CLA-2-61:OT:RR:NC:N3:359
Ms. Rachael A. Slisz
Patagonia Inc.
259 West Santa Clara Street
Ventura, CA 93001
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), of a woman’s pullover from Nicaragua.
Dear Ms. Slisz:
In your letter dated May 2, 2013 you requested a ruling on the status of a woman’s pullover from Nicaragua under the DR-CAFTA.
Style 25455, is a woman’s “Patagonia Synchilla” pullover that is constructed from 100% polyester knitted fabric that has been brushed on the inner and outer surfaces. The outer surface of the garments fabric measures more than nine stitches per two centimeters in the direction in which the stitches were formed. The garment features a partial front opening with four snap closures and a woven placket, a stand-up collar with woven capping, a breast pocket with a woven flap and a snap closure, the “Patagonia” logo sewn on the upper front panel, long sleeves with woven elasticized capping, and a straight garment bottom with elasticized capping. The garment extends to below the waist.
The applicable subheading for style 25455 will be 6110.30.3059, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted (con.): Of man-made fibers: Other: Other: Other: Women’s or girls’: Other. The duty rate will be 32% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
The manufacturing processes are as follows:
The fabric, for the body of the garment, is made of U.S. yarns and knitted in the U.S.
The placket, pocket, top collar binding and right placket binding material are woven in the U.S.
The interfacings for the placket and pocket flap are woven in Taiwan.
The pocket bag is formed and finished in the U.S.
The narrow fabric on the cuffs and bottom hem is woven in the U.S and constructed of 73% nylon and 27% spandex. The spandex yarn is wholly formed in the U.S. The majority of the nylon yarns are formed in Indonesia. The balance is formed in the U.S.
The sewing thread is formed and finished in Honduras.
The fabric is cut, sewn and assembled in Nicaragua.
The pullovers will be directly imported from Nicaragua to the U.S.
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
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—
(i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;
(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement 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
(B) 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
(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.
As the good contains non-originating materials, it would have to undergo an applicable change in tariff classification in order to meet the requirements of GN 29(b)(ii)(A).
General Note 29 (n), Chapter 61, Chapter rule 2 states: 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 that rule for that good. The component that determines the classification is the polyester fabric. Since it is determined to be originating, it does not need to meet the terms of the tariff shift.
Additionally, the pullovers must meet the requirements of GN 29(n), HTSUS, Chapter rules 3, 4, and 5 pertaining to narrow elastic fabric, sewing thread and pocket bag fabric. Chapter rule 3 requires that certain narrow elastic fabric must be formed from yarn and finished in the territory of the DR-CAFTA parties. Chapter rule 4 requires certain sewing thread to be formed and finished in the territory of the DR-CAFTA parties. Chapter rule 5 requires pocket bag fabric to be formed and finished in the territory of the DR-CAFTA parties from yarn wholly formed in the territory of the DR-CAFTA parties.
Chapter rule 3. Notwithstanding chapter rule 2 to this chapter, a good of this chapter, other than a good of subheading 6102.20, tariff item 6102.90.90 (for goods subject to cotton restraints), 6104.12.00 (for jackets imported as parts of suits), 6104.13.20, 6104.19.15,6104.19.80 (for jackets imported as parts of suits and subject to cotton restraints), 6104.19.80 (for goods subject to man-made fiber restraints), 6104.22.00 (for garments described in heading 6102 or jackets and blazers described in heading 6104), 6104.29.20 (for garments described in heading 6102 or jackets and blazers described in heading 6104, the foregoing subject to cotton restraints),subheading 6104.32, tariff item 6104.39.20 (for goods subject to cotton restraints), 6112.11.00 (for women’s or girls’ garments described in headings 6101 or 6102), 6113.00.90 (for coats and jackets of cotton, for women or girls) or 6117.90.90 (for coats and jackets of cotton), containing fabrics of subheading 5806.20 or heading 6002 shall be considered originating only if such fabrics are both formed from yarn and finished in the territory of one or more of the parties to the Agreement.
The narrow elastic fabric is classifiable in subheading 5806.20. Some of the nylon yarns are produced in Indonesia. Therefore, it does not meet the requirements of Chapter note 3. The pullovers do not qualify for preferential treatment under DR-CAFTA.
We note that if the pullovers are 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 women’s pullovers of man-made fiber, classifiable in subheading 6110.30.30, HTSUS, at paragraph (10). 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" sub column 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.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling 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 the classification, contact National Import Specialist 359 at (646) 733-3049. If you have any questions regarding the eligibility under DR-CAFTA, contact National Import Specialist Rosemarie Hayward at (646) 733-3064.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division