CLA-2 OT:RR:CTF:VS H303472 EGJ
Port Director
U.S. Customs and Border Protection
909 S.E. 1st Avenue
Suite 980
Miami, FL 33131
Attn: Jose R. Ramos, Supervisory Import Specialist
RE: Application for Further Review of Protest No. 5203-18-100005; Eligibility of Women’s Trousers under DR-CAFTA Short Supply Provision
Dear Port Director:
This is in reference to the Application for Further Review (“AFR”) of Protest No. 5203-18-100005, timely filed on January 23, 2018, by counsel on behalf of D.F.A. New York LLC (“Protestant”) concerning the eligibility for preferential tariff treatment under the Dominican Republic – Central America – United States Free Trade Agreement (“DR-CAFTA”) for one style of women’s trousers.
FACTS:
This AFR concerns the eligibility for preferential tariff treatment under DR-CAFTA for one style of women’s grey woven trousers (Style # 3724). The garment’s fabric is a blend of polyester, rayon and spandex. The fabric was manufactured in China and then shipped to El Salvador for cutting and sewing into finished trousers.
On May 18, 2017, the Protestant entered the women’s trousers under subheading 9822.05.01, Harmonized Tariff Schedule of the United States (“HTSUS”), as garments made up of fabric designated as not available in commercial quantities (also known as, “short supply”) provided for in U.S. Note 20(a)(76), Subchapter XXII, Chapter 98, and as otherwise meeting the terms of U.S. Note 20(a). In order to qualify for the relevant short supply provision, the trousers needed to consist of at least 3% spandex by weight. On July 7, 2017, the Port issued a CF-28 Request for Information to the Protestant on three styles of its women’s trousers, including the instant Style # 3724. In response, the Protestant submitted three samples for examination by the U.S. Customs and Border Protection (“CBP”) Laboratory.
The CBP Lab found that two of the three styles had fabric which met the criteria set forth in the relevant DR-CAFTA short supply provisions. For Style # 3724, however, the CBP lab took an average of two tests and found that the fabric consisted of 64.4% polyester, 33.3% rayon and only 2.3% spandex. See CBP Laboratory No. SV20171651S, dated October 16, 2017. As such, Style # 3724 did not meet the terms of U.S. Note 20(a)(76), Subchapter XXII, Chapter 98, HTSUS, which required that the short supply fabric contain at least 3% spandex by weight. The methods used to analyze the sample were CBPL 62-03, CBPL 62-04, CBPL 62-05, CBPL 62-13, CBPL 62-14 and CBPL 62-19.
As a result, the Port determined that Style # 3724 was not eligible for preferential tariff treatment under DR-CAFTA. On December 15, 2017, the Port liquidated the entry under subheading 6204.63.90, HTSUS, which provides for women’s trousers of synthetic fibers, at a duty rate of 28.6% ad valorem. On January 23, 2018, the Protestant filed the instant Protest and AFR.
The Protestant claimed that Style # 3724 contained at least 3% spandex. In support, the Protestant has provided two different test results from SGS, an independent lab. One test was performed on the fabric, and the other test was performed on the finished women’s trousers. The SGS lab test on the fabric found that it contained 64.0% polyester, 32.7% rayon and 3.3% spandex, whereas the lab test on the trousers found that they contained 62.5% polyester, 34.4% rayon, and 3.1% spandex. The SGS test methods were AATCC 20-2013 and AATCC 20A-2014. The Protestant also provided an affidavit from the fabric manufacturer, which stated that the fabric contained 63% polyester, 33% rayon, and 4% spandex by weight. Finally, the Protestant provided the documents received under a Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, request submitted to CBP for all documents related to its entry of Style # 3724.
ISSUE:
Whether the subject women’s trousers contain at least 3% spandex by weight and are eligible for preferential tariff treatment under DR-CAFTA, subheading 9822.05.01, HTSUS.
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)).
Further Review of Protest No. 5203-18-100005 is properly accorded to the Protestant pursuant to 19 CFR § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by CBP. Namely, the Protestant alleges that CBP Laboratory Report No. SV20171651S is flawed.
The DR-CAFTA 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.).
