OT:RR:CTF:VS H250945 CMR

Port Director
U.S. Customs & Border Protection
9777 Via De La Amistad
San Diego, CA 92154

RE: Application for Further Review of Protest 2506-13-100031; Classification of garment; NAFTA eligibility

Dear Port Director:

This is in response to the Application for Further Review of Protest 2506-13-100031 filed against your decision to deny preferential tariff treatment under the North American Free Trade Agreement (NAFTA) for certain jackets imported by Prolink International. The protest was timely filed by counsel for Prolink and the AFR was properly approved by the port.

FACTS:

The garment at issue, style AUHQ, was entered as a men’s man-made fiber jacket of subheading 6101.30, Harmonized Tariff Schedule of the United States (HTSUS), with a claim for preferential tariff treatment under the NAFTA. The entry was liquidated on October 19, 2012 and a timely protest was filed on April 16, 2013. Subsequent to filing the protest, the protestant argued that the garment is properly classified as a cardigan-type garment of heading 6110, HTSUS.

In support of the NAFTA claim, the protestant submitted various documents, including, a production flow chart, NAFTA certificates of origin for the shell fabrics and polyester thread; documents showing transfer of fabric from inventory to the production area; cutting tickets; document showing the transfer of cut pieces from the cutting area to the sewing area; document showing the transfer of completed jackets from the sewing area to the packing area; employee wage records; document showing the total number of jackets sewn by specific purchase order; CBP 7501 and commercial invoice; list of machinery used; production process; costed bill of materials; and NAFTA Certificate of Origin for Style AUHQ.

The protest was filed against your port’s determination that the garment at issue did not qualify for the NAFTA. The port’s determination was based on the garment’s classification as a jacket of subheading 6101.30, HTSUS, and the view that the material inside the garment’s front panel constituted lining material and not pocketing material. Although counsel asserts that the garment is not lined, the two front panels of the garment, from the shoulder seam to the bottom of the garment and width of each panel, have a layer of 100 percent polyester knit mesh fabric sewn onto them. As a jacket of subheading 6101.30, HTSUS, the garment is subject to a visible lining rule set forth in Rule 1, Chapter 62, General Note (GN) 12, HTSUS. The protestant submitted a supplemental argument, dated November 29, 2013, that the garment is properly classified in subheading 6110.30, HTSUS, which provides for knitted or crocheted, man-made fiber sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles.

Counsel for the protestant, in the supplemental submission, lists the features of the garment as being comprised of:

Long Sleeves Full Front Opening (Lightweight Plastic Zipper) Lightweight Polartec® fleece fabric of 53% Polyester, 38% Nylon, 9% Spandex smooth-face jersey fabric (Fabric weight is 7.1 ounces per square yard) Two pockets at the waist Bottom of garment is below the waist Stand-up collar Elastic-bound cuffs and hem Not lined

Protestant argues the garment is sold and marketed as a “layering” garment that is used in combination with additional garments, such as, a jacket, parka, coat, etc. It is stated in the supplemental submission that the garment is used as an “insulating layer to protect the wearer from the cold but does not offer protection against wind or rain. The insulating layer is designed to retain heat by trapping air close to your body.” If CBP disagrees with the protestant’s claim that the garment is classifiable in subheading 6110.30, HTSUS, protestant asserts that the material inside the front panels of the garment is pocketing material and not “visible lining.”

The garment is imported with tags attached. One tag addresses the characteristics of Polartec® fabric, specifically Polartec® Power Stretch Pro™. It lists the fabric’s characteristics as: Nylon surface for added durability 4-way stretch Keeps your skin dry when you sweat Highly breathable Abrasion resistant Comfortable next-to-skin Machine Washable

Another tag attached to the garment is specific to the Summit Series™ which the garment is part of. With regard to the Summit Series™, the tag states:

Summit Series products are built to endure extremes of weather and terrain while delivering the highest level of performance from base camp to the summit.

A third tag informs the consumer that the garment has a water repellant finish. It states:

Durable Water Repellant (DWR) finishes reinforce the water repellency characteristics of fabrics and zippers. The addition of an enhanced hydrophobic treatment enables the DWR to adhere to materials for an extremely extended lifetime.

We note that the cutting tickets submitted refer to the “pocket material” as “lining;” and the cutting pattern sheet refers to lining, shell and pellon.

We requested a sample garment from the port. It arrived with tags attached which would be on the garment at the time of sale.

ISSUE:

Whether the garment at issue, style AUHQ, is properly classified as a jacket of subheading 6101.30, HTSUS, or as a knitted or crocheted, man-made fiber garment of heading 6110, HTSUS, similar to a sweater.

Whether the fabric sewn to the inside front panels is a visible lining or pocketing material and, based on that decision, whether the garment qualifies for preferential tariff treatment under the NAFTA.

