CLA-2: OT:RR:CTF:TCM H066896 KSH
Jim Brown, Vice President
McMichael Mills
P.O. Box 507
Madison, NC 27025
RE: Country of Origin of knit socks under the DR-CAFTA.
Dear Mr. Brown:
This letter is in response to your request of June 22 and July 10, 2009, in which you request a prospective ruling on the eligibility of certain knit socks for preferential tariff treatment under the Dominican Republic-Central America Free Trade Agreement (DR-CAFTA).
FACTS:
The merchandise at issue is socks knit in a DR-CAFTA region from yarn gimped in the U.S. containing a core of U.S. spandex filament, one end of U.S. nylon filament and one end of non-originating nylon filament. The finished socks are imported directly into the U.S.
ISSUE:
Whether the knit socks qualify for preferential treatment under the DR-CAFTA.
LAW AND ANALYSIS:
The DR-CAFTA was signed on August 5, 2004, and includes as parties the United States, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Costa Rica. The provisions of the DR-CAFTA were adopted by the U.S. in the Dominican Republic Central America Free Trade Agreement Implementation Act, Public Law 109-53 (2005). General Note 29, of the Harmonized Tariff Schedule of the United States ("HTSUS") sets forth the rules of origin for the DR-CAFTA. Interim regulations for the DR-CAFTA are set forth in 73 FR 33673, dated June 13, 2008, and are found at 19 CFR 10.581 et seq.
Pursuant to GN 29(b), goods are eligible for treatment as an originating good 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 nonoriginating 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. The imported socks are not wholly obtained or produced entirely in
the territory of the DR-CAFTA countries. See GN 29(c). Thus, we must consider GN 29(b)(ii). The imported socks are produced entirely in a DR-CAFTA country from both originating and nonoriginating materials. Pursuant to GN29(b)(ii)(A), a determination must be made whether the nonoriginating materials undergo the applicable change in tariff classification.
The applicable tariff shift rule for the socks, which are classified in heading 6115, of the Harmonized Tariff Schedule of the United States (HTSUS) is set forth in GN 29(n) as follows:
A change to headings 6114 through 6116 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516 or 6001 through 6006, 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.
The knit socks are formed from gimped yarn, classified in heading 5604, HTSUS. Insofar as heading 5604, HTSUS, is not excepted from the tariff shift rule and the socks otherwise meet the requirements of GN 29, the knit socks meet the applicable tariff shift rule.
HOLDING:
The socks which are knit in the DR-CAFTA region from U.S. gimped yarn containing a core of U.S. origin elastomeric thread are eligible for preferential treatment under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements.
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