CLA-2 RR:CR:TE 965559 JFS
Barbara Sasso
Miami International Forwarders
1801 N.W. 82 Avenue
Miami, FL 33126-1013
RE: U.S.-Caribbean Basin Trade Partnership Act; Subheading 9820.11.24; NAFTA, Annex 401; Uncut Corduroy; Not Short Supply
Dear Ms. Sasso:
This is in response to your letter, dated February 28, 2002, on behalf of Topsville, Inc., requesting a binding ruling on the eligibility for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (CBTPA) of a pair of girl’s jeans.
FACTS:
The apparel article under consideration is a pair of girl’s jeans. You state that the jeans will be manufactured from denim and corduroy fabrics. The denim fabric will be manufactured in the U.S. and the corduroy fabric will be manufactured in Hong Kong. The fabric will be cut and sewn into a pair of jeans in the Dominican Republic. You state that the corduroy fabric is 100% cotton, 18 wale, uncut corduroy. Uncut corduroy is classified in subheading 5801.21.0000, HTSUSA, which provides for uncut weft pile fabrics.
The backs of the jeans, the right front leg and approximately one-half of the front left leg of the jeans will be composed of the denim fabric. The rear pocket and the bottom quarter of the front leg will be composed of printed corduroy fabric. The waistband and two diagonal one-inch strips on the right front leg will be composed of corduroy fabric that is not printed.
You request that Customs issue a ruling “determining the classification and eligibility for entry as a ‘short supply’ fabric under [the] CBTPA.”
ISSUE:
Whether jeans composed of U.S. denim fabric components and uncut corduroy fabric components are eligible for duty-free treatment under the CBTPA?
LAW AND ANALYSIS:
Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213(b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.
Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles. “Transition period” is defined in section 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.
Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.
The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country: (1) that is designated as a CBTPA beneficiary country; and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles. The Dominican Republic is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).
In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000.
The relevant provision is set forth in 19 U.S.C. 2703(b)(2)(A)(v)(I), which provides as follows:
Apparel articles that are both cut (or knit-to-shape) and sewn or otherwise assembled in one or more CBTPA beneficiary countries, from fabrics or yarn that is not formed in the United States or in one or more CBTPA beneficiary countries, to the extent that apparel articles of such fabrics or yarn would be eligible for preferential treatment, without regard to the source of the fabrics or yarn, under Annex 401 of the NAFTA.
Subheading 9820.11.24, HTSUS, was created for the entry of articles eligible for preferential treatment under the above section (see Presidential Proclamation 7351). This subheading provides for the duty-free entry of:
Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries from fabrics or yarn not formed in the United States or in one or more such countries, provided that such apparel articles of such fabrics or yarn would be considered an originating good under the terms of general note 12(t) to the tariff schedule without regard to the source of the fabric or yarn if such apparel article had been imported from the territory of Canada or the territory of Mexico directly into the customs territory of the United States.
Emphasis added. Accordingly, if an apparel article is “of” a fabric that is considered to be a “short supply” fabric under GN 12(t), the fabric does not have to be manufactured in the U.S. or a beneficiary country.
General Note (GN) 12(t), HTSUS, Chapter Rule 2(b) to Chapter 62, states that:
Apparel goods of this chapter shall be considered to originate if they are both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties and if the fabric of the outer shell, exclusive of collars or cuffs, is wholly of one or more of the following:
. . .
(B) Corduroy fabrics of subheading 5801.22, containing 85 per cent or more by weight of cotton and containing more than 7.5 wales per centimeter
. . .
Corduroy fabrics of subheading 5801.22, HTSUSA, are all “cut” corduroy fabrics. You describe the corduroy fabric under consideration as being “uncut.” Uncut corduroy fabric, i.e., corduroy fabric which has not had the floats cut, is classified in subheading 5801.21.0000, HTSUSA, the provision for uncut weft pile fabrics. The fabric is not cut and is not classified in subheading 5801.22, HTSUSA. Accordingly, the fabric does not meet the terms of General Note 12(t), and is not considered a “short supply” fabric under the NAFTA.
Please note that this ruling does address whether the garment is of a “short supply” fabric. Should you change the corduroy fabric in accordance with this ruling, you will need to submit a new ruling request for that determination. If you choose to submit a new ruling request, please state whether the U.S. fabric is wholly formed from U.S. yarns, and please provide more detail as to how the “short supply” fabric is manufactured.
HOLDING:
Pants with an outer shell of denim fabric manufactured in the United States, with components of uncut corduroy fabric formed in China, and produced as described above, are not eligible for preferential treatment under the CBTPA.
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 E. Harmon, Acting Director
Commercial Rulings Division