CLA-2-61:OT:RR:NC:N3:348
Ms. Kay Morrell
JC Penney
6501 Legacy Dr. MS 2216
Plano, TX 75024
RE: The tariff classification and status under the United States-Peru Trade Promotion Agreement Implementation Act (Peru TPAIA), and the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), of a woman’s garment from Peru or Guatemala.
Dear Ms. Morrell:
In your letter dated March 20, 2014, you requested the status of a women’s garment from Peru under the Peru TPAIA and Guatemala under the DR-CAFTA
Item PPK # 101673 is a woman’s cut-and-sewn pullover that is constructed from 100% rayon jersey knitted fabric. The outer surface of the garment’s fabric measures more than nine stitches per two centimeters in the direction in which the stitches were formed. The garment features a capped round neckline, short capped sleeves, a 100% woven polyester insert on the rear panel extending from the neckline to the garment bottom, and a hemmed garment bottom. The garment extends from the shoulders to below the waist.
The applicable subheading for item PPK # 101673 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 the World Wide Web at http://www.usitc.gov/tata/hts/.
You have requested a determination under the Peru TPAIA. The manufacturing operations are as follows:
The rayon fabric is knitted in Peru.
The polyester fabric is woven in Peru.
All of the fabrics are cut, sewn and assembled in Peru.
The man-made filament sewing thread is formed and finished in U.S. or Peru.
The garment will be imported directly into the U.S. from Peru.
General Note (GN) 32, HTSUS, sets forth the criteria for determining whether a good is originating under the Peru TPAIA. GN 32(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 Peru, the United States, or both;
(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
(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 Peru, the United States, or both, exclusively from materials described in subdivision (b)(i) or (b)(ii) of this note.
You state the good was produced entirely in the territory of one of the parties to the Agreement exclusively from originating materials. As a result GN 32(b)(iii) must be applied, and each component will have to undergo an applicable change in tariff classification in order to meet the requirements of GN 32(b)(iii).
The rayon knit fabric is classified in heading 6006. The polyester woven fabric is classified 5513. The yarns, for both fabrics, are manufactured in Peru. The rayon fibers and polyester fibers are manufactured in India or Asia. If not carded, combed or otherwise processed for spinning the rayon staple fibers are classified under heading 5504 and the polyester stable fibers are classified under heading 5503. If carded, combed or otherwise processed for spinning the rayon staple fibers are classified under heading 5507 and the polyester staple fibers are classified under heading 5506. The sewing thread is classified in heading 5401, HTSUS.
The product-specific rule for goods classified in heading 6006, General Note 32(n), Chapter 60.3 is as follows: A change to headings 6003 through 6006 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 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 or chapter 55.
Since the rayon fibers are classified in either heading 5504 or 5507, they would not meet the terms of the tariff shift, and the fabric would not qualify as an originating material under the provisions of the Peru TPAIA.
As a result, the garments are not considered goods produced exclusively from originating materials, and would not be entitled to a free rate of duty under the requirements of GN 32(b)(iii).
Since the goods have been determined to contain non-originating materials, they will have to undergo an applicable change in tariff classification in order to meet the requirements of GN 32(b)(ii)(A).
General Note 32 (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 non-originating rayon knit fabric.
For goods classified in heading 6110, General Note 32 (n), 61.20 requires:
A change to headings 6105 thru 6111 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.
The rayon fabric classified in heading 6006 does not meet the terms of the tariff shift. Therefore, the goods would not be entitled to a free rate of duty under the Peru TPAIA
You also requested a determination under the DR-CAFTA. The manufacturing operations are as follows:
The rayon fabric is knitted in one of the parties to the Agreement.
The polyester fabric is woven in one of the parties to the Agreement.
All of the fabrics are cut, sewn and assembled in Guatemala.
The man-made filament sewing thread is formed and finished in one of the parties to the Agreement.
The garment will be imported directly into the U.S. from Peru.
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.
You state the good was produced entirely in the territory of one of the parties to the Agreement exclusively from originating materials. As a result GN 29(b)(iii) must be applied, and each component will have to undergo an applicable change in tariff classification in order to meet the requirements of GN 29(b)(iii).
The rayon knit fabric is classified in heading 6006. The polyester woven fabric is classified 5513. The yarns, for both fabrics, are manufactured in Guatemala. The rayon fibers and polyester fibers are manufactured in India or Asia. If not carded, combed or otherwise processed for spinning the rayon staple fibers are classified under heading 5504 and the polyester stable fibers are classified under heading 5503. If carded, combed or otherwise processed for spinning the rayon staple fibers are classified under heading 5507 and the polyester staple fibers are classified under heading 5506. The sewing thread is classified in heading 5401, HTSUS.
The product-specific rule for goods classified in heading 6006, General Note 29(n), Chapter 60.3 is as follows: A change to headings 6003 through 6006 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 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 or chapter 55.
Since the rayon fibers are classified in either heading 5504 or 5507, they would not meet the terms of the tariff shift, and the fabric would not qualify as an originating material under the provisions of the DR-CAFTA.
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 non-originating rayon knit fabric.
For goods classified in heading 6110, General Note 29 (n), 61.25 requires:
A change to headings 6105 thru 6111 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.
The rayon fabric classified in heading 6006 does not meet the terms of the tariff shift. Therefore, the goods would not be entitled to a free rate of duty under the DR-CAFTA.
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 Renee Orsat via email at [email protected]. If you have any questions regarding the eligibility for preferential treatment under the Peru TPAIA or DR-CAFTA, contact National Import Specialist Rosemarie Hayward via email at [email protected].
Sincerely,
Gwenn Klein Kirschner
Acting Director
National Commodity Specialist Division