CLA-2 RR:CR:TE 964903 SS
Mr. Edward Johnson
Levi Strauss & Co.
P.O. Box 7215
San Francisco, CA 94120
RE: Classification of Men’s Woven Pants and Shorts; U.S.-Caribbean Basin Trade Partnership Act; Subheading 9820.11.24, HTSUSA; “Short Supply” Provision
Dear Mr. Johnson:
This is in response to your letter dated February 13, 2001, requesting a binding ruling on the eligibility of certain men’s woven pants and shorts for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted two samples for our examination.
FACTS:
The first sample is a pair of men’s pants identified by product code 20465-5703. The ruling request indicates that pants with product codes 20465-5718, 20465-5725, 20465-5727, 20465-5735 and 20465-5758 are made from the same fabric. The fiber content of the fabric is listed as 61 percent linen, 35 percent cotton and 4 percent spandex. You indicate that the pants are produced in the Dominican Republic. No information was supplied indicating where the fabric or yarns were formed. However, our New York office has indicated that the linen fabric is formed in Ireland. The pants also have pocketing and waistband lining of a different material. The fiber content and origin of such fabric was not identified.
The second sample is a pair of men’s pants identified by product code 20577-7503. The ruling request indicates that pants with product codes 20577-7536, 20577-7528, 20577-7558 and shorts with product codes 30810-7503, 30810-7527, 30810-7536 and 30810-7558 are made from the same fabric. The fiber content of the fabric is listed as 60 percent linen and 40 percent cotton. You indicate that the pants are produced in the Dominican Republic. No information was supplied indicating where the fabric or yarns were formed. However, our New York office has indicated that the linen fabric is formed in Ireland. The pants also have pocketing and waistband lining made of a different fabric. The fiber content and origin of such fabric was not identified.
ISSUE:
Whether the pants and shorts are eligible for preferential tariff treatment under the CBTPA?
LAW AND ANALYSIS:
By application of Note 2(a), Section XI, HTSUSA, and Subheading Note 2(a), Section XI, HTSUSA, the pants and shorts are classified as if they consisted wholly of linen because that is the textile material which predominates by weight over each other single textile material. Thus, the pants are classifiable under subheading 6203.49.8045, HTSUSA, and the shorts are classifiable under subheading 6203.49.8060, HTSUSA. The general column one rate of duty is 2.8 percent ad valorem and the applicable textile category code is 847. However, the pants and shorts may be eligible for preferential tariff treatment under the CBTPA.
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, among other things, eliminates tariffs and quantitative restrictions on specific textile and apparel articles. “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, HTSUSA (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. The Dominican Republic 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).
You specifically ask whether the pants and shorts will meet the eligibility requirements of the “short supply” provision. The provision commonly referred to as the “NAFTA short supply” provision is contained in subheading 9820.11.24, of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Subheading 9820.11.24, HTSUSA, 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.
Based on information provided by our New York office, the linen fabric is not formed in the U.S. or a CBTPA beneficiary country. Thus, in order to determine whether the goods are eligible for preferential treatment under the CBPTA, we must determine whether the pants and shorts would be considered originating goods under General Note 12(t), HTSUSA.
General Note 12(t), HTSUSA, sets out the tariff shift rules for determining whether non-originating materials used in the production of a good have been transformed into originating goods under the North American Free Trade Agreement. For subheading 6203.49, HTSUSA, General Note 12(t), HTSUSA, provides that a good will be originating if there is:
A change to subheadings 6203.41 through 6203.49, from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308, or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
When the linen/cotton blend and linen/cotton/spandex blend fabrics are imported into the Dominican Republic, they are classified under heading 5309, HTSUSA, based on the linen fibers which predominate by weight. Since heading 5309, HTSUSA, is not excepted from the tariff shift rule, the pants would qualify as an originating good assuming the pants are cut and sewn in the Dominican Republic.
The pants have pocketing fabric and waistband lining fabric that we assume are not formed in the U.S. or a CBTPA beneficiary country. However, Chapter rule 3 to Chapter 62, GN 12(t), HTSUSA, provides as follows:
For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. If the rule requires that the good must also satisfy the tariff change requirements for visible lining fabrics listed in chapter rule 1 for this chapter, such requirement shall only apply to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings.
Thus, for the purposes of determining whether the pants are originating under GN 12(t), HTSUSA, we disregard the pocketing fabric and waistband lining fabric because neither fabric is the component that determines the tariff classification of the good. See Headquarters Ruling Letter (HQ) 963438, dated October 7, 1999, and HQ 562291, dated February 21, 2002.
Lastly, we note that although there is a restriction on the use of foreign elastomeric yarn such as spandex under the CBTPA, the restriction is not applicable in this case. See US Note 3(a), Subchapter XX, Chapter 98, HTSUSA. Customs interim regulations clarify that the elastomeric yarn restriction is not applicable to goods eligible for preferential treatment under subheading 9820.11.24, HTSUSA. See 19 CFR 10.223(b)(1)(i)(D).
HOLDING:
The pants and shorts will be eligible for duty free/quota free treatment under subheading 9820.11.24, HTSUSA, provided that the pants and shorts are cut and sewn in the Dominican Republic from the linen fabric described above and that the fabric is not formed in the U.S. or a CBTPA beneficiary country. Furthermore, the pants and shorts must be imported directly into the customs territory of the U.S. from a CBTPA beneficiary country and all other requirements must be satisfied.
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