CLA 2-RR:NC:TAB:354
Mr. Jorge Zeledon
O’BBI
O’Bryan Brothers Inc.
4256 West Belmont Avenue
Chicago, Il 60641-4693
RE: Classification and country of origin determination for women’s undergarments; General Note 3(a)(v); 19 CFR 102.21(c)(3)
Dear Mr. Zeledon:
This is in reply to your letter dated June 25, 2007, requesting a classification and country of origin determination for women’s undergarments which will be imported into the United States.
FACTS:
The subject merchandise consists of four styles of women’s underpants and panties made of 88% nylon and 12% spandex knit fabric. Style #OB-614 is a thong styled panty, style #OB-626 is a hi-cut panty, style #OB-627 is a bikini panty, and style #OB-813 is a boy short or tap panty.
You state that yarns are sourced in Europe and shipped to Turkey where tubular knit components are constructed for the undergarments, with self-start bottoms, lines of demarcation for the leg openings, and hemmed waists. For only the boy shorts or tap panties, a separate tubular knit component is also made for the gusset crotch portion. All tubes are then shipped to the Al-Tajamouat Qualified Industrial Zone (QIZ) in Jordan, where the fabric outside the demarcation lines is cut away and sewing and assembly (such as sewing in the elasticized leg openings) takes place to create the finished undergarments. For the boy shorts/tap panties, the separate gusset crotch portion is also sewn into the undergarment.
ISSUE:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for styles #OB-614, #0B-626, #OB-627 will be 6108.22.9020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for women’s or girls’ slips, briefs, panties, nightdresses, pajamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted: briefs and panties: of man-made fibers: other, women’s. The general rate of duty will be 15.6% ad valorem.
The applicable subheading for style #OB-813 will be 6108.92.0005, HTSUS, which provides for women’s or girls’ slips, petticoats, briefs, panties, nightdresses, pajamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted: other: of man-made fibers…underwear: underpants. The general rate of duty will be 16% 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/.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
You state that the processing operations in Jordan are performed in the Al-Tajamouat Qualifying Industrial Zone (QIZ). General Note 3(a)(v)(G), HTSUS, defines a “qualifying industrial zone” as any area that:”(1) encompasses portions of the territory of Israel and Jordan or Israel and Egypt; (2) has been designated by local authorities as an enclave where merchandise may enter without payment of duty or excise taxes; and (3) has been designated by the U.S. Trade representative in a notice published in the Federal Register as a qualifying industrial zone.
Under General Note 3(a)(v), HTS, articles that are products of the West Bank, Gaza Strip or a QIZ and imported directly to the U.S. from one of those areas or Israel qualify for duty-free treatment when they satisfy certain criteria. An article is considered to be a “product of” the West Bank, Gaza Strip or a QIZ if it is either wholly the growth, product or manufacture of one of those areas or a new or different article of commerce that has been grown, produced or manufactured in one of those areas. One of the criteria prescribes that the sum of the cost or value of materials produced in the QIZ and the direct costs of processing operations performed in the West Bank, Gaza Strip, a QIZ or Israel, is not less than 35% of the appraised value of such articles when imported into the U.S.
Treasury Decision 98-62 dated July 13, 1998, determined that pursuant to the agreement between the Governments of Israel and Jordan and by mutual consent of the U.S. and Israel, Customs will exclusively apply the textile and apparel rules of origin set forth in 19 C.F.R. §102.21 in determining the country of origin of a textile or apparel product processed in the Irbid QIZ.
Paragraph (c)(1) states, “The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.” As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:” Paragraph (e) in pertinent part states,
The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:
HTSUS Tariff shift and/or other requirements
6101-6117 (3) If the good is knit to shape, except for goods of 6117.10 provided for in paragraph (e)(2) of this section, a change to 6101 through 6117 from any heading outside that group, provided that the knit to shape components are knit in a single country, territory, or insular possession.
Section 102.21 (b) states that:
(3) KNIT TO SHAPE: The term “knit to shape” applies to any good of which 50 percent or more of the exterior surface area is formed by major parts that have been knitted or crocheted directly to the shape used in the good, with no consideration being given to patch pockets, appliqués, or the like. Minor cutting, trimming, or sewing of those major parts will not affect the determination of whether a good is “knit to shape”.
(4) MAJOR PARTS: The term “major parts” means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar parts.
In the case of the subject undergarments, the portions that will make up the body of the undergarments contain lines of demarcation. Consequently, the subject undergarments are considered “knit to shape” as the term is defined above.
The tubes that are knit in Turkey with lines of demarcation are classified as unfinished undergarments in heading 6108. The undergarments, completed in the QIZ, remain classified in heading 6108. Thus, no classification change occurs in the QIZ, and the tariff shift is not applicable.
Section 102.21(c)(3) states,
Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit;
As the subject merchandise is considered knit to shape, Section 102.21(c)(3) applies and the country of origin for the undergarments is Turkey, the single country where the undergarments are knit to shape.
As the articles are not considered “products of” the QIZ, they are not eligible for treatment as products of a Qualifying Industrial Zone (QIZ).
HOLDING:
The country of origin of the undergarments is Turkey.
The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.
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 ruling, contact National Import Specialist Deborah Marinucci at 646-733-3054.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division