MAR-2 RR:CR:SM 562568 KKV
TARIFF-NO: 9820.11.09
Thomas J. Kovarcik, Esq.
237 Park Avenue, 21st Floor
New York, NY 10017-3142
RE: U.S.-Caribbean Basin Trade Partnership Act; subheading 9820.11.09
Dear Mr. Kovarcik:
This is in response to your letter of September 26, 2002 ( and additional submission dated November 26, 2002), on behalf of Elastic Corporation of America (“ECA”) which requests a binding ruling on the eligibility of garments made in Honduras or El Salvador for preferential tariff treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). No sample was submitted for our examination.
FACTS:
The garment at issue is a women's knitted full cut panty constructed of 100% knit cotton fabric. You incorporate by reference a previous decision issued to you by the Customs Service, stating that the subject garment is identical to the merchandise described in HRL 562401, dated July 11, 2002. Specifically, the garment features a one-inch wide exposed elastic waistband, capped leg openings, side seams and a self fabric gusset sewn into the crotch.
You indicate that the subject garments will be produced in an identical manner as the garments in 562401, supra, except that all the components will be knitted in Honduras and/or El Salvador from U.S. yarns. Therefore, we understand that the garments will be produced in the manner set forth below.
The cotton fabric is produced as follows:
Cotton of U.S. origin will be spun into yarns in the U.S and subsequently knit into tubular fabric in Honduras or El Salvador. The tubular fabric will be bleached, dyed and finished and cut into components. The resulting components will be sewn together and attached to an elastic waistband to form finished panties.
The elastic waistband is produced as follows:
Elastic yarns wholly-extruded and wholly spun in the U.S. will be exported to a fabricating plant in Honduras, where they will be crochet-knit into elastic fabric, printed with the “Fruit of the Loom” logo and wound onto rolls ready for cutting and attachment to the panties. The rolls will be sent to assembly plants in Honduras or El Salvador.
The panties will be shipped to the U.S., imported into the ports of Miami, Florida or Gulfport, Mississippi and sold under the “Fruit of the Loom” label.
ISSUE:
Whether the women's knitted cotton panties described above are eligible for preferential tariff 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 3107(a)of the Trade Act of 2002 (Pub.L. 107-210,116 Stat. 933), signed into law on August 8, 2002, modified the treatment accorded to certain textile and apparel articles under section 213(b) of the CBERA.
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 section 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. Presidential Proclamation 7626, dated November 13, 2002, published in the Federal Register on November 18, 2002 (67 Fed. Reg. 69459), implemented the changes effected by section 3107(a) of the Trade Act of 2002.
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. Both Honduras and El Salvador are CBTPA beneficiary countries. See U.S. Note 1, Subchapter XX, Chapter 98, HTSUS.
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).
Subheading 9820.11.09, HTSUS, provides as follows:
Apparel articles (other than socks provided for in heading 6115 of the tariff schedule) knit to shape in such a country from yarns wholly formed in the United States; knitted or crocheted apparel articles (except t-shirts, other than underwear, classifiable in subheading 6109.10.00 and 6109.90.10 and described in subheading 9820.11.12) cut and wholly assembled in one or more such countries from fabrics formed in one or more such countries or from fabrics formed in one or more such countries and the United States, all the foregoing from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 of the tariff schedule and are formed in one or more such countries) and subject to the provisions of U.S. Note 2(b) to this subchapter.
Garments meeting the description contained in subheading 9820.11.09, HTSUSA, are eligible for preferential tariff treatment as provided for in Subchapter XX, U.S. Note 2(a) HTSUSA, which provides:
Except as provided in this note, textile and apparel articles described in subheading 9820.11.03 through 9820.11.33, inclusive, of this subchapter that are imported directly into the custom territory of the United States from a designated beneficiary CBTPA country enumerated in general note 17(a) to the tariff schedule shall be eligible to enter free of duty and free of any quantitative limitations, except as provided in this subchapter, under the terms of the provisions set forth in such subheadings and applicable legal notes, as indicated by the rate of duty of “Free” in the Special rates of duty subcolumn for such provisions….
U.S. Note 2(b), Subchapter XX, Chapter 98, HTSUS, was recently amended by Presidential Proclamation 7626, supra, to provide as follows:
Imports of apparel articles under subheading 9820.11.09 shall be limited, in the period beginning on October 2, 2000 and continuing through the close of September 30, 2001, to an aggregate quantity not to exceed 250,000,000 square meter equivalents. Such imports of apparel articles shall be limited during each of the one-year periods provided for herein, to the following aggregate quantity of square meter equivalents:
12-month Period Square Meter Equivalents
October 1, 2001 through September 30, 2002 290,000,000
October 1, 2002 through September 30, 2003 500,000,000
October 1, 2003 through September 30, 2004 850,000,000
October 1, 2004 through September 30, 2005
and subsequent 12-month periods 970,000,000
Based on the facts presented in this case, the yarns are wholly formed in the United States as required by subheading 9820.11.09, HTSUS. The elastic fabric is formed in Honduras and the cotton fabric is formed in Honduras or El Salvador. The cotton and elastic fabrics are cut and assembled in Honduras or El Salvador, both of which are CBTPA beneficiary countries. Accordingly, the cotton panties will be eligible for preferential treatment under subheading 9820.11.09, HTSUS, subject to the quantitative limitations set forth in U.S. Note 2(b), Subchapter XX, Chapter 98, HTSUS, and assuming compliance with the applicable documentation requirements.
HOLDING:
Based upon the facts provided, women's knitted cotton panties, manufactured in the manner described above, will be eligible for preferential tariff treatment under subheading 9820.11.09, HTSUS, subject to the quantitative limitations set forth in U.S. Note 2(b), Subchapter XX, Chapter 98, HTSUS, and assuming compliance with the applicable documentation requirements.
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,
Myles B. Harmon
Acting Director
Commercial Rulings Division