VAL-2 OT:RR:CTF:VS H011659 CMR
TARIFF NOs.: 6205.20.2016
Elise Shibles, Esq.
Sandler, Travis & Rosenberg and
Glad & Ferguson, P.C.
505 Sansome Street
Suite 1475
San Francisco, CA 94111
RE: Eligibility of certain men’s woven dress shirts under the DR-CAFTA
Dear Ms. Shibles:
This is in response to your request of August 14, 2008, on behalf of your client, Capital-Mercury Apparel, Ltd. for a binding ruling on the eligibility of certain men’s woven dress shirts with two or more colors in the warp and/or filling for preferential treatment under the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (hereinafter, DR-CAFTA). A sample garment was submitted with your request and will be returned, as requested, under separate cover. A supplemental submission, dated August 29, 2008, was received and taken into consideration in rendering our decision on this matter.
FACTS:
The merchandise at issue consists of various styles of men’s woven dress shirts with two or more colors in the warp and/or filling. The submitted sample is representative of the shirts at issue which will be made of various chief weight cotton fabrics. The sample, style KOH2016, is made of 60 percent cotton/40 percent polyester woven fabric with two or more colors in the warp and the filling. The garment is stated to be of wrinkle resistant oxford fabric. It has a collar size stated in inches, i.e., 16, and a sleeve size stated in a range of inches, i.e., 34/35. There is no other size indication, such as S, M or L, on the garment.
The garment features a pointed, button-down collar, left over right full front opening secured by seven buttons, long sleeves with buttoned plackets and buttoned cuffs, a back box pleat with a fabric loop at the top, and a curved hemmed bottom. Extra buttons, two for the pointed collar and two general purpose, are sewn to the bottom of the right front of the shirt. The shirt is packaged in an individual polybag which identifies its contents, including the neck and
sleeve sizes. The packaging also includes chipboards, pins, plastic sheeting to help the collar remain shaped (collar form), tissue paper, a hang tag identifying the garment as a croft & barrow® wrinkle resistant oxford, and a hangtag identifying the retail store in which the garment will be sold, its price, color, style number and bar code. We note no jet clips were present in the packaging.
In your submission, you note another style, prospective style B, is at issue and indicate that it is identical to style KOH2016, except that it is individually packaged in a polybag with a chipboard, tissue paper, collar form, straight pins, jet clip and hangtag for retail sale purposes.
You submit that the shirts are dress shirts, classifiable in subheading 6205.20.2016 of the Harmonized Tariff Schedule of the United States (HTSUS), and indicate that the shirts will be cut and sewn in Nicaragua or El Salvador from fabric formed outside the territories of the DR-CAFTA parties. The garments will be shipped directly to the United States from the country of assembly. You assert that the shirts are eligible for preferential duty treatment under the DR-CAFTA as originating goods pursuant to General Note 29(n), Chapter 62, Rule 30A and are exempt from the requirement that sewing thread of headings 5204, 5401 or 5508, used to assemble the goods be formed and finished in the territory of one or more of the DR-CAFTA parties pursuant to GN 29(n), Chapter 62, Chapter Rule 4.
In addition, you argue in your supplemental submission that the presence of a single jet clip used in the packaging of a dress shirt (prospective style B) meets the specific language of the DR-CAFTA rule set forth at General Note (GN) 29(n), Chapter 62, Rule 30A, follows generally accepted statutory interpretation and is in accordance with industry practice.
ISSUE:
Do the shirts at issue, represented by the submitted sample, qualify as originating goods eligible for preferential tariff treatment under the DR-CAFTA?
LAW AND ANALYSIS:
The Dominican Republic - Central America - United States Free Trade Agreement (“DR-CAFTA” or “Agreement”) was signed by the governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States on August 5, 2004. The DR-CAFTA was approved by the U.S. Congress with the enactment on August 2, 2005, of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (the “Act”), Pub. L. 109-53, 119 Stat. 462 (19 U.S.C. 4001 et seq.). The Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua and the United States are currently parties to the agreement.
