CLA-2 RR:CR:TE 965960 ttd

Robert Patchappen, Managing Director
Southern Textiles
P.O Box 19617
Domerton
4015
South Africa

RE: African Growth and Opportunity Act; Drawstrings; Elasticized Narrow Woven Fabric

Dear Mr. Patchappen:

This is in response to your letter of September 23, 2002, requesting a binding ruling on the eligibility of apparel that incorporates certain drawstrings and elasticized narrow woven fabric for preferential treatment under the African Growth and Opportunity Act (“AGOA”). Samples were submitted.

FACTS: The items under consideration are two drawstrings and one elasticized narrow woven fabric. Each of the two drawstrings is a round woven braid construction, measuring approximately ¼ inch in diameter. They appear to be identical, except for their color (one is white and the other is black). The drawstrings are composed of sasol yarns, which are spun in South Africa from sasol fibers grown in South Africa. It is our understanding that the yarns are woven or braided to form the drawstrings in South Africa.

The elasticized narrow woven fabric is white in color and measures approximately 2 ¼ inches in width. The woven fabric is composed of sasol yarns and rubber thread. The sasol yarns are spun in South Africa from sasol fibers grown in South Africa. The rubber thread used in the elastic is from Malaysia. It is our understanding that the elastic fabric is woven in South Africa.

You state that the drawstrings and elasticized narrow woven fabric are manufactured for the clothing, upholstery, luggage, shoe and other allied industries. We note that in your letter, you did not provide any specific examples of wearing apparel in which the subject items will be incorporated.

ISSUE:

Whether the subject drawstrings and/or elasticized narrow woven fabric that will be incorporated into wearing apparel are eligible for preferential treatment under the AGOA?

LAW AND ANALYSIS: The Trade and Development Act of 2000 (“the Act”) was signed into law on May 18, 2000 (Pub. L. 106-200, 114 Stat. 251). Title I of the Act concerns trade benefits for sub-Saharan Africa and is referred to as the African Growth and Opportunity Act (“AGOA”). Section 112 of the Act (codified at 19 U.S.C. 3721) specifies the textile and apparel articles that are eligible for duty-free and quota-free treatment when imported directly into the customs territory of the U.S. from a beneficiary sub-Saharan African country. Section 3108 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), enacted on August 6, 2002, amended the AGOA to modify the treatment accorded to textile and apparel articles imported from beneficiary sub-Saharan African countries.

Presidential Proclamation 7350 dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 FR 59321), implemented the AGOA by designating the eligible beneficiary sub-Saharan African countries and amending Chapter 98, Harmonized Tariff Schedule of the U.S. (“HTSUS”) (including the creation of new subchapter XIX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the 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.

South Africa was designated as a beneficiary sub-Saharan African country under AGOA by Presidential Proclamation. The USTR issued a determination finding that this sub-Saharan country has adopted an effective visa system and related procedures to prevent unlawful transshipment and the use of counterfeit documents in connection with shipments of textile and apparel articles and have implemented and follow, or are making substantial progress toward implementing and following, the customs procedures required by the AGOA, effective March 7, 2001 for South Africa. See 66 Fed. Reg. 14425, dated March 12, 2001.

Garments meeting the description in subheading 9819.11.09, HTSUSA, are eligible for preferential treatment under the AGOA. It provides as follows:

Apparel articles wholly assembled in one or more such countries from fabric wholly formed in one or more such countries from yarn originating in either the United States or one or more such countries (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 and are wholly formed and cut in one or more such countries), or from components knit-to-shape in one or more such countries from yarns originating either in the United States or in one or more such countries, or apparel articles wholly formed on seamless knitting machines in such a country from yarns originating either in the United States or one or more such countries, subject to the provisions of U.S. note 2 to this subchapter.

The definition of "wholly formed" is set forth in 19 CFR 10.212 which provides: "Wholly formed," when used with reference to yarns or thread, means that all of the production processes, starting with the extrusion of filament or the spinning of all fibers into yarn or both and ending with a yarn or plied yarn, took place in a single country, and when used with reference to fabric(s), means that all of the production processes, starting with polymers, fibers, filaments, textile strips, yarns, twine, cordage, rope, or strips of fabric and ending with a fabric by a weaving, knitting, neddling, tufting, felting, entangling or other process, took place in a single country. . . .

In this situation, the two drawstring cords are wholly formed in South Africa from yarns originating in South Africa. Accordingly, they may be incorporated into apparel articles eligible for preferential treatment under the AGOA.

Concerning the elasticized narrow woven fabric, you indicated that the sasol yarn used to make the subject fabric is wholly formed in South Africa while the rubber thread is from Malaysia. Thus, the unresolved issue is whether the presence of the foreign origin rubber thread in the elasticized fabric disqualifies an otherwise eligible article from preferential treatment under the AGOA.

It is Customs belief that the term “yarn” as used in the AGOA refers to textile yarn. In this situation, the rubber thread used in the elasticized narrow woven fabric is not considered a textile yarn. Rubber thread is provided for under chapter 40 of the HTSUSA, rather than Section XI HTSUSA, which specifically provides for textiles and textile articles. Therefore, the subject elasticized narrow woven fabric remains eligible for preferential treatment under the AGOA, despite the incorporation of the foreign origin rubber thread.

HOLDING:

Provided the subject drawstrings and elasticized narrow woven fabric are manufactured as described above, apparel articles that utilize them, may be eligible for duty free treatment under the provisions of the AGOA, provided the apparel articles are imported directly into the customs territory of the U.S. from an AGOA beneficiary country and the apparel articles meet the remaining requirements of the relevant AGOA provisions.

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 Harmon, Acting Director
Commercial Rulings Division