CLA-2 RR:CR:TE 966491 SG
Houston Port Director
Bureau of Customs and Border Protection
2350 North Sam Houston Parkway East
Houston, Texas 77032-3126
Re: Request for Further Review of Protest No.: 5301-02-100409; African Growth and Opportunity Act; Subheading 9819.11.21, HTSUSA; "Short Supply" Provision; Visa Preference Grouping 8; GN 12(t)62.SR30; Regional Fabric, Visa Preference Grouping 4 Dear Port Director: The purpose of this correspondence is to address Protest Number 5301-02-100409, dated October 24, 2002, which was forwarded to this office for further review. The Importer of Record and Protesting Party is TMW Purchasing LLC. The Protesting Party is represented by W.R. Zanes & Co. of LA., Inc.
FACTS
The article at issue is a men's 100 percent cotton, long sleeve woven shirt with one chest patch pocket. The protestant has submitted a declaration indicating that the cotton woven fabric is produced in China, the cotton interlining is produced in South Africa, the cutting, sewing, trimming, finishing, label placement and packing is done in Mauritius. The invoice submitted for the fabric shows that it is a twill weave, yarn dyed, 58/9 width, weight is 142.13 (gram/sqm), with a minimum yarn count of 127.4. We are advised that the fabric, when entered into Mauritius, was classified in subheading 5208.49.2000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The protestant claims that the shirt is classified under subheading 6205.20.2015, HTSUSA, the provision for men's cotton shirts with two or more colors in the warp and/or the filling. When entered into the United States, the Textile Certificate of Origin indicated that the merchandise fell into Preference Group H (short supply), and a visa
for visa group 8 was submitted. The shirts were entered under subheading 9819.11.21, HTSUS.
The Customs Service, now Customs and Border Protection (CBP), determined that the shirt is constructed of an even sided 4 thread twill, also known as a cross twill and therefore the merchandise did not meet the criteria to be classified under subheading 9819.11.21, HTSUS. It therefore was not eligible for entry under grouping 8 (short supply). A new visa for grouping 4 (regional fabric) was requested. When the importer was unable to provide a visa for grouping 4 for the merchandise imported from Mauritius, a rate advance was issued. The importer subsequently filed a Protest challenging the Customs Service determination. It is protestant's position that the visa for grouping 8, which was presented upon entry, is correct, and that a new visa for grouping 4, as required by Customs, could not be applied for because the fabric used to produce the shirts was not regional fabric as it did not originate in Mauritius. It is the view of the importer that the fabric is on the short supply list. Since the fabric was cut and assembled into shirts in Mauritius, the importer believes that the shirts are entitled to AGOA Preferential grouping 8, and qualify as originating in Mauritius, and meet the criteria for classification under subheading 9819.11.21, HTSUS.
ISSUE:
Whether the fabric from which the shirts are made is a short supply fabric under the North American Free Trade Agreement (NAFTA)?
Whether the shirts, manufactured as described above, are eligible for duty-free treatment under subheading 9819.11.21, HTSUS, which requires a visa for grouping 8.
Was the proper visa presented? LAW AND ANALYSIS:
The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation 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 prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty- and quota-free benefits extended to textile and
apparel articles under the Act. Mauritius was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on March 12, 2002,
66 Fed. Reg. 14425. It was determined to be eligible for textile benefits under the AGOA by the USTR effective March 7, 2001. See, 66 Fed. Reg. 14425, dated March 12, 2001.
The provisions implementing the textile provisions of the AGOA in the HTSUS are contained, for the most part, in subchapter XIX, Chapter 98, HTSUS (one provision may be found in 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at §§ 10.211 through 10.217 of the Customs Regulations (19 CFR 10.211 through 10.217).
