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NY N026749




May 7, 2008

CLA2-OT:RR:NC:TA:359

CATEGORY: CLASSIFICATION

Mr. Mike Rizner
Augusta Sportswear
425 Park West Drive
Grovetown, GA 30813

RE: Classification and country of origin determination for a women’s cardigan; Product 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 Mr. Rizner:

This letter replaces N024971 that was issued to you on April 9, 2008. In correspondence dated April 21, 2008, you provided additional information and requested a classification and country of origin determination for a women’s knitted cardigan, that will be imported into the United States from Egypt. You have submitted the manufacturing scenario and state that the manufacturing operations will occur in China and the Ismailia Public Free Zone (QIZ) in Egypt. The thread, elastic, polybag and carton are supplied from Israel. The zipper and labels will be supplied from Hong Kong and stickers will be supplied from the United Arab Emirates. After assembly, the garment will be exported directly from the QIZ to the United States.

FACTS:

Style 4450, is a women’s cardigan that is constructed from a 92% polyester and 8% cotton double-knit fabric. The outer surface of the garment measures more than nine stitches per two centimeters in the direction in which the stitches were formed. The garment extends to the waist. The cardigan features a stand-up collar, a full front zippered opening, long hemmed sleeves, contrast color inserts extending down the front panels from the collar to the pockets, two inset pockets at the lower front panels, and a hemmed garment bottom. You state in your letter that the garment will be imported in sizes S - 2XL.

The manufacturing operations for the cardigan are as follows:

CHINA:

The fabric is knit.

EGYPT (QIZ):

The fabric is cut. Garment is sewn, finished, packed, and shipped to the United States.

ISSUE:

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

CLASSIFICATION:

The applicable subheading for the cardigan will be 6110.30.3059, Harmonized Tariff Schedule of the United States (HTSUS), which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of man-made fibers: other: other: other: women’s or girls’: other. The duty rate will be 32%.

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/.

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.

Paragraph (c)(1) states, “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, “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,

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. 

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.

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. 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. We have already determined that the garment is a product of Egypt (QIZ).

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 garment 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 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 garment 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 Francine Vivona-Brock at 646-733-3049.

Sincerely,

Robert B. Swierupski
Director,

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