On December 27, 2007, Presidential Proclamation 8213, dated December 29, 2007, was published in the Federal Register (72 Federal Register 73555). The proclamation implemented an amendment to the DR-CAFTA agreed to by the parties and described in sections 1634(a)(2) and 1634(b)(2) of the Pension Protection Act of 2006 (Public Law 109-280, 120 Stat. 780). Section 1634 of the Pension Protection Act authorizes the President to proclaim modifications to the HTSUS, some of which are subject to certain consultation and layover requirements, in order to carry out the amendments agreed to and described therein. The provisions of the DR-CAFTA at issue herein, that is General Note (GN) 29, Chapter 62, Chapter Rule 4 and GN 29, Chapter 62, Rules 30A and 30B, were proclaimed in Presidential Proclamation 8213 as modifications to the HTSUS. These modifications became effective were respect to goods that are entered or withdrawn from warehouse for consumption, on or after August 15, 2008. See 73 Federal Register 46057 (August 7, 2008, Notice by the Office of the United States Trade Representative announcing effective date).
General Note (GN) 29 of the HTSUS implements the DR-CAFTA. GN 29(a) states, in relevant part:
Goods for which entry is claimed under the terms of the Dominican Republic-Central America-United States Free Trade Agreement are subject to duty as set forth herein. For the purposes of this note –
originating goods or goods described in subdivision (a)(ii), subject to the provisions of subdivisions (b) through (n) or this note, that are imported into the customs territory of the United States and entered under a provision –
(A) in chapters 1 through 97 of the tariff schedule for which a rate of duty appears in the “Special” subcolumn of column 1 followed by the symbol “P” or “P+” in parentheses, or
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are eligible for the tariff treatment and quantitative limitations set forth therein in accordance with sections 201 through 203, inclusive, of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (Pub. L. 109-53; 119 Stat. 462)[.]
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GN 29(b) sets forth criteria for determining whether a good (other than agricultural goods provided for in GN 29(a)(ii)) is an originating good for purposes of the DR-CAFTA. GN 29(b) states, in relevant part:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if –
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(ii) the good was produced entirely in the territory of one or more of the
parties to the Agreement, and –
each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note;
and the good satisfies all other applicable requirements of this note; or
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Subdivision (n) referred to in GN 29(b) sets forth the tariff shift method of qualifying as an originating good under DR-CAFTA. GN 29(n), Chapter 62, Rules 30A and 30B, which are applicable to cotton woven shirts, provide:
30A. A change to dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve size stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett (sic) clips, individual polybags and hang tags ready for retail sale, of tariff item 6205.20.20 from any other chapter, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement.
30B. A change to any other good of subheading 6205.20 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement.
GN 29(n), Chapter 62, Chapter Rule 4, provides:
Notwithstanding chapter rule 2, a good of this chapter, other than-
(a) a good of headings 6207 through 6208 (for boxers, pajamas, and nightwear only), subheading 6204.23, 6204.29, 6204.32, 6212.10, tariff item 6202.12.20, 6202.19.90 (for goods subject to cotton restraints), 6202.91.20 (for goods for women), 6202.92.15, 6202.92.20 (other than padded, sleeveless jackets without attachments for sleeves), 6202.93.45, 6202.99.90 (for goods subject to cotton restraints), 6203.39.90 (for goods subject to wool restraints), 6204.12.00 (for jackets imported as parts of suits), 6204.13.20, 6204.19.20, 6204.19.80 (for jackets imported as parts of suits and subject to cotton restraints, or for goods subject to man-made fiber restraints), 6204.22.30 (for garments described in heading 6202, or for jackets and blazers described in heading 6204), 6204.33.20, 6204.39.80, 6204.42.30 (for garments for girls, other than of corduroy), 6204.43.40 (for garments for girls), 6204.44.40 (for garments for girls), 6205.20.20 (for dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve size stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett (sic) clips, individual polybags and hang tags ready for retail sale), 6205.30.20 (for dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve size stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett (sic) clips, individual polybags and hang tags each for retail sale), 6209.20.10, 6210.30.90 (for garments other than of linen), 6210.50.90 (for anoraks), 6211.20.15 (for anoraks including ski-jackets), windbreakers, and similar articles (including padded, sleeveless jackets), for women or girls, of cotton, imported as parts of ski suits), 6211.20.58 (for goods of cotton), 6211.41.00 (for jackets and jacket-type garments excluded from heading 6202), 6211.42.00 (for track suits, other than trousers, or for jackets and jacket-type garments excluded from heading 6202) or 6217.90.90 (for coats and jackets, of cotton); or
(b) men's and boys' and women's and girls' suits, trousers, suit-type jackets and blazers, vests and women's and girls' skirts of wool fabric, of subheadings 6203.11, 6203.31, 6203.41, 6204.11, 6204.31, 6204.51, 6204.61, 6211.39 or 6211.41, provided that such goods are not made of carded wool fabric or made from wool yarn having an average fiber diameter of less than or equal to 18.5 microns,
containing sewing thread of heading 5204, 5401 or 5508 shall be considered originating only if such sewing thread is both formed and finished in the territory of one or more of the parties to the Agreement.
