CLA-2 RR:CR:SM 562451 KSG
Stacy L. Weinberg, Esq.
Grunfeld, Desiderio. Lebowitz, Silverman & Klestadt LLP
245 Park Avenue
33rd Floor
New York, NY 10167-3397
RE: African Growth and Opportunity Act; subheading 9819.11.12; foreign-origin elastic fabric
Dear Ms. Weinberg:
This is in response to your letter of May 17, 2002, requesting a binding ruling on the eligibility of certain women's trousers for duty-free treatment under the African Growth and Opportunity Act (“AGOA”). The waistband for the trousers is made from foreign-origin elastic fabric. At our request, you submitted a sample of the elastic fabric for our review.
FACTS:
This case involves women's trousers. The fabric for the body of the trousers is from an AGOA beneficiary country. The waistband is made from elastic fabric from the Far East that is imported in rolls. We assume for the purposes of this ruling that the elastic fabric is classified in subheading 5806.20, HTSUS.
The trousers are cut, sewn and wholly assembled in Madagascar.
ISSUE:
Whether the women's trousers, manufactured as described above, are eligible for duty free treatment under the AGOA.
LAW AND ANALYSIS:
Title I of the Trade and Development Act of 2000, Pub. L 106-200, 114 Stat. 251, May 18, 2000, referred to as the African Growth and Opportunity Act (“AGOA”), seeks to promote trade opportunities between the U.S. and the countries of sub-Saharan Africa. The AGOA provides for the extension of duty-free treatment under the GSP to non-textile articles normally excluded from GSP duty-free treatment that are not import sensitive; and the entry of specific textile and apparel articles free of duty. In order to implement the AGOA, Customs issued Interim Regulations in T.D. 00-67, 65 Fed. Reg. 59668, which became effective October 1, 2000. With regard to the textile and apparel provisions, the law became effective on October 1, 2000, and shall remain in effect through September 30, 2008. See Sec. 112(f), AGOA.
The enhanced trade benefits provided by the AGOA are available to eligible textile and apparel articles imported directly from a country (1) that is designated as a beneficiary sub-Saharan African country and (2) which the U.S. Trade Representative (“USTR”) has determined by a proclamation published in the Federal Register has satisfied the requirements of the AGOA and therefore should be afforded the tariff treatment authorized in such Act. Such countries shall be enumerated in U.S. Note 1, Subchapter XIX, Chapter 98, HTSUS, whenever the USTR issues a Federal Register notice as described herein. See Presidential Proclamation 7350, Annex, dated October 2, 2000, 65 Fed. Reg. 59321.
Madagascar was designated as a beneficiary sub-Saharan African country under AGOA pursuant to U.S. Note 1, Subchapter XIX, HTSUS. Madagascar was also designated as a lesser developed beneficiary country as provided for in U.S. Note 2(d), Subchapter XIX, HTSUS.
Subheading 9819.11.12, HTSUS, provides for preferential tariff treatment for articles imported from a designated beneficiary sub-Saharan African country enumerated in U.S. note 1 provided, as follows:
Apparel articles wholly assembled in a lesser developed such country enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this chapter, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive……
U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12.
Section 10.213(a)(5), Customs Regulations (19 CFR 10.213(a)(5)),
states that preferential tariff treatment applies to textile and apparel articles that are imported directly into the customs territory of the United States from a beneficiary country and "wholly assembled in one or more lesser developed beneficiary countries regardless of the country of origin of the fabric used to make the articles. "
You distinguish Headquarters Ruling Letter ("HRL") 965146, dated February 25, 2002, in which Customs held that women's knitted pants were not eligible for preferential tariff treatment under subheading 9819.11.09, HTSUS, because foreign-origin elastic was used to make the waistband.
We concur with you that this case is distinguishable from HRL 965146 because the garment would be entered under subheading 9819.11.12, which does not require that the fabric or yarn be of U.S. or beneficiary country origin. Section 10.213(a)(5), by express language, states that the use of foreign-origin fabric would not render an article ineligible for AGOA treatment under this provision. Therefore, the use of foreign-origin elastic fabric imported in rolls used to make the waistband would not render the women's trousers ineligible for classification in subheading 9819.11.12.
Based on the facts presented, the women's trousers would be entitled to be classified in subheading 9819.11.12, HTSUS, subject to the quantitative limits set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS.
HOLDING:
Based on the information provided, the women's trousers are eligible for duty free treatment under subheading 9819.11.12, HTSUS, subject to the quantitative limitations set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, and assuming that the garments are imported from a designated beneficiary country directly into the customs territory of the United States.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division