MAR-2 RR:CR:SM 561954 KSG
David Jang
CSS Trading Company, Inc.
15580 E. Hinsdale Circle
Englewood, CO 80112
RE: U.S.-Caribbean Basin Trade Partnership Act; men's and boys' shirts; subheading 9820.11.24; subheading 6205.30, HTSUS; 102.21 origin determination
Dear Mr Jang:
This is in response to your letter of November 1, 2000, requesting a binding ruling on the eligibility of certain men’s and boys’ shirts for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted two sample shirts for our examination.
FACTS:
The men’s and boys’ tuxedo style shirts will be made from 65% polyester/35% cotton woven fabric that is made in China. The fabric is classified in subheading 5513.11, of the Harmonized Tariff Schedule of the United States (“HTSUS”). The shirts will be cut and assembled in Guatemala. The shirts will be classified in subheadings 6205.30.2030, and 6205.30.2040, HTSUS.
ISSUE:
Whether the shirts, manufactured as described above, are eligible for duty-free treatment under the CBTPA.
LAW AND ANALYSIS:
Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213 (b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.
Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.
Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.
The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country (1) that is designated as a CBTPA beneficiary country and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles. Guatemala is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351, dated October 2, 2000, 65 Fed. Reg. 59329) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).
In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000. It is noted that the issue raised in this ruling letter is outside the scope of the comments received.
The relevant provision, is set forth in 19 U.S.C. 2703(b)(2)(A)(v)(I), which provides that preferential treatment shall apply to:
Apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more CBTPA beneficiary countries, from fabrics or yarn that is not formed in the United States or in one or more CBTPA beneficiary countries, to the extent that apparel articles of such fabrics or yarn would be eligible for preferential treatment, without regard to the source of the fabrics or yarn, under Annex 401 of the NAFTA.
Subheading 9820.11.24, HTSUS, was created for the entry of articles eligible for preferential treatment under 19 U.S.C. 2703(b)(2)(A)(v)(I) (see Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329). This subheading provides for the duty-free entry of:
Apparel articles both cut (or knit-to-shape) 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 term 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.
Therefore, in regard to the facts of this case, imported men’s and boys' shirts classified in subheading 6205.30, HTSUS, cut and assembled in Guatemala from foreign fabrics (not produced in the U.S. or one or more CBTPA beneficiary countries), are eligible for preferential treatment if the fabric is identified in the NAFTA preference subheading rule in General Note (“GN”) 12(t)62.SR30, HTSUS. The subheading rule states:
Men’s or boys’ shirts of cotton (subheading 6205.20) or of man-made fibers (subheading 6205.30) shall be considered to originate if they are both cut and assembled in the territory of one or more of the parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following:
Various tariff classification numbers for fabrics are then listed in paragraphs (a) through (i). Fabric of subheadings 5513.11, and 5513.21, HTSUS, not of square construction, containing more than 70 warp ends and filling picks per square centimeter, of average yarn number exceeding 70 metric are listed in the subheading rule in GN 12(t)62.SR30(b).
Since the foreign fabric used in this case to make the outer shell of men’s and boys’ shirts classified in subheading 6205.30, HTSUS, is listed in the applicable subheading rule in GN 12(t), the shirts will be eligible for duty-free treatment under subheading 9820.11.24, HTSUS, provided they are imported directly to the U.S. from a CBTPA beneficiary country.
We note that you contend the tuxedo style shirts are classified in subheading 6205.30.2030, HTSUS, for the men's shirts and subheading 6205.30.2040, HTSUS, for the boys shirts. We agree with your classification assessment.
You also asked for a country of origin determination for the tuxedo style shirts. Section 334 of the Uruguay Round Agreements Act (“Section 334") provides the rules of origin for textiles and apparel. Section 102.21, Customs Regulations (19 CFR 102.21) implemented section 334. Pursuant to 19 CFR 102.21, the country of origin of a textile or apparel product is determined by sequential application of the general rules set forth in paragraphs (c)(1) through (c)(5).
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, 19 CFR 102.21(c)(1) 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 foreign material 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.” As discussed above, the shirts are classified in subheading 6205.30, HTSUS. Section 102.21(e) states that for goods classified in headings 6201- 6208, HTSUS:
(1) 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.
The term “wholly assembled” is defined in 19 CFR 102.21(b)(6) to mean that:
...all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as “wholly assembled” in a single country, territory, or insular possession.
In this case, the shirts are not knit to shape and consist of more than two components. The shirts are wholly assembled in Guatemala. Therefore, pursuant to 19 CFR 102.21(c)(2), the country of origin of the shirts is Guatemala.
HOLDING:
Based on the information provided, the tuxedo style men’s and boys' shirts, manufactured as described in this case, are eligible for duty free/quota free treatment under subheading 9820.11.24, HTSUS, provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country.
Pursuant to 19 CFR 102.21, the country of origin of the shirts is Guatemala.
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 Customs officer handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division