CLA-2-60:OT:RR:NC:N3:352
Benjamin Ramirez
International Automated Brokers (IAB), Inc.
1655 St. Andrew Cove
San Diego, CA 92154
RE: The tariff classification, country of origin and status under the United States - Korea Free Trade Agreement (UKFTA) of a polyester/spandex warp knit fabric from Korea.
Dear Mr. Ramirez:
In your letter dated May 28, 2014, on behalf of your client Moshay Inc., you requested a ruling on the status of a warp knit fabric from Korea, Style 99HSTP, under the United States-Korea Free Trade Agreement (UKFTA). Samples of the fabric were provided.
FACTS:
Style 99HSTP is a heavy weight white knit fabric. According to the information provided in the original request and subsequent email and telephonic communications, as well as visual examination of the samples, this fabric is of warp knit construction, said to be composed of 87% polyester filament and 13% spandex yarns, and weighs 340 g/m2. You state that this fabric will be imported into the United States in 60-inch widths to be precut into garment parts, which will be used to sew sports apparel such as football pants or jerseys, in the US, Mexico or El Salvador.
You state that all manufacturing and subsequent dyeing and finishing operations for the fabric are performed in South Korea, as follows:
Polyester resin chips are melted, extruded into filaments and spun into yarn.
Yarn is put onto warp beams.
Fabric is knitted.
Greige fabric is jet scoured for dyeing, and then dyed white.
Fabric is dried, heat set, inspected and packed.
Fabric is exported directly to the U.S.
ISSUES:
What are the classification, status under the UKFTA, and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the warp knit fabric Style 99HSTP will be 6004.10.0025, Harmonized Tariff Schedule of the United States (HTSUS), which provides for knitted or crocheted fabrics of a width exceeding 30 cm, containing by weight 5 percent or more of elastomeric yarn or rubber thread, other than those of heading 6001: containing by weight 5 percent or more of elastomeric yarn but not containing rubber thread, warp knit, other. The rate of duty will be 12.3% 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/.
UKFTA ELIGIBILITY – LAW AND ANALYSIS:
General Note 33, HTSUS, sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, (19 U.S.C. § 1202) states that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and
(o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if-
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of 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 (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Korea or the United States,
or both, exclusively from materials described in subdivisions (i) or (ii), above.
For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States.
For goods classified in heading 6004, General Note 33(o)/60.1 requires:
A change to headings 6001 through 6006 from any other chapter, except from headings 5106 through 5113, chapter 52, headings 5307 through 5308, 5310 through 5311 or 5401 through 5402, subheadings 5403.33 through 5403.39 or 5403.42 through heading 5408, headings 5501 through subheading 5503.20, subheadings 5503.40 through 5503.90 or headings 5505 through 5516.
The yarn used to produce the fabric is manufactured in South Korea, and the fabric is knitted in South Korea. The origin of the polyester resin chips is unknown; however, melting the chips to produce the filament yarns would meet the required tariff shift for the fabric.
Based on the facts provided, the goods described above are eligible for UKFTA preferential treatment, because they meet the requirements of HTSUS General Note 33(b)(ii). The goods will therefore be entitled to a Free rate of duty under the UKFTA upon compliance with all applicable laws, regulations, and agreements.
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.
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:
6001-6006: (2) …a change to heading 6001 through 6006 from any heading outside that group, provided that the change is the result of a fabric-making process.
As the fabric is knitted in Korea, country of origin is conferred in Korea.
HOLDING:
The applicable subheading for fabric Style 99HSTP will be 6004.10.0025, HTSUS, which provides. The general rate of duty will be 12.3 percent ad valorem.
Based on the facts provided, we find this fabric is eligible for duty free treatment as provided for in the United States-Korea Free Trade Agreement because it meets the requirements of HTSUS General Note 33(b)(ii). The goods will qualify for a Free rate of duty under the UKFTA upon compliance with all applicable laws, regulations, and agreements.
Pursuant to 19 CFR §102.21, the country of origin for marking purposes is Korea.
This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. In the event that the facts or merchandise are modified in any way, you should bring this to the attention of Customs and you should resubmit for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by Customs.
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 ruling, contact National Import Specialist Maribeth Dunajski at Maribeth.Dunajski @cbp.dhs.gov.
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division