CLA-2 RR:CR:TE 967494 TMF
Ms. Janet Reiner
Stonepath Logistics
1930 Sixth Avenue South, Suite 200
Seattle, WA 98134
RE: Classification of men’s polo-style shirts under the African Growth and Opportunity Act; self-fabric collars and knit-to-shape collars and cuffs
Dear Ms. Reiner:
This letter is in response to your request, on behalf of Sunrise Identity, to Customs and Border Protection (CBP) for a binding ruling on two styles of men’s polo-style garments. Your request and two samples were forwarded to this office for our reply.
FACTS:
Style 51E5Q is a men’s pullover garment constructed from 100 percent cotton, pique knit fabric that measures 8 stitches per linear centimeter counted in the horizontal direction and 17 stitches per linear centimeter counted in the vertical direction. The garment has a flat knit spread collar; a partial front opening with a three button closure; narrow twill tape binding covering the rear neck seam; a half-moon fabric sweat patch at the rear neckline; short sleeves with rib knit cuffs; and a straight, hemmed bottom. The same garment will be imported in boys’ sizes as Style 54E5Q.
Style 51E0Q is a men’s shirt constructed from 100 percent cotton, jersey knit fabric that measures 13 stitches per linear centimeter counted in the horizontal direction and 17 stitches per linear centimeter counted in the vertical direction. The shirt has a two-layer self-fabric spread collar; a partial front opening with a two button closure; narrow self-fabric binding covering the rear neck seam; a half-moon fabric sweat patch at the rear neckline; short, hemmed sleeves; and a straight, hemmed bottom. The same garment will be imported in boys’ sizes as Style 54E0Q.
You state in your submission that the pique knit fabric and the jersey knit fabric for the garment body of each style will be knit in China and sent in rolls to Kenya where the fabric will be cut to shape and assembled into garments. You also state that the knit to shape collars and cuffs in styles 51E5Q and 54E5Q will also be knit in China and sent to Kenya for assembly into the finished garments. The buttons and labels will be sourced in China.
Although not stated, we presume that the garments will be imported directly to the United States.
ISSUE:
Whether the two men’s shirts, identified as styles 51E5Q and 51E0Q, (which will also be produced for boys in styles 54E5Q and 54E0Q) are eligible for preferential 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 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. Kenya was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59321). It was determined to be eligible for textile benefits under the AGOA by the USTR effective January 18, 2001 (66 Fed. Reg. 7836).
The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (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).
The subject garment styles are distinct in this manner: Styles 51E0Q and Style 54E0Q have self-fabric spread collars. Styles 51E5Q and 54E5Q contain foreign-origin flat knit spread collars and rib knit cuffs that are knit to shape in China and sent to Kenya for assembly into the finished garments.
Classification of the Subject Garments
Styles 51E5Q and 54E5Q are classifiable in subheading 6110.20.2065, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for "Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: Of cotton: Other…Other: Other: men’s or boys.” The general column one rate of duty is 16.5 percent ad valorem.
Style 51E0Q is classifiable in subheading 6105.10.0010, HTSUSA, which provides for “men’s or boys’ shirts, knitted or crocheted: of cotton: mens’.” The column one rate of duty is 19.7 percent ad valorem.
Style 54E0Q is classifiable in subheading 6105.10.0030, HTSUS, which provides for “men’s or boys’ shirts, knitted or crocheted: of cotton: boys’: other. The general column one rate of duty is 19.7 percent ad valorem.
Eligibility under Subheading 9819.11.12, HTSUSA
Apparel articles wholly assembled in a sub-Saharan African lesser-developed beneficiary country (LDBC) and directly imported into the U.S. are entitled to duty free and quota-free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, 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 articles, 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, 2007, inclusive.
U.S. Note 2(d) lists Kenya as qualifying for designation as a lesser-developed beneficiary country. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12, HTSUSA.
The term "wholly assembled in", when used with reference to a textile or apparel article in the context of one or more beneficiary countries or one or more lesser developed beneficiary countries, means:
[A]ll of the components of the textile or apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or one or more lesser developed beneficiary countries. See 19 C.F.R. 10.212.
The term "Knit-to-shape components”, when used with reference to textile components, means:
Components that are knitted or crocheted from a yarn directly to a specific shape containing a self-start edge. Minor cutting or trimming will not affect the determination of whether a component is "knit-to-shape." Id.
Subheading 9819.11.12, HTSUSA, allows for the use of foreign yarn or fabric in the production of apparel articles, and specifically provides that the country of origin of the fabric is not a consideration. Since the country of origin of the fabric is not relevant to the receipt of AGOA lesser-developed beneficiary country preferential tariff and quota treatment (provided the other requirements of the Act are met), the fact that the fabric for the self-fabric collars used in styles 51E0Q and 54E0Q originates in China is not relevant.
However, in the case of styles 51E5Q and 54E5Q, both which contain foreign-origin knit-to-shape collars, we refer to U.S. Note 3(a)(iv), Subchapter XIX, Chapter 98, which states:
Any article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains-
(iv) any of the following components that do not meet the requirements set forth in the provisions of this subchapter: any collars or cuffs (the foregoing cut or knit-to-shape), drawstrings, shoulder pads or other padding, waistbands, belt attached to the article, straps containing elastic, or elbow patches.
Therefore, although styles 51E5Q and 54E5Q contain foreign-origin knit-to-shape collars, their inclusion would not preclude the subject garments from receiving preferential treatment under the AGOA. Rather, we need to consider the inclusion of the foreign-origin buttons and labels on the four styles of garments for purposes of determining the instant garments’ eligibility for preferential treatment.
Findings and Trimmings
According to your submission, the buttons and labels that will be used in the instant garments will be sourced from China. We refer you to Note 3, Subchapter XIX, Chapter 98, which provides, in relevant part, that:
[a]n article otherwise eligible for preferential treatment under any provision of [subchapter XIX] shall not be ineligible for such treatment because the article contains—
(i) findings or 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. Elastic strips are considered findings or trimmings only if they are each less than 2.54 cm in width and used in the production of brassieres. For purposes of articles described in subheading 9819.11.06 and 9819.11.30, sewing thread shall not be considered to be findings or trimmings.
While "findings and trimmings" for purposes of the AGOA was not specifically defined, the examples set forth above, such as zippers, buttons, decorative lace trim and labels are indicative of the types of components which are considered to be within the purview of this provision. The exception for findings and trimmings was necessarily intended to be of a restrictive nature, as the intent of the statute was to ensure that all fabric components be formed and cut in the U.S. and sub-Saharan African beneficiary countries. "Findings" are generally accepted to be sewing essentials used in textile goods while "trimmings" have been defined as "decoration or ornamental parts." See M. Picken, The Fashion Dictionary (1973). For a foreign textile item to fall within the terms of the exception, it must be either named in the examples of findings or trimmings, or be substantially similar to those articles. See HQ 562349 dated September 12, 2003.
In this case, the subject buttons and labels are provided within Note 3, Subchapter XIX, Chapter 98, as findings and trimmings. However, you did not provide the values for them. Therefore, provided that their value does not exceed the 25 percent limitation of the “findings and trimmings” exception, they will not preclude the instant garments from preferential treatment under the AGOA.
HOLDING:
The two men’s shirts, identified as styles 51E5Q and 51E0Q, (which will also be produced for boys in styles 54E5Q and 54E0Q) qualify for AGOA preference in subheading 9819.11.12, HTSUSA, provided the value of the findings and trimmings used in each of the subject garments does not exceed 25 percent of the total cost of the components in each of the subject garments.
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