CLA-2 RR:CR:TE 965809 mbg
Ms. B. Jennifer Lee-Thorp
Fleur de Lee Importers
11635 Blue Ridge Lane
Great Falls, VA 22066
RE: African Growth and Opportunity Act; knit cotton t-shirt
Dear Ms. Lee-Thorp:
This is in response to your letter of July 22, 2002, on behalf of Fleur de Lee Importers, requesting a binding ruling on the eligibility of women’s knit cotton t-shirts for preferential treatment under the African Growth and Opportunity Act (“AGOA”).
FACTS:
The subject garment is a women’s knit shirt of 100 percent cotton fabric and features short sleeves and a hemmed bottom. You have provided that the shirt is manufactured from yarn that is formed in Zimbabwe and then processed in Botswana. The yarn is then knit into fabric in Botswana and cut and assembled into a shirt in Botswana. The shirt is further processed with screen printing in South Africa. You have provided that the design that will be silk screen printed are depictions of indigenous South African flora.
The subject women’s t-shirt will be classified in subheading 6109.10.0040 of the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”).
ISSUE:
Whether the subject apparel is eligible for preferential treatment under AGOA?
LAW AND ANALYSIS:
The Trade and Development Act of 2000 (the Act”) was signed into law on May 18, 2000 (Pub. L. 106-200, 114 Stat. 251). Title I of the Act concerns trade benefits for sub-Saharan Africa and is referred to as the African Growth and Opportunity Act (“AGOA”). Section 112 of the Act (codified at 19 U.S.C. 3721) specifies the textile and apparel articles that are eligible for duty-free and quota-free treatment when imported directly into the customs territory of the U.S. from a beneficiary sub-Saharan African country. Section 3108 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), enacted on August 6, 2002, amended the AGOA to modify the treatment accorded to textile and apparel articles imported from beneficiary sub-Saharan African countries.
Presidential Proclamation 7350 dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 FR 59321), implemented the AGOA by designating the eligible beneficiary sub-Saharan African countries and amending Chapter 98, Harmonized Tariff of the U.S. (“HTSUS”) (including the creation of new subchapter XIX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the AGOA. The enhanced trade benefits provided by the AGOA are available to eligible textile and apparel articles imported directly from a country (1) that is designated as a beneficiary sub-Saharan African country and (2) which the U.S. Trade Representative (“USTR”) has determined by a proclamation published in the Federal Register has satisfied the requirements of the AGOA and therefore should be afforded the tariff treatment authorized in such Act. Such countries shall be enumerated in U.S. Note 1, Subchapter XIX, Chapter 98, HTSUS, whenever the USTR issues a Federal Register notice as described herein. See Presidential Proclamation 7350, Annex, dated October 2, 2000, 65 Fed. Reg. 59321.
Botswana and South Africa were designated as beneficiary sub-Saharan African countries under AGOA by Presidential Proclamation. The USTR issued a determination finding that these sub-Saharan countries have adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents in connection with shipments of textile and apparel articles and have implemented and follow, or are making substantial progress toward implementing and following, the customs procedures required by the AGOA, effective March 7, 2001 for South Africa and August 27, 2001 for Botswana. See 66 Fed. Reg. 14425, dated March 12, 2001 for South Africa and 66 Fed. Reg. 46050, dated August 31, 2001 for Botswana.
As of the issuance of this ruling letter, Zimbabwe is not a beneficiary country under the AGOA. However, the Trade Act of 2002, provides an amendment to AGOA and specifically allows for Botswana to be considered a Lesser Developed Country. See Section 3108(a)(3)(B) of Pub. L. 107-210, 116 Stat. 933, which provides:
(i). . . [P]referential treatment under this paragraph shall be extended through September 30, 2004, for apparel articles wholly assembled, or knit –to-shape and wholly assembled, or both, in one or more lesser developed beneficiary sub-Saharan African countries regardless of the country of origin of the fabric or the yarn used to make such articles.
* * *
(ii) For purposes of clause (i), the term ‘lesser developed beneficiary sub-Saharan African country’ means . . . Botswana.
Subheading 9819.11.12, HTSUS, provides as follows:
Apparel articles wholly assembled in a lesser developed such country enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive.
U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12.
