CLA-2 RR:CR:TE 967333 SG
Arthur W. Bodek, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
399 Park Avenue, 25th floor
New York, New York 10022-4877
RE: African Growth and Opportunity Act; AGOA Acceleration Act of 2004; Women's Woven Pants; Waistband Curtain; Waistband; South Africa; Unfinished Component; Findings, Trimmings
Dear Mr. Bodek: This is in response to your letter dated August 12, 2004, requesting a binding ruling on the eligibility of women's pants manufactured in South Africa for preferential treatment under the African Growth and Opportunity Act (AGOA).
FACTS: You have submitted samples of two pairs of women's pants. Both styles are constructed of 63 percent polyester, 33 percent rayon, and 4 percent spandex woven fabric. Style P96-8172 is fully lined and features a side zipper opening. Style P96-1315 features a front zipper opening with two-button closure, belt loops, and two sewn in pockets
You advise that the garments will undergo the same manufacturing process as described below.
Body fabric:
Yarn made in South Africa
Fabric woven in South Africa
Hanger loops:
Yarn made in South Africa
Fabric woven in South Africa
Pocketing, linings, interlinings:
Yarn made in United States
Fabric woven in South Africa
Zipper, hook & eye, buttons, labels, hang tags:
Originate in Swaziland, Hong Kong, Korea, or elsewhere.
Knit waistband fusing
Polyester knit material originates in Italy.
Waistband curtain:
Yarn origin unstated
Fabric woven in Hong Kong
Subassembled in Hong Kong
Imported into South Africa on rolls
You advise that the following steps will be done in South Africa:
The South African body fabric and the South African lining/interlining/pocketing fabrics will be cut and sewn to form the garment body and the garment's lining/interlining/pocketing.
The curtain waistband will be attached to the garment body.
The zipper, hook & eye, buttons, labels, hangtags and hanger loops will be attached to the garment.
The garment will then be shipped directly to the United States.
ISSUE: Whether the pants are eligible for preferential tariff and quota treatment under the African Growth and Opportunity Act (AGOA)?
LAW AND ANALYSIS: The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. The AGOA was amended and expanded by the AGOA Acceleration Act of 2004 (Public Law 108-274) enacted on July 13, 2004
(AGOA III). The benefits conferred 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 Africa 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. The Republic of South Africa is a designated "beneficiary sub-Saharan African country" and has been declared by the U.S. Trade Representative to have satisfied the requirements of the Act protecting against transshipment. See Presidential Proclamation 7350, 65 Fed. Reg. 59321 (2000); 66 Fed. Reg. 14425 (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 subheading 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).
Apparel articles wholly assembled in a sub-Saharan African beneficiary country from fabric wholly formed and cut in such country and directly imported into the U.S. are entitled to duty free status, subject to certain restrictions. 19 U.S.C. 3721(b)(3), as amended by the AGOA III provides as follows: Apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub- Saharan African countries from yarn originating in the United States or
one or more beneficiary sub-Saharan African countries or former beneficiary sub- Saharan African countries, or both (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in one or more beneficiary sub-Saharan African countries), or from components knit-to-shape in one or more beneficiary sub-Saharan African countries from yarns originating
in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary sub-Saharan African countries, or both, or apparel articles wholly formed on seamless knitting machines in a beneficiary sub- Saharan African country from yarns originating in the United States or one or more beneficiary sub-Saharan African countries or former beneficiary sub-
Saharan African countries, or both, whether or not the apparel articles are also made from any of the fabrics, fabric components formed, or components knit to shape described in paragraph (1) or (2) (unless the apparel articles are made exclusively from any of the fabrics, fabric components formed, or components knit to shape described in paragraph (1) or (2),.…
Such articles are entered under subheading 9819.11.09, HTSUS. 19 U.S.C. 3721(b)(3)(A), as amended by AGOA III, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.09.
In the samples before us, the yarn and the fabrics making up the body of the pants as well as the fabrics of the pocketing, linings, and interlinings, are wholly formed in South
Africa, and are cut and wholly assembled into pants in South Africa. The fabrics used in the waistband curtain are woven in Hong Kong and sub-assembled in Hong Kong, then
imported into South Africa in rolls. In addition, the zipper, hook & eye, buttons, labels, hangtags, and waistband interlining fusing are foreign. Accordingly, the garments would be entitled to be classified in subheading 9819.11.09, HTSUS, subject to the quantitative limits set forth in 19 U.S.C 3721(b)(3)(A), provided the zipper, hook & eye, buttons, labels, hang tags, and fusing are considered findings or trimmings and the waistband curtain is eligible under the Special Rules, as amended, (19 U.S.C. 3721(d)) by AGOA III.
Findings & Trimmings Requirements
Subchapter XIX, U.S. Note 3, HTSUSA, provides, in pertinent part: (a) An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains—(i) findings and trimmings of foreign origin, if the value of such findings
and trimmings does not exceed 25 percent of the cost of the components of the assembled article[.]
