CLA-2-61:OT:RR:NC:TAB:354
Ms. Sara Gradilla
R.L. Jones Customhouse Brokers, Inc.
P.O. Box 488
San Luis, AZ 85349
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a woman’s knit panty brief; Article 509
Dear Ms. Gradilla:
In your letter dated October 23, 2007, written on behalf of your client, Meca Manufacturas, you requested a ruling on the status of undergarments under the NAFTA.
You have submitted two styles of women’s knit panty briefs, style #4002 and #4003 with elasticized waists and elasticized leg openings, and a separately sewn in gusset crotch lining. Style #4002 features an elasticized lace trim at the waist.
You state that non-originating yarns will be imported into the U.S. where fabric made up of 91% nylon and 9% spandex will be knit. The fabric will then be imported in rolls into Mexico, along with other findings and trimmings that you state will be of U.S. origin, where the fabric will be cut and sewn to create the finished panties. You also state that the elasticized lace trim that outlines the waist of style #4002 originates in France and will be imported into Mexico to be incorporated in the panties.
The applicable tariff provision for the submitted panty, style #4002 will be 6108.22.9020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for women’s or girls’ slips, petticoats, briefs, panties, night dresses, pajamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted: of man-made fiber: other, women’s. The general rate of duty will be 15.6% 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/.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
The fabric that is created in the U.S. is classified in heading 6004 and is made from non-originating yarns of chapter 54.
General Note 12 (t)/61.31 to the Harmonized Tariff Schedule of the United States (HTSUS), the rule covering this merchandise, states:
A change to subheadings 6108.22 through 6108.29 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
As the non-originating yarns are classified in chapter 54, the panty does not meet the change in tariff classification required by General Note 12(t)/61.31, HTSUS. Thus, the panties do not qualify for preferential treatment under this note.
In addition, the merchandise does not qualify for preferential treatment under the NAFTA because the panties will not be made exclusively from originating materials. The non-originating yarns imported into the U.S. will be made into fabric of heading 6004, HTSUS. For that fabric to be considered originating, it would have to meet the tariff change required for that heading, as stated in General Note 12(t) Chapter 60:
A change to headings 6001 through 6006 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 5307 through 5308, or 5310 through 5311, or chapters 54 through 55.
Since the non-originating yarns are classified in chapter 54, the fabric created in the U.S. does not meet the above requirement. Therefore, the end product is not considered to be made exclusively from originating materials.
In this regard, the merchandise does not qualify for preferential treatment under the NAFTA because none of the requirements in General Note 12(b) HTSUS for determining whether a good is originating under the NAFTA are met.
The undergarments may, however, be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, Additional U.S. Note 3(b), up to the annual quantities specified in subdivisions (g)(i) of Note 3. Upon completion of the required documentation and up to the specified annual quantities, undergarments may be eligible for the preferential rate of free.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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