CLA-2-61:RR:NC:TA:N3:356 L86589
Mr. Jason Waite
Alston & Bird LLP
601 Pennsylvania Avenue, N.W.
North Building, 10th Floor
Washington, D.C. 20004-2601
RE: The tariff classification and eligibility for partial duty exemption under subheading 9802.00.50, HTSUS, for certain men’s knit garments.
Dear Mr. Waite:
In your letter dated June 6, 2005, and in subsequent correspondence dated July 21, 2005, you requested a ruling on behalf of Gildan Activewear, Inc., concerning the eligibility for partial duty exemption under subheading 9802.00.50, HTSUS, for certain men’s knit garments. Your samples will be returned.
Style 3800 is a men’s polo shirt constructed from 100% cotton, pique knit fabric that measures 10 stitches per linear centimeter counted in the horizontal direction and 20 stitches per linear centimeter counted in the vertical direction. The garment has a rib knit spread collar; a partial front opening with three button closures; short sleeves with rib knit cuffs; and a straight, hemmed bottom.
Style 2000 is a men’s dyed T-shirt constructed from 100% cotton, finely knit jersey fabric that weighs less than 200 grams per square meter. The garment has a rib knit crew neckline; short, hemmed sleeves; and a straight, hemmed bottom.
Style 12000 is a men’s sweatshirt constructed from 50% cotton, 50% polyester, finely knit fabric that is napped on the inside surface. The garment has a rib knit crew neckline; long sleeves with rib knit cuffs; and a rib knit bottom.
The applicable subheading for Style 3800 will be 6105.10.0010, Harmonized Tariff Schedule of the United States (HTS), which provides for: men’s or boys’ shirts, knitted . . . : of cotton: men's. The general rate of duty is 19.7% ad valorem.
The applicable subheading for Style 2000 will be 6109.10.0012, Harmonized Tariff Schedule of the United States (HTS), which provides for: T-shirts, singlets, tank tops and similar garments, knitted. . . : of cotton: men’s or boys’: other T-shirts: men’s. The general rate of duty is 16.5% ad valorem.
Following note 2 (A) of Section XI, the applicable subheading for Style 12000 will be 6110.30.3040, Harmonized Tariff Schedule of the United States (HTS), which provides for: sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted . . . : of man-made fibers: other: other: other: other: sweatshirts: men’s or boys’. The general rate of duty is 32% ad valorem.
You state that Styles 3800, 2000 and 12000 will be cut and wholly assembled in Honduras or another Caribbean Trade Partnership Act (CBTPA) country from fabric knit in Honduras or another CBTPA country from yarns wholly formed in the United States. The garments will be imported into the United States from Honduras or another CBTPA country under 9820.11.09, HTSUS. They will then be exported to Canada and stored in your client’s Montreal distribution facility. You state that all the garments stored in this facility were previously imported into the United States and then exported to Canada. From the Canadian facility, the garments will be sold to unrelated distributors who will sell or transfer them to unrelated screen printers or embroiderers who will embellish the garments with a variety of generic or licensed designs. The garments will then be sold or returned to the United States and imported by either a U.S. customer or by a Canadian distributor for their U.S. customers. You have provided samples of the garments as they are imported from Honduras and as they will be re-imported, after embroidery or screen printing, into the United States. You request a determination regarding the eligibility of the garments for partial duty exemption under subheading 9802.00.50, HTSUS.
Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition by repairs or alterations, provided that the documentary requirements of Section 181.64, Customs Regulations (19 C.F.R. § 181.64), are satisfied. Section 181.64, C.R., which implements Article 307 of NAFTA, provides that goods returned after having been repaired or altered in Canada may qualify for complete or partial duty free treatment, provided that the requirements of this section are met. However, entitlement to this tariff treatment is precluded in circumstances where the operations performed abroad destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles.
In this instance, the garments are complete for their intended use as wearing apparel prior to being exported to Canada to undergo the screen printing and embroidering operations. The merchandise in its condition as exported from the United States and as returned from Canada can be marketed and sold to consumers for the same use. The operations performed in Canada do not result in the loss of the good’s identity nor create a new article with a different commercial use. Therefore, the embroidering and screen printing performed in Canada constitute an acceptable alteration within the meaning of subheading 9802.00.50, HTSUS. The garments will qualify for the special tariff treatment of that provision, provided that the documentary requirements of 19 C.F.R. § 181.64 are met.
You state that because the garments are initially exported to a person in Canada other than the person who will perform the alterations, and because the person who re-imports the screen printed or embroidered garments into the United States is not the same person who exported the garments, you propose to ensure that the documentary requirements will be met with declarations in substantially the same form as those set forth in 19 C.F.R. § 181.64 (c)(1). As noted in 19 C.F.R. § 181.64 (c)(2), the port director may require such additional information as is deemed necessary to prove actual exportation of the goods from the United States and subsequent re-importation of the same goods after alteration. The documentation must clearly follow the garments through exportation, alteration, and re-importation. For information as to the documentation that will satisfy Section 181.64, C.R., you should contact the port director at the anticipated U.S. port of entry.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of this ruling letter or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding this ruling, contact National Import Specialist Mary Ryan at 646-733-3271.
Sincerely,
Robert B. Swierupski, Director
National Commodity Specialist Division