Protestant claims that the fabric from which the shirts are made are on the NAFTA short supply list and that therefore the goods are eligible for duty and quota free entry under preference grouping 8. We note that there is no definitive list of "short supply" fabrics or yarns for purposes of the NAFTA. The determination of short supply fabrics or yarns is based upon the various provisions of NAFTA and whether, under NAFTA, for the particular apparel article at issue, certain fabrics or yarns may be sourced from outside the NAFTA parties for use in the production of an "originating" good. If sourcing of certain fabrics or yarns outside the NAFTA parties is allowed, then those fabrics or yarns are deemed to be in "short supply."
The provision commonly referred to as the "NAFTA short supply" provision is contained in subheading 9819.11.21, HTSUS. It was created for the entry of articles eligible for
preferential treatment under section 112(b)(5)(A) (see Presidential Proclamation 7350, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed.
Reg. 59327)). This subheading provides for the duty-free entry of: Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries from fabrics or yarn that is not formed in the United States or a beneficiary country, 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……
Accordingly, if an apparel article is "of" a fabric that is considered to be a "short supply" fabric under GN 12(t), it is considered to be an originating good providing it meets the other applicable requirements of GN 12(t).
The fabric from which the shirts are made is formed in China. Thus, in order to determine whether the shirts are eligible for preferential treatment under the "short supply" provision of the AGOA, we must determine whether the non-originating fabric
used in the production of the shirts is permitted under General Note 12(t), HTSUSA, for the production of an originating shirt.
General Note 12(t)/62.SR30, HTSUSA, provides that:
Subheading rule: 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:
(a) Fabrics of subheadings 5208.21, 5208.22, 5208.29, 5208.31, 5208.32, 5208.39, 5208.41, 5208.42, 5208.49, 5208.51, 5208.52, or 5208.59, HTSUS, of average yarn number exceeding 135 metric;
* * *
(f) Fabrics of subheading 5208.42, and 5208.49, not of square construction, containing more than 85 warp ends and filling picks per square centimeter, of average yarn number exceeding 85 metric;
* * *
Protestant claims that when the man-made fiber fabric, of which of the shirt is constructed, leaves China, it is classified in subheading 5208.49.20, HTSUS, the provision for "Woven fabrics of cotton, containing 85 percent or more by weight of cotton, weighing not more than 200 g/m²: Of yarns of different colors: Other fabrics: Satin weave or twill weave." Customs conducted a microscopic analysis of the shirting fabric; it indicated that it is a 4-thread twill weave of cross twill construction. Subheading 5208.43.00, HTSUSA, specifically provides for woven fabrics of cotton, of yarns of different colors, 3-thread or 4-thread twill, including cross twills. Subheading 5208.49.20, HTSUS, is a "basket" provision for other fabrics of yarns of different colors of twill weave that cannot be classified elsewhere.
We must ascertain under which of these two competing provisions the fabric of which the subject shirt is manufactured is classified.
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 3(a) states, in part, that the heading which provides the most specific description shall be preferred to headings providing a more general description. GRI 6 permits a comparison of subheadings within the same heading, applying Rules 1 through 5 with appropriate substitution of terms, on the
understanding that only subheadings at the same level are comparable.
In the event that merchandise is not found to be classifiable under a specific subheading, it is then classified as "other." The "other," or "basket," provision of a subheading should be used only if there is no tariff category that more specifically covers the merchandise. See DMV USA v. United States, SLIP OP. 2001-99, 9 (C.I.T. August 10, 2001); citing Rollerblade, Inc. v. United States, 116 F. Supp. 2d 1247, 1251 (C.I.T. 2000); see also GRI 3(a) ("The heading which provides the most specific description shall be preferred to headings providing a more general description.").
Thus it is clear that classification in the subheading providing for other fabrics of twill weave is only appropriate when there is no previously occurring tariff provision that covers the fabric more specifically. As we stated above, the fabric was microscopically revealed to be a 4-thread twill. Four-thread twills are specifically described in subheading 5208.43.00, HTSUSA. While subheading 5208.49.20, HTSUS, describes twill weave fabrics, it is a basket provision; subheading 5208.43.00, HTSUS, describes a particular type of twill weave fabric-that is, a 3-thread or 4-thread twill. Therefore, subheading 5208.43.00, HTSUS, provides a more specific description of the fabric in question. Accordingly, the fabric of which the shirt is made is properly classifiable under subheading 5208.43.00, HTSUS.