General Note (GN) 29, HTSUS implements the DR-CAFTA. GN 29(b), subject to the provisions of subdivisions (c), (d), (m) and (n) of GN 29, sets forth the 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.
Subdivision (m), GN 29, provides at paragraph (viii)(B):
An apparel good of chapter 61 or 62 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it 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, and if the fabric of the outer shell, exclusive of collars and cuffs where applicable, is wholly of—
(1) one or more fabrics listed in U.S. Note 20 to subchapter XXII of chapter 98;
. . . .
U.S. Note 20(a), Subchapter XXII, Chapter 98, provides, in relevant part:
Heading 9822.05.01 shall apply to textile or apparel goods of chapters 50 through 63 and subheading 9404.90 that contain any of the fabrics, yarns or fibers set forth herein, are described in general note 29 to the tariff schedule and otherwise meet the requirements of such general note 29:
* * *
(76) Certain Woven Two-Way Stretch Fabrics
HTS Subheading: 5515.11.00
Fiber Content:
60% - 75% polyester
20% - 35% viscose rayon
3% - 6% spandex
Staple Length:
44 to 70 mm (1.75 to 2.75 inches)
Yarn Size:
40/2 to 84/2 metric wrapped
Warp and filling:
Around 225 to 118 metric spandex (24/2 to 40/2 English wrapped around 40 to 70 denier spandex)
Thread Count (metric):
24 to 44 x 16 to 32 filling picks per square centimeter
Weave Type: Various
Weight: 200 - 300 grams per sq. meter (5.9 to 8.9 ounces per square yard)
Width: 127 to 152 centimeters (50 to 60 inches)
Finish: (Piece) dyed and of yarns of different colors
NOTE: As of October 13, 2012, elastomeric content in any product deemed in short supply may be sourced from any country.
* * *
The Protestant sets forth four reasons in support of its argument that the CBP Laboratory results are flawed. First, the Protestant alleges that the CBP Laboratory results for each constituent fabric do not add up to a total of 100%. Second, the Protestant notes that the CBP Laboratory Results closely mirror the SGS results with regard to the polyester and rayon content. Therefore, the Protestant contends that the spandex content should similarly mirror the SGS results. Third, the Protestant was unable to obtain the Port’s instructions to the CBP Laboratory pursuant to its FOIA request. And finally, the Protestant cites to its two independent laboratory reports and manufacturer’s affidavit as further support that the CBP Laboratory results are flawed.
Addressing the first argument set forth by Protestant’s counsel, Grunfeld, Desiderio, Lebowitz, Silverman & Kledstadt, LLP, we note that the three constituent fabric percentages in the CBP Laboratory Report do add up to 100%. We have added 64.4% polyester to 33.3% rayon to arrive at a total of 97.7%. Then, we have added 2.3% spandex to this number to reach 100%. Therefore, we disagree with the Protestant’s assertion that the fabric content does not add up to 100%.
Second, we agree that the CBP Laboratory Report closely approximates the two SGS laboratory reports for both the polyester and the rayon content of the fabric. However, we do not agree this consistency points to a flaw in the CBP Laboratory Report on the spandex content. Indeed, the manufacturer’s affidavit states that the fabric contains 4% by weight of spandex, whereas the SGS laboratory reports determined the fabric contained 3.3% spandex and the trousers contained 3.1% spandex. The CBP Laboratory Report found that the trousers contained 2.3% spandex, which is a similar difference between the manufacturer’s affidavit and the SGS lab results of approximately 0.7% - 1%. Therefore, we find that each content determination varies on the spandex content, but does not lead to the conclusion that these results are flawed. Rather, we take the view that the utilization of different test methods and controls may lead to the slight variations in results. Indeed, even the two SGS Laboratory Reports differed on the polyester content of the fabric (64.0%) versus the trousers (62.5%). This differential is 1.5%, which is greater than the difference between the SGS Laboratory and the CBP Laboratory (1%) results on the spandex content.