In this case, the yarn is wholly formed in Zimbabwe. The yarn is processed in Botswana and then the fabric is knit, processed, cut and assembled into apparel in Botswana. Therefore since Botswana has LDC status, the yarn and fabric used in the manufacture of apparel can originate from any other country (including Zimbabwe) until the LDC status expires on September 30, 2004.
The AGOA regulations provide that the article must be “wholly assembled” in an LDC. As defined in 19 C.F.R. 10.212:
Wholly assembled in. When used with reference to a textile or apparel article in the context of one or more beneficiary countries or one of more lesser developed countries, the expression “wholly assembled in” means that all of the components of the textile and apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or in one or more lesser developed beneficiary countries.
Thus the question presented is whether the silk screening process performed in South Africa constitutes an assembly operation that would preclude the garment from receiving preferential treatment under the LDC provision of the AGOA.
The subject merchandise has the design screen printed onto the completed t-shirt. “Screen Printing” is defined as:
a method of printing similar to using a stencil. The areas of the screen through which the coloring matter is not to pass are filled with a waterproof material. The printing paste which contains the dye is then forced through the untreated portions of the screen onto the fabric below. Each color in the pattern requires a different screen.
See Dictionary of Fiber & Textile Technology 7th ed., 123 (1999).
Customs has previously considered the issue of printing and distinguished between an operation which involves the mere transfer of an ink design through the use of heat and an operation which results in the transfer of the entire decal. Customs has consistently held that the transfer of the entire decal constitutes an acceptable assembly process for purposes of the special regimes programs but that the mere transfer of a decal design by a heat process was not acceptable. In Headquarters Ruling letter (“HQ”) 559691, dated August 30, 1996, Customs stated:
We have ruled that where decal designs were merely transferred by means of heat to a garment, there was no acceptable assembly of solid components … However, ….[Where] the entire decal, not just its design, will be transferred to the fabric [,] we believe that there is a significant distinction between the two processes. In one case, only the ink design of the decal is transferred as a result of the heat process. In the other case the entire plastic decal is transferred with the heat acting as an adhesive substitute. In the latter case there would be a joining of the two solid components in an acceptable assembly. Accordingly if the entire solid decal is fastened to the fabric as a separate component by means of a heat process, this would be regarded as an acceptable assembly.
See also, HQ 559691, dated August 30, 1996.
In addition, in HQ 078590, dated April 20, 1987, Customs held that the application of a textile flower applique to the infant crawler by means of heat and pressure was an acceptable assembly operation and similarly, in HQ 555175, dated March 13, 1989, Customs held that an oven cured, inked logotype constitutes a solid, whose application to ladies’ sleepwear by means of heat and pressure constitutes as acceptable assembly operation.
You have provided that the shirts are further processed by screen printing various designs on the shirts in South Africa and then quality control and packaging processes are also performed in South Africa. There is no problem with performing quality control and packaging in South Africa. Furthermore, the screen printing of the design onto the shirt in South Africa with the assembly of the shirt occurring in Botswana is acceptable for preferential treatment under AGOA.
However, in regard to the facts of this case, the subject women’s t-shirt, classified in subheading 6109.10.0040, HTSUSA, is depicted as “Made in South Africa” on the label which is affixed to the subject sample. Nevertheless, this country of origin determination is incorrect and should reflect that the origin of the garment is Botswana.
On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Based upon the origin rules provided in 102.21 (c)(2), the subject shirt is wholly assembled in Botswana and therefore the origin is Botswana.
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of the foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, that: “In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297 at 302 (1940), where the court stated that: “Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods that country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.”
With respect to wearing apparel, Customs has set forth special marking requirements of where the country of origin of the garment must be indicated in order to be considered conspicuous to the ultimate purchaser. Customs ruled in T.D. 54640(6) that shirts, blouses, and sweaters must be marked by means of a fabric label sewn on the inside center of the neck and midway between the shoulder seams or in that immediate area. For the subject knit t-shirts, country of origin marked as “Made in Botswana” to reflect the assembly of the shirt in that country would be acceptable.
HOLDING:
The subject t-shirt is eligible for preferential treatment under the AGOA and is appropriately entered under visa group 5 and preference group E.
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 Harmon, Acting Director
Commercial Rulings Division