The Subheading Rule of General Note 12(t)/62.SR30, HTSUSA, does not provide for fabric classified in subheading 5208.43, HTSUS. Thus the non-originating fabric used in the production of the sample shirt is not a "short supply" fabric under the NAFTA. Accordingly, the shirts are not eligible for duty- and quota-free treatment under subheading 9819.11.21, HTSUSA.
The shirts are not eligible for entry under the visa for grouping 8 (short supply) which was presented.
The Port requested a visa for grouping 4. We must therefore consider whether the shirts are eligible for preferential AGOA treatment under visa grouping 4 (the regional fabric provision).
A provision for apparel articles assembled in sub-Saharan African countries from regionally formed fabric is set forth in subheading 9819.11.09, HTSUSA, which provides as follows: Apparel articles wholly assembled in one or more such countries from fabric wholly formed in one or more such countries from yarns originating either in the United States or one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 and are wholly formed and cut in one or more such countries), or from components knit-to-shape in one or more such countries from yarns originating either in the United States or in one or more such countries, or apparel articles wholly formed on seamless knitting machines in such a country from yarns originating either in the United States or one or more such countries, subject to the provisions of U.S. note 2 to this subchapter.
Chapter 98, Subchapter XIX, U.S. Note 2, HTSUSA, sets forth limitations on the preferential treatment available under this provision of the AGOA. In order to qualify for entry under this provision the merchandise in issue must consist of apparel articles wholly assembled in Mauritius or another beneficiary sub-Saharan African country (SSA) from fabric that was wholly formed in Mauritius or another SSA from yarns that originated in Mauritius, another SSA, or the United States. Protestant has advised us that the fabric was woven in China. A garment assembled in Mauritius from fabric formed in China is not eligible to receive the preferential tariff and quota benefits provided for in subheading 9819.11.09, HTSUSA, the "regional fabric" provision of the AGOA.
We note that the AGOA does allow for duty free entry of apparel articles made of foreign fabric and yarn if wholly assembled in a lesser developed country (LDC) and directly imported into the U.S., subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUSA, which provides as follows: Apparel articles wholly assembled or knit-to-shape and wholly assembled or both, in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter regardless of the country of origin of the fabric or the yarn used to make such article, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade and continuing through September 30, 2004, inclusive
Unfortunately Mauritius is not a lesser developed beneficiary country for purposes of the AGOA.
Accordingly, visa grouping 4, which provides for duty free and quota free treatment of apparel articles from fabric originating in a SSA is not applicable.
The protest is DENIED.
HOLDING
The shirts are not eligible to receive preferential tariff and quota benefits under either the NAFTA "short supply" or the "regional fabric" preference groups under the African Growth and Opportunity Act. Neither visa group 4 nor visa group 8 is applicable.
The shirts are classifiable under subheading 6205.20.2015, HTSUSA, the provision for "Men's or boys' shirts: Of cotton: Other: Dress: With two or more colors in the warp and/or filling: Men's". The general column one rate of duty is 19.8 percent ad valorem and the textile restraint category is 340.
The designated textile and apparel category may be subdivided into parts. If so, the visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest the importer check, close to the time of shipment, the Textile Status Report for Absolute Quotas, previously available on the Customs Electronic
Bulletin Board (CEBB), which is now available on the CBP website at www.cbp.gov.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, the importer should contact the local CBP office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and the Protest (Customs Form 19) to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing the decision. The Office of Regulations & Rulings will make this decision available to Customs personnel and to the public on the Customs Service Home Page on the World Wide Web, www.cbp.gov, by means of the Freedom of Information Act and by other methods of public distribution sixty days from the date of this decision. Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division