OT:RR:CTF:VS H255492 CMR
Mr. Ricky Villena
Neutralogistics CHB
8578 NW 23rd Street
Miami, FL 33122
RE: Reconsideration of New York Ruling Letter (NY) N242940, dated
July 10, 2013; eligibility of garments for preferential treatment under the PETPA
Dear Mr. Villena:
It has come to our attention that an error was made in New York Ruling Letter (NY) N242940, dated July 10, 2013, issued to you on behalf of your client, Peace Love World, regarding the eligibility of three garments for preferential tariff treatment under the United States – Peru Trade Promotion Agreement (PETPA). The classifications provided in the ruling letter are correct. However, we are modifying NY N242940 as to the determination of eligibility under the PETPA.
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 December 17, 2014, in the Customs Bulletin, Volume 48, No. 50. CBP received no comments in response to this notice.
FACTS:
The garments are described in the ruling as follows:
The submitted sample, Style LS2013, Peace, is a woman’s top constructed of 52.2% cotton and 47.8% modal rayon knit fabric. The sleeveless garment features a deep and revealing V-shaped front; short hemmed sleeves; screen print designs on the front, back and right sleeve; embroidered designs on the
lower left side of the front panel, lower right side of the back panel and both sleeves; an applique on the upper back panel; and a hemmed bottom.
The submitted sample, Style LS2113, Happy, is a woman’s cut and sewn pullover that is constructed from 52.2% cotton and 47.8% modal rayon jersey knit fabric. The outer surface of the garment measures more than nine stitches per two centimeters in the direction that the stitches were formed. The garment features a rib knit crew neck; short hemmed sleeves; a screen print design on the front panel with contrast color embroidery thread; a screen print of the words “i am happiness” on the lower front panel; a screen print of the words “Love 2 Love” with contrast color embroidery thread on one sleeve component; a heart design embroidered on one sleeve component; a contrast color embroidered design on the lower front panel; an applique on the upper rear panel; and a straight hemmed flared garment bottom. The garment extends to below the waist.
The submitted sample, Style LS1012, Happy, is a woman’s tank top constructed of 52.2% cotton and 47.8% modal rayon knit fabric. The sleeveless garment features a U-shaped front; a racer style back neckline; 2 inch wide shoulder straps; shoulder straps and armholes finished with textile trim; screen printing on front and rear panels; embroidered designs on the front and rear panels; an applique on the upper rear panel; and a hemmed bottom.
In NY N242940, Style LS2013 was classified as a women’s top under the provision for women’s knitted or crocheted other garments of cotton, i.e., subheading 6114.20.0010, Harmonized Tariff Schedule of the United States (HTSUS). Style LS2113 was classified as a women’s cotton knitted pullover in subheading 6110.20.2079, HTSUS; and, Style LS1012 was classified as a women’s cotton knitted tank top in subheading 6109.10.0060, HTSUS.
The ruling describes the manufacturing process for the garments as:
The fabric is knitted in Peru from yarn spun in Peru. The fabric is cut, sewn and assembled in Peru.
The sewing thread is made in Peru from Peruvian fibers and yarns.
The appliques are produced in Peru from U.S. fibers and yarns. The embroidery is done in Peru using U.S. fibers and yarns.
The screen printing is done in Peru using U.S. ink.
The goods are imported directly into the U.S. from Peru.
In your response of May 21, 2103 to our New York office’s request for information, you indicate that the rayon fiber used in the production of the garments is staple rayon fiber from Australia.
ISSUE:
Whether the subject garments, manufactured as described above, qualify for preferential tariff treatment under the PETPA.
LAW AND ANALYSIS:
The U.S.-Peru Trade Promotion Agreement Implementation Act, Public Law 110-138, 121 Stat. 1455 (19 U.S.C. 3805 note) is implemented in the Harmonized Tariff Schedule of the United States at General Note (GN) 32.
GN 32(b) provides in relevant part:
(b) 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 –
* * *
(ii) the good was produced entirely in the territory of Peru, the United States, or both, and –
(A) 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
* * *
and the good satisfies all other applicable requirements of this note. . . .
As the garments at issue contain non-originating material, it is appropriate to look to GN 32(b)(ii)(A). As the garments are classified in headings 6109, 6110 and 6114, HTSUS, the applicable tariff shift rules in GN 32 are:
GN 32(n) –
20. A change to headings 6105 through 6111 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5307 through 5308, 5310 through 5311, 5401 through 5402, subheading 5403.20, 5403.33 through 5403.39, 5403.42 through 5403.49, headings 5404 through 5408, 5508 through 5516 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 Peru, the United States, or both.
* * *
24. A change to headings 6113 through 6117 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308, 5310 through 5311, 5401 through 5402, subheading 5403.20, 5403.33 through 5403.39, 5403.42 through 5403.49, headings 5404 through 5408, 5508 through 5516 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 Peru, the United States, or both.
Additionally, Chapter Rule 4, Chapter 61, GN 32(n), requires sewing thread of heading 5201 or 5401 contained in a good of the chapter to be both formed and finished in the territory of Peru, the United States, or both, for a good of the chapter to be considered an originating good.
The rayon staple fibers are classifiable as either staple fibers of heading 5504, HTSUS, if not carded, combed or otherwise processed for spinning, or of heading 5507, HTSUS, if carded, combed or otherwise processed for spinning.
A review of the tariff shift rules cited above reveals that a change to headings 6109, 6110 or 6114 from the non-originating rayon fibers, whether classifiable in headings 5504 or 5507, is allowed. Therefore, the garments meet the applicable tariff shift rules set forth in GN 32(n). In addition, as the sewing thread was formed and finished in Peru, Chapter Note 4, Chapter 61 is met.
HOLDING:
The garments at issue, Styles LS2013, LS2113 and LS1012 qualify for preferential tariff treatment under the PETPA. NY N242940, dated July 10, 2013, is hereby modified in accordance with the analysis set forth above. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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 and Trade Facilitation Division