* * *
(b) For purposes of subdivision (a)(i) above, findings or trimmings eligible under such subdivision include sewing thread, hooks and eyes, snaps, buttons, "bow buds", decorative lace trim, elastic strips, and zippers (including zipper tapes) and labels.
* * *
See also 19 C.F.R. 10.213(b)(1)(i).
Therefore, in regard to the facts of this case, the zipper, hook & eye, buttons, labels, and hangtags of foreign origin and used in the garments before us are acceptable as findings under AGOA.
In our view the waistband curtain is not analogous to findings and trimmings and thus is not considered a finding or trimming.
To determine if the waistband curtain material you submitted which is imported into South Africa in rolls may be used in apparel that will qualify for preferential treatment
under the AGOA, we must first decide whether the sample curtains sewn onto the body fabric is a foreign formed textile component which may be considered an unfinished waistband under the Special Rules.
To determine whether the submitted sample is a textile component which may be considered an unfinished waistband, we turn to General Rule of Interpretation 2(a), which states that:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
Accordingly, the first part of GRI 2(a) extends the scope of an article provision to cover not only the complete article, but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article. See Explanatory Note (I) to GRI 2(a). The second part of the rule provides that an article presented unassembled is classified in the same heading as the assembled article. See Explanatory Note (V) to GRI 2(a). In addition, an unfinished article possessing the essential character of the finished article remains classifiable as the finished article when presented unassembled. See Explanatory Note (VI) to GRI 2(a).
In the instant case, the submitted sample segment of the waistband curtain is constructed of several different fabrics, including an interlining stiffener. These foreign origin fabrics are folded and sewn together into a waistband curtain in Hong Kong. The waistband curtain is formed in continuous lengths and exported to South Africa in unmarked rolls. In South Africa it is subsequently cut and becomes the inside portion of the waistband. We note that the waistband curtain actually used on the sample garments is approximately two inches wide and more than twenty inches long and contains at least one finished edge. We believe that the sewing process in which a number of different fabrics are folded and sewn together to create the waistband curtain, which occurs before importation to sub-Saharan Africa, confers the identity as
an identifiable waistband component. At the factory in South Africa, the waistband curtains are cut to length based upon waist size specifications for each size, and attached to the garment fabric to form the completed waistband.
The waistband curtain is dedicated for use and possesses the approximate shape of a finished waistband. It has both an unfinished edge to be sewn into the pants and a finished edge. Although the waistband curtain has not been clearly demarcated to identify the start and end of each component, it requires only minimal cutting to the
length of the waistband. Attaching these resulting waistband curtains to the body fabric forms the waistband. In interpreting the HTSUS, we have construed the term "essential character" to mean the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article." See HQ 956528, dated November 29, 1994. Factors found to be relevant in other contexts are the significance of the imported components or their role in relation to the use or overall functioning of the completed article and, to the extent that it validates that comparison, the cost or value of the completed article versus the cost or value of the imported merchandise. See HQ 956410, dated October 14, 1994. Based upon our review of your samples, we find that the waistband curtains have the essential character of a waistband. Therefore, by application of GRI 2(a) it is our view that the rolls of waistband curtains as imported have the essential character of waistbands, ones that are entered unfinished. Accordingly, the waistband curtains are considered waistbands for purposes of the Special Rule for Certain Components (19 U.S.C. 3721(d)(3)). This provision provides that an apparel article otherwise eligible for preferential treatment under the AGOA will not be ineligible because the article contains a waistband that does not meet the requirements set forth in subsection (b), regardless of the country of origin of the waistband.
Apparel wholly assembled in South Africa containing waistband curtains formed abroad, as described above, would be eligible for preferential tariff treatment under subheading 9819.11.09, HTSUS.
We must now determine whether the fusing material, which you advise is made in Italy, may be used in the pants that otherwise would qualify for preferential treatment under the AGOA. In HQ 560567, dated January 6, 1998, we determined that "fusible material is more analogous to lining or pocketing" than findings and trimmings. The fusible material was determined to be a fabric component. Since the fusing material does not meet the production requirements set forth in 19 U.S.C. 3721(b)(3), the fusing material disqualifies the women's pants from duty-free treatment.
HOLDING
The knitted material fused along the inside of the pants to add additional strength to the waistband is not formed in the United States or a beneficiary country. Therefore it is
not a finding or a trimming and it does not meet the production requirements of 19 U.S.C. 3721(b)(3), the use of the knit fusible material will disqualify otherwise eligible garments for preferential tariff and quota treatment under the AGOA.
The women's pants, style P96-8172 and P96-1315, are not eligible to receive the preferential tariff and quota benefits of the African Growth and Opportunity Act. They are not eligible for duty-tree treatment under subheading 9819.11.09, Harmonized Tariff Schedule of the United States.
The pants would be classified in subheading 6204.63.3510, HTSUSA, which provides, in pertinent part, for women’s trousers of synthetic fibers, dutiable at 28.6 percent ad valorem.
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 CBP officer handling the transaction
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division