CLA-2-62:OT:RR:NC:N3:360
Mr. Ricky Villena
Neutralogistics CHB
8400 NW 25th Street
Ste. 102
Doral, FL 33122
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of a woman’s blouse from Guatemala
Dear Mr. Villena:
In your undated letter, you requested a tariff classification ruling on behalf of your client, Sweet Pea Limited. Your sample will be returned as requested.
Style KK21964 is a woman’s blouse constructed from 100% cotton woven fabric. The blouse features a full front opening secured by seven button closures, two chest pockets, a hemmed bottom, and long sleeves with single button tabs to allow the sleeves to be rolled up.
The applicable subheading for style KK21964 will be 6206.30.3041, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Women’s or girls’ blouses, shirts and shirt-blouses: Of cotton: Other: Other: Other: Other: Women’s. The rate of duty will be 15.4 percent 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 described the manufacturing and assembly of the garment as follows:
The cotton woven fabric and the plastic buttons are made in China and will be shipped to Guatemala
The sewing thread used to assemble the garment will be produced in the United States
The fabric is cut, sewn, and assembled into the finished garment in Guatemala
The garment will be shipped directly from Guatemala to the United States
You state that the fabric is made in China and is designated by the Office of Textiles and Apparel (OTEXA) as short supply.
General Note (GN) 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. GN 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 nonoriginating 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 62, 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 for the garment is the cotton woven fabric. For goods classified in heading 6206, General Note 29/62.31 requires: A change to heading 6206 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516, 5801 through 5802 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 one or more of the parties.
The nonoriginating material used in the production of the garment is the cotton woven fabric. Since the cotton woven fabric is classified in heading 5208.51, the garment does not meet the terms of the tariff shift rule.
General Note 29 (n), Chapter 62, Chapter rule 4 states: Notwithstanding chapter rule 2 to this chapter, a good of this chapter containing sewing thread of headings 5204, 5401 and 5508 shall be considered originating only if such sewing thread is both formed from yarns and finished in the territory of one or more of the parties to the Agreement. The sewing thread used to assemble the garment will be formed and finished in one of the parties to the Agreement.
The merchandise does not qualify for preferential treatment under DR-CAFTA because (a) it will not be wholly obtained or produced entirely in the territory of one or more DR-CAFTA countries; (b) one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 29(n)/62.31, HTSUS; and (c) it will not be produced entirely in the territory of one or more of the DR-CAFTA parties exclusively from originating materials.
You have suggested that the garment may be subject to a reduced rate of duty classified under 9822.05.01.
General Note 29(m)(viii)(B) states: An apparel good of chapter 61 or 62 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the Agreement, and if the fabric of the outer shell, exclusive of collars and cuffs where applicable, is wholly of— (1) one or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or (2) one or more fabrics formed in the territory of one or more of the parties to the Agreement from one or more of the yarns listed in U.S. note 20 to such subchapter XXII; or (3) any combination of the fabrics referred to in subdivision (B)(1), the fabrics referred to in subdivision (B)(2) or one or more fabrics originating under this note. The originating fabrics referred to in subdivision (B)(3) may contain up to 10 percent by weight of fibers or yarns that do not undergo an applicable change in tariff classification set out in subdivision (n) of this note. Any elastomeric yarn contained in a fabric referred to in subdivision (B)(1), (B)(2) or (B)(3) must be formed in the territory of one or more of the parties to the Agreement. Chapter 98, subchapter XXII of the HTSUS U.S. Note 20(a) and (b) to that chapter states in pertinent part, that: Heading 9822.05.01 shall apply to textile or apparel goods of chapters 50 through 63 and subheading 9404.90 that contain any of the fabrics, yarns or fibers set forth herein, are described in general note 29 to the tariff schedule and otherwise meet the requirements of such general note 29. Within Chapter 98, U.S. Note 20(b) is the following: The United States Trade Representative may modify the enumeration of designated fabrics, yarns and fibers set forth in subdivision (a) of this note to reflect CITA determinations described in subdivision (a) of this note, in a notice published in the Federal Register. Within the Office of Textiles and Apparel’s short supply list for CAFTA-DR, Annex 3.25 is the following designated fabric:
Fabrics classified in subheading 5208.21, 5208.22, 5208.29, 5208.31, 5208.32, 5208.39, 5208.41, 5208.42, 5208.49, 5208.51, 5208.52, or 5208.59, of average yarn number exceeding 135 metric. Based on the facts provided, Style KK21964 qualifies for DR-CAFTA preferential treatment assuming compliance with HTSUS General Note 29(m)(viii)(B)(1). Style KK21964 will therefore be entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements.
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 Kimberly Rackett at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division