We have discussed the difference in test results with the CBP Laboratory. The chemists from the CBP Laboratory told us that the AATCC 20A test standard used by the SGS lab allows the use of two different chemicals to remove spandex from a fabric – DMAC (N,N-Dimethylacetamide) or DMF (Dimethylformamide). The SGS report does not state which chemical they used. DMF is much stronger than DMAC and typically strips out a lot of dye. The CBP Laboratory used DMAC, the only choice in the ASTM D629 method, which usually does as good a job as the DMF except if the spandex is heavily cross linked. The CBP Laboratory used the DMAC on the other two samples of the Protestant’s pants and those percentages were all similar to the Protestant’s claimed percentages as well. We are of the opinion that the similarity between the CBP Laboratory and SGS Laboratory’s results supports the conclusion that the CBP Laboratory results are accurate.
Third, we have asked the CBP Laboratory Report to supply our office with the Port’s instructions to them regarding testing the fabric content of Style # 3724. The Port’s instructions stated as follows:
Please provide lab analysis for style 3724 to determine if fabric meets each requirement as reflected in the attached CITA Short Supply description, as on U.S. Note 20(a)(147). Please return sample.
We note that the aforementioned instructions cite to the wrong short supply provision. This is likely the result of a copy and paste error from prior Port instructions to the CBP Laboratory on different merchandise. However, we note that U.S. Note 20(a)(147) pertains to “Certain Warp Stretch Woven Nylon/Rayon/Spandex Fabric.” Yet the CBP Laboratory provided its results on polyester/rayon/spandex fabric. In spite of the copy and paste error, the CBP Laboratory returned results pertaining to the constituent fabric of the instant Style # 3724. Therefore, we do not find that the Port’s instructions to the CBP Laboratory resulted in flawed test results.
Finally, in order to resolve the conflicting findings between the CBP laboratory reports and the independent laboratory reports that Protestant submitted, we find that HQ 955711, dated July 21, 1994, is instructive. In HQ 955711, CBP stated the following:
Where there is a conflict between the results obtained by a Customs laboratory and those obtained by private or independent laboratories, Customs will, in the absence of evidence that the testing procedure or methodology utilized by the Customs laboratory was flawed, accept the Customs laboratory report. Obviously, Customs has no assurance that the samples tested by the outside laboratories are the same samples tested by the Customs laboratory, or that the methodology and techniques utilized by the outside laboratories are in compliance with the required methodology and techniques.
The burden of proof is on the importer that the Customs laboratory report is invalid (HQ 950794, dated March 25, 1992).
This presumption of correctness for CBP laboratory results is also reflected in Exxon Corp v. U.S., 462 F.Supp. 381, 81 Cust. Ct. 87, C.D. 4772 (1978) (quoting Consolidated Cork Corp. v. United States, 54 Cust. Ct. 83, C.D. 2512 (1965)) (citations omitted), which stated the following:
It is well settled that the methods of weighing, measuring, and testing merchandise used by customs officers and the results obtained are presumed to be correct. However, this presumption may be rebutted by showing that such methods or results are erroneous. Furthermore, the presumption does not have evidentiary value and may not be weighed against relevant and material proof offered by the plaintiffs. If a prima facie case is made out, the presumption is destroyed and the Government has the burden of going forward with the evidence.
We note that the Protestant in this case has not met its burden of rebutting the CBP laboratory’s presumption of correctness. While the Protestant’s private lab reports claim to have used test methods AATCC 20-2013 and AATCC 20A-2014, there is no indication that Petitioner’s private laboratory reports were conducted in accordance with the same quality controls, methods and safeguards as employed by the CBP Laboratory.
Therefore, we conclude, consistent with the findings of the CBP laboratory, that the subject merchandise contains less than 3% by weight spandex. Therefore, the women’s trousers do not satisfy the relevant short supply provision, and do not qualify for preferential tariff treatment under DR-CAFTA.
HOLDING:
The protest should be denied. The women’s grey woven trousers (Style # 3724) do not qualify for classification in subheading 9822.05.01, HTSUS, and are not eligible for preferential tariff treatment under the DR-CAFTA.
You are instructed to DENY the protest.
In accordance with sections IV and VI of the CBP Protest/Petition Processing Handbook, you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any re-liquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the
public on the CBP Home Page on the World Wide Web at http://www.cbp.gov by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division