CLA-2 OT:RR:CTF:TCM H081216 JPJ
Ms. Priscilla Royster
The Irwin Brown Company
14092 Customs Blvd.
Gulfport, MS 39503
RE: Classification and status under the Caribbean Basin Trade Partnership Act (CBTPA) of girls’ garments from Guatemala; Revocation of NY L86713
Dear Ms. Royster:
This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered New York Ruling letter (NY) L86713, issued to you on August 18, 2005.
In NY L86713, CBP classified a girl’s skirt under subheading 6204.52.2080, of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Women’s or girls’ suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear): Skirts and divided skirts: Of cotton: Other. Other: Girls’” and a girl’s jumper under subheading 6211.42.0060, HTSUS, which provides for “Track suits, ski-suits and swimwear; other garments: Other garments, women’s or girls’: Of cotton. Jumpers”.
In NY L86713, CBP also determined that the girls’ garments met the requirements of the “North American Free Trade Agreement (“NAFTA”) short supply” provision of the Caribbean Basin Trade Partnership Act (“CBTPA”) contained in subheading 9820.11.24, HTSUS, and qualified for preferential, duty free treatment under the CBTPA.
CBP has determined that NY L86713 is incorrect.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1), as amended by section 623 of Title VI, a notice of proposed action was published on March 31, 2010, in the Customs Bulletin, Vol. 44, No. 14. No comments were received.
FACTS:
In NY L86713, the merchandise was described as follows:
The pleated skirt [Style GG5403] has a flat front waistband and an elasticized rear waistband. It has non-functional pocket flaps that are set into seams between the waistband and the skirt body. It also has a fabric lining with separate contrast color netting fabric that extends below the lining hemline and forms an extension to the garment silhouette.
The dropped waist jumper [Style GG5405] has a back zipper opening extending from the rear waist to the nape of the neck and a skirt portion composed of pleated fabric. It has a lightweight, contrast color, sheer fabric belt that secures to the waist by means of five belt loops. It also has a fabric lining with separate contrast color netting fabric that extends below the lining hemline and forms an extension to the garment silhouette.
You state that the garment shells are made of cotton velveteen fabric from China and that the woven polyester lining is from China and the polyester netting extensions and belt fabric are from Taiwan. The fabric will be sent to Guatemala where it will be cut and sewn into the completed garments. The submitted samples are girls’ size 5.
The outer shell fabric, i.e., the cotton velveteen, imparts the essential characteristic of both garments.
ISSUE:
Whether the girls’ garments qualify for preferential tariff treatment under the “NAFTA short supply” provision of the CBTPA contained in subheading 9820.11.24, HTSUS.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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.
The Harmonized Commodity Description and Coding System Explanatory Notes ("EN’s") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
The CBTPA provides certain specified trade benefits for countries of the Caribbean region. The Act extends NAFTA duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides duty-free and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)).
Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.
Guatemala was designated a beneficiary country by Presidential Proclamation 7351 on October 2, 2000, published in the Federal Register (65 Fed. Reg. 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 2, 2000. See 65 Fed. Reg. 60236.
The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§10.221 through 10.228 of the CBP Regulations (19 CFR 10.221 through 10.228).
The provision, commonly referred to as the “NAFTA short supply” provision, is contained in subheading 9820.11.24, HTSUS.
Subheading 9820.11.24, HTSUS, provides as follows:
Articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule: Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries from fabrics or yarn not formed in the United States or in one or more such countries, provided that such apparel articles of such fabrics or yarn would be considered an originating good under the terms of general note 12(t) to the tariff schedule without regard to the source of the fabric or yarn if such apparel article had been imported from the territory of Canada or the territory of Mexico directly into the customs territory of the United States.
None of the fabric used in the manufacture of the girls’ garments is formed in the U.S. or in a CBTPA beneficiary country. Thus, in order to determine whether the goods are eligible for preferential treatment under the CBTPA, we must determine whether the garments would be considered originating goods under the terms of General Note 12(t), HTSUS.
General Note 12(t), HTSUS, sets forth the applicable tariff shift rules under the North American Free Trade Agreement (NAFTA) for determining whether non-originating materials used in the production of a good transform the good into an originating good under the NAFTA.
The outer shell of the garments is said to be constructed of cotton velveteen fabric classifiable in subheading 5801.23, HTSUS, which provides for “Woven pile fabrics and chenille fabrics, other than fabrics of heading 5802 or 5806: Of cotton: Other weft pile fabrics (224).”
Chapter rule 2 to Chapter 62 of General note 12(t) states, in relevant part:
Apparel goods of this chapter shall be considered to originate if they are both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following:
(A) Velveteen fabrics of subheading 5801.23, containing 85 per cent or more by weight of cotton; . . .
Therefore, as long as the girls’ garments are both cut and sewn in a CBTPA beneficiary country and the outer shell, exclusive of collars and cuffs, is wholly of velveteen fabric, the girls’ garments may qualify as originating goods under the terms of General note 12(t).
HOLDING:
Provided that all the requirements of the subheading are satisfied, the apparel articles are classifiable under subheading 9820.11.24 of the HTSUS, and are eligible for preferential, duty free treatment under the CBTPA, provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country and all other documentary requirements are satisfied.
EFFECT ON OTHER RULINGS:
NY L86713, dated August 18, 2005, is revoked.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division