CLA-2-61:OT:RR:NC:N3:358
Mr. Seung Hyun Yang
Hansae International S.A.
Catarina-Niquinohomo Industrial Park
Niquinohomo KM53 Road
Masaya, Nicaragua
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of a girl’s sleeveless top from Nicaragua
Dear Mr. Yang:
In your letter received February 14, 2018, you requested a ruling on the status of a girl’s garment from Nicaragua under the DR-CAFTA. A sample of the garment was previously provided.
FACTS:
Style 413568, referred to as “Relaxed 2 in 1 Gym Tank,” is a girls’ sleeveless top within which an inner shelf bra has been securely sewn. The garment features a hemmed bottom, a round neckline with trim, and oversized armholes. The front of the garment is printed with the word “BALANCE” five times in succession forming a column. In your letter, you indicate that the top is constructed from 75 percent polyester, 13 percent cotton, and 12 percent rayon knit fabric. The trim around the neckline of the garment is constructed from a 5/8” wide knit fabric composed of 80 percent polyester and 20 percent spandex. The shelf bra portion of the garment is constructed of 94 percent polyester and 6 percent spandex knit fabric. The shelf bra features a knit lining composed of 100 percent polyester, a 1” covered knit bottom band composed of 73 percent polyester and 27 percent spandex, a scooped front neckline, and straps that crisscross in the back.
Your submission and subsequent email correspondence describes the relevant manufacturing processes for style 413568 as follows:
Guatemala
Forming of yarns and knitting of fabric comprising the body of the garment and shelf bra.
Forming of 1” wide elastic knit fabric of heading 6002 for the covered bottom band of the shelf bra.
Taiwan
Forming of yarns and knitting of lining fabric for the shelf bra.
Forming of yarns that comprise the 1” wide elastic knit fabric of the covered bottom band of the shelf bra.
China
Narrow knit trim fabric of heading 6002 formed.
Nicaragua
All fabric is cut and sewn.
The sewing thread is formed and finished.
Completed garments are exported on a through-bill of lading to the United States from a Honduran port of lading.
ISSUE:
What is the classification and status of this garment under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA)?
CLASSIFICATION:
The applicable subheading for style 413568 will be 6114.30.1020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Other garments, knitted or crocheted: Of man-made fibers: Tops: Women’s or girls’. The rate of duty will be 28.2 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 https://hts.usitc.gov/current.
DR-CAFTA – LAW AND ANALYSIS:
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:
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—
each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
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 non-originating materials, it would have to undergo an applicable change in tariff classification in order to meet the requirements of General Note 29(b)(ii)(A).
However, General Note 29(n), Chapter 61, 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 man-made knit fabric of the top. The knit fabric is manufactured in Guatemala from yarns formed in Guatemala, and since the fabric is stated to be an originating material it does not have to meet the terms of the tariff shift rule. For goods classified in heading 6114, General note 29(n), Chapter 61 rule 3 also applies and states:
Notwithstanding chapter rule 2 to this chapter, a good of this chapter, other than a good of subheading 6102.20, tariff item 6102.90.90 (for goods subject to cotton restraints), 6104.12.00 (for jackets imported as parts of suits), 6104.13.20, 6104.19.15,6104.19.80 (for jackets imported as parts of suits and subject to cotton restraints), 6104.19.80 (for goods subject to man-made fiber restraints), 6104.22.00 (for garments described in heading 6102 or jackets and blazers described in heading 6104), 6104.29.20 (for garments described in heading 6102 or jackets and blazers described in heading 6104, the foregoing subject to cotton restraints), subheading 6104.32, tariff item 6104.39.20 (for goods subject to cotton restraints), 6112.11.00 (for women’s or girls’ garments described in headings 6101 or 6102), 6113.00.90 (for coats and jackets of cotton, for women or girls) or 6117.90.90 (for coats and jackets of cotton), containing fabrics of subheading 5806.20 or heading 6002 shall be considered originating only if such fabrics are both formed from yarn and finished in the territory of one or more of the parties to the Agreement.
The narrow knit fabric comprising the collar trim of the garment is both formed and finished in China and is classifiable in heading 6002, HTSUS. The narrow knit fabric comprising the bra’s bottom band though formed in Guatemala is formed from Taiwanese yarns and is also classifiable in heading 6002, HTSUS.
HOLDING:
Based on the facts provided, style 413568 does not qualify for DR-CAFTA preferential treatment, because it does not meet the requirements of General Note 29, HTSUS. The trim fabric and yarns for the shelf bra’s bottom band are formed and finished outside of the territory of any party to the Agreement.
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 Michael Capanna at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division