GN 29(n), Chapter 62, Chapter Rule 2, referenced in Chapter Rule 4 above, provides:
For purposes of determining whether a good of this chapter is originating, 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, 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.
CBP agrees that the submitted woven cotton shirt is a dress shirt classifiable in subheading 6205.20.2016, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). However, we disagree with your assertion that Rule 30A, cited above, applies to this garment. Rule 30A is very specific with regard to packaging requirements and requires chipboards, pins, jet clips, individual polybags and hang tags ready for retail sale. The submitted sample does not have any jet clips as part of its packaging and therefore, the garment does not fit the description of garments to which Rule 30A applies. As Rule 30A does not apply to the submitted woven cotton shirt, we must apply Rule 30B.
Since the cotton woven shirt is cut and sewn in Nicaragua or El Salvador from fabric formed outside the DR-CAFTA parties, it does not qualify as an originating good under the DR-CAFTA because a tariff shift from cotton woven fabric is precluded under Rule 30B. As such, there is no need to discuss Note 29(n), Chapter 64, Chapter Rule 4 with regard to this garment.
We note that if the cotton woven shirt is cut and sewn in Nicaragua, it may qualify for a tariff preferential rate under subheading 9915.61.01, HTSUS, which provides for “Apparel goods of Nicaragua, of cotton or man-made fibers . . ., the foregoing described in U.S. note 15(b) to this subchapter and imported into the customs territory of the United States in aggregate quantities not to exceed the quantities set forth in U.S. note 15(c) to this subchapter.” U.S. Note 15(b), Subchapter XV, Chapter 99, lists men’s shirts of cotton fiber, classifiable in subheading 6205.20.20, HTSUS, at paragraph (22). U.S. Note 15(a), Subchapter XV, Chapter 99, provides that the rate of duty provided for in subheading 9915.61.01 in the “Special” subcolumn of rates of duty of column 1 will apply to goods of Nicaragua, subject to the limit set forth in subdivision (c) of the note, provided that the goods meet the applicable conditions for preferential tariff treatment under GN 29, other than the condition that they be originating goods, and the goods are both cut or knit to shape, and sewn or otherwise assembled, in the territory of Nicaragua.
With regard to prospective style B, your supplemental submission argues that it differs from the submitted sample only in its packaging and in that regard, the difference is that prospective style B’s packaging includes a single jet clip. You argue, citing to 1 U.S.C. § 1, that in interpreting the language at issue, unless that contest indicates otherwise, “words importing the plural include the singular.” The language describing the required packaging is in the plural as it refers to dress shirts in the plural. It would make little sense, and with this CBP agrees, to read “chipboards” and “polybags” as requiring the use of more than one of these items in the packaging of an individual dress shirt. Therefore, you argue that there is nothing in the context of the language at issue to require that some of the listed packaging items be read in the singular and some in the plural. Thus, you assert there is no requirement that more than one jet clip or one pin be used in packaging a dress shirt in order for the packaging requirement to be met. You additionally argue that current industry practice is to reduce packaging and therefore a single jet clip would comport with industry practice. As prospective style B is packaged with a single jet clip, you believe it meets the statutory requirement of GN 29(n), Chapter 62, Rule 30A.
CBP agrees that the use of a single jet clip in the packaging of prospective style B, along with the other packaging materials, meets the requirements of GN 29(n), Chapter 62, Rule 30A. Therefore, prospective style B, cut and sewn in Nicaragua or El Salvador from fabric formed outside the territories of the DR-CAFTA parties, qualifies as an originating good pursuant to GN 29(n), Chapter 62, Rule 30A. Additionally, prospective style B is a good excepted from GN 29(n), Chapter 62, Chapter Rule 4 which requires sewing thread of heading 5204, 5401 or 5508, contained in a good to be formed and finished in the territory of one or more the DR-CAFTA parties for the good to qualify as originating under the DR-CAFTA.
HOLDING:
The submitted garment, style KOH2016, does not qualify for preferential tariff treatment as an originating good under the DR-CAFTA.
Prospective style B does qualify for preferential tariff treatment as an originating good under the DR-CAFTA and is exempt from the requirement that any sewing thread of heading 5204, 5401 or 5508 contained in the good be formed or finished in the territory of one or more of the parties.
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,
Monika R. Brenner, Chief
Valuation and Special Programs Branch