CLA-2 OT:RR:CTF:TCM H058923 EGJ
Mr. Gary Epstein
By Design Apparel, Inc.
1370 Broadway
New York, NY 10018
RE: Modification of NY L84803; Eligibility of shirt and tie sets under the CBTPA
Dear Mr. Epstein:
This letter is to inform you that U.S. Customs and Border Protection (CBP) has reconsidered New York Ruling Letter (NY) L84803, issued to you on June 2, 2005, concerning, in relevant part, the eligibility of a men’s woven shirt and tie set for preferential treatment under the Caribbean Basin Trade Partnership Act (CBTPA). The merchandise was determined to be a set ineligible for preferential treatment under the CBTPA because the foreign fabric tie, as part of the set, is an accessory ineligible for CBTPA preference. We have reviewed that ruling and found it to be in error with respect to the analysis of the eligibility of the shirt and tie set for preferential treatment. Therefore, this ruling modifies NY L84803.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice of the proposed modification was published on March 31, 2010, in the Customs Bulletin, Volume 44, No. 14. CBP received no comments in response to the notice.
FACTS: The merchandise at issue was described as follows in NY L84803:
The submitted sample is a men’s shirt and tie set. The shirt is constructed from 55% cotton, 45% polyester, solid color, dyed, woven fabric. The shirt features a left over right full front opening with seven button closures; a point collar; long sleeves with buttoned cuffs; a pocket on the left chest; and a curved, hemmed bottom. The shirt is labeled with collar and sleeve sizes (i.e., 16, 34/35) and is packaged in a retail polybag with a coordinating color, 100% polyester, woven fabric tie.
You state that the yarns used in the shirt fabric are spun in China and that the fabric will be woven and dyed in China. The shirt fabric is sent to the Dominican Republic where it is cut and sewn into finished garments. You also state that the coordinating tie is made in Korea from fabric that is woven in Korea from yarns that are spun in Korea.
ISSUE:
Do the men’s shirt and tie sets qualify for duty-free treatment under the CBTPA?
LAW AND ANALYSIS:
The CBTPA provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination 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 implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA. The Dominican Republic was designated a beneficiary country by Presidential Proclamation 7351, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 10, 2000 (see 65 Fed. Reg. 60236).
The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§ 10.221 through 10.228 of the CBP Regulations (19 CFR 10.221 through 10.228).
The applicable Chapter 98 provisions provide as follows:
9820 Articles imported from a designated beneficiary Caribbean Basin
Trade Partnership country enumerated in general note 17(a) to the tariff schedule:
9820.11.03 Apparel articles of chapter 61 or 62 sewn or otherwise assembled in one or more such countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States, from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 and are wholly formed and cut in the United States), the foregoing which (1) are embroidered or were subjected to stone-washing, enzyme-washing, acid washing, permapressing, oven-baking, bleaching, garment-dyeing, screen printing or other similar processes, (2) but for such embroidery or processing are of a type otherwise described in heading 9802.00.80 of the tariff schedule, and (3) meet the requirements of U.S. note 2(a) to this subchapter
9820.11.24 Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries from fabrics or yarn not formed in the United States or in one or more such countries, 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.
The fabric is formed in China and it is assumed that the yarns are not
formed in the U.S. or a CBTPA beneficiary country. Thus, in order to determine whether the apparel articles are eligible for preferential treatment under the CBPTA, we must determine whether the apparel articles would be considered originating goods under General Note 12(t), HTSUS. See subheading 9820.11.24, HTSUS. General Note 12(t), HTSUS, sets out the tariff shift rules for determining whether non-originating materials used in the production of a good have been transformed into originating goods under NAFTA.
To determine the applicable tariff shift rule, we must determine the proper classification of the shirt and tie sets. The shirts are classifiable under heading 6205, HTSUS, as “men’s or boys’ shirts” and the ties are classifiable under heading 6215, HTSUS, as “ties, bow ties and cravats.”
GRI 3 provides for goods that are, prima facie, classifiable in two or more headings. GRI 3(b) provides that goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character. The shirt and tie are considered a set for purposes of classification, with the essential character being imparted by the shirt based on its greater weight, bulk and role in relation to the set. GN 12 Chapter 62, rule 3 states in part:
For purposes of determining the origin of a good of this chapter, 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….
As the shirt provides the essential character to the shirt and tie sets, only the shirt must undergo the tariff shift requirements.
General Note 12(t)(30) states:
A change to subheadings 6205.20 through 6205.30 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
Insofar as the shirts are constructed from fabric of heading 5210, HTSUS,
which provides for “Woven fabrics of cotton, containing less than 85 percent by weight of cotton, mixed mainly or solely with man-made fibers, weighing not more than 200 g/m2”, the shirt does not meet the tariff shift set forth in GN 12(t)(29).
Subheading rule (c) to GN 12(t)(30) states: 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: …( c ) Fabrics of subheadings 5210.21 or 5210.31, not of square construction, containing more than 70 warp ends and filling picks per square centimeter, of average yarn number exceeding 70 metric.
No information was submitted regarding the fabric weight by which to determine the average yarn number. In the absence of such information, the men’s shirt and tie sets are not eligible for duty-free treatment under subheading 9820.11.24, HTSUS. The determination in NY L84803 that the shirt and tie sets are classified in subheading 6205.20.2016, HTSUSA (annotated), which provides for “Men’s or boys’ shirts, of cotton: other: dress: other: men’s” remains unchanged.
HOLDING:
The men’s shirt and tie sets are not eligible for preferential treatment under the CBTPA in the absence of evidence concerning the fabric weight with which to calculate the average yarn number.
EFFECT ON OTHER RULINGS:
NY L84803, dated June 2, 2005, is hereby modified.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division