewn in Nicaragua and HTSUS 6203.42.40 is one of the headings enumerated in the note. The pants must also meet the General Note 29 requirements, other than the requirement that they originate. General Note 29(c)(iii) states, in pertinent part:

A good that has undergone production necessary to qualify as an originating good under this note shall not be considered to be an originating good if, subsequent to that production, the good—
undergoes further production or any other operation outside the territories of the parties to the Agreement, other than unloading, reloading or any other operation necessary to preserve the good in good condition or to transport the good to the territory of a party to the Agreement;

You state that after the pants are cut and sewn in Nicaragua, they will be sent to Guatemala where they will be pressed and packed for export to the United States. As of July 1, 2006, Guatemala was added to the list of countries eligible for DR-CAFTA benefits. Therefore, since the operations necessary to finish and preserve the pants in good condition take place in the territory of one of the DR-CAFTA parties, the pants remain eligible under 9915.61.01 HTSUS.

You also asked whether the blue denim fabric used in the production of the pants will qualify under the short supply provisions of DR-CAFTA. The blue denim fabric is classified in HTSUS subheading 5209.42.0040. At the present time, this fabric does not appear on the OTEXA short supply list for DR-CAFTA and, therefore, is not eligible for consideration as a short supply fabric.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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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