LAW AND ANALYSIS:

Before we determine the eligibility of the garment at issue under the NAFTA, we must address the classification question. Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to [the remaining GRIs taken in order]."

Classification

In this case, the garment was originally entered under subheading 6101.30, HTSUS, as a men’s man-made fiber knit jacket. After the garment’s eligibility under the NAFTA came into question, the protestant submitted the garment should be classified under subheading 6110.30, HTSUS, as a cardigan-type garment. Classification in subheading 6110.30, HTSUS, removes the requirement of meeting the visible lining rule under the NAFTA which is required of garments classified in subheading 6101.30, HTSUS.

Counsel for the protestant cited jacket features from the CBP Informed Compliance Publication (ICP), “Classification: Apparel Terminology under the HTSUS.” These features are:

Fabric weight equal to or exceeding 10 ounces per square yard A full or partial lining Pockets at or below the waist Back vents or pleats. Also side vents in combination with back seams A belt or simulated belt or elasticized waist on hip length or longer shirt-jackets. Large jacket/coat style buttons, toggles or snaps, a heavy-duty zipper or other heavy-duty closure, or buttons fastened with reinforcing thread for heavy-duty use Lapels Long sleeves without cuffs Elasticized or rib-knit cuffs Drawstring, elastic or rib-knit waistband.

Counsel admits that the garment at issue possesses three or more jacket features, i.e., pockets at the waist, elasticized or rib-knit cuffs, and elastic or rib-knit waistband. The garment, in our view, also features a partial lining. Counsel argues that the lightweight knit fabric (7.1 ounces), the use of the garment as a “layering” garment, and the inability to wear the garment over all other clothing for protection against the weather, makes classification of the garment as a jacket unreasonable. Counsel argues the garment is worn and used like a sweater. It is worn over a shirt, t-shirt or pullover. Counsel submits the garment’s appearance does not indicate use as a jacket or windbreaker. We disagree.

Counsel cites Headquarters Ruling Letters (HQ) 964430, dated November 28, 2000, and 967498, dated February 15, 2005; New York Ruling Letter (NY) L85436, dated June 24, 2005; and Port Decision (PD) F84855, dated April 6, 2000, as supportive of his argument that the subject garment should be classifiable as similar to a cardigan in heading 6110, HTSUS, and not as a jacket of heading 6101, HTSUS.

In HQ 964430, the garment at issue was constructed of a lightweight knit fabric, not napped on either side, with more than nine stitches per two centimeters, measured in the direction in which the stitches are formed. The weight of the fabric was not provided. The woman’s garment featured a full-front, zippered opening; long sleeves; an attached hood with a functional drawstring and two patch pockets sewn below the waist on the front of the garment. The sleeve ends and bottom of the garment were hemmed with overlock stitching. The garment extended from the shoulders to top of the hips and was suitable for wear over other garments such as a blouse or t-shirt.

In HQ 967498, the garments at issue were constructed of knit velour fabrics which differed in fabric composition, but which were not napped on the inside of the garments. The fabric weights were 7.2 ounces and 6.4 ounces per square yard. The garments featured long sleeves with rib knit cuffs, kangaroo front pockets, rib knit waistbands (partial in one, and full in the other), and a full front opening with a heavy-duty zipper. One style featured a hood and the other had a stand-up collar.

In NY L85436, the garment at issue was constructed of a double-knit fabric weighing 8.55 ounces per square yard. The garment featured a zippered front opening, long sleeves with hems and interior knit cuffs, two front zippered pockets, a small zippered pocket on the upper exterior of the left sleeve, a straight hemmed bottom and a hood.

In PD F84855, the subject garment was constructed of finely knit fleece fabric which weighed no more than 10 ounces per square yard. The garment featured long sleeves, a full-front opening secured by five shirt-type buttons, two pockets below the waist and elasticized rib knit on the cuffs and waistband.

In reviewing each of the rulings cited by counsel, one can find characteristics which distinguish the garments at issue therein from the garment at issue here. In classification of garments, the garment itself is a potent witness. See HQ 953834, dated August 19, 1993, wherein we stated: “. . . , the garment speaks for itself and is indicate of classification.” See also HQ 087483, dated December 19, 1990; and, HQ 088904, dated February 19, 1992 (each references the principle of the “garment speaks for itself.”). The garments in the rulings cited by counsel are distinguishable from the garment at issue herein. The fabrics used to make three of the garments were not napped on the inside of the garments. Only the garment in PD F848655 was made with a knit fleece fabric and that garment had a full-front opening secured by five shirt-type buttons. While the weight of the fabric from which the garment is made is a consideration, it is only one factor in determining the classification of the garment. The relevant definition of a jacket from the ICP is:

. . . garments designed to be worn over another garment, for protection against the elements. Jackets cover the upper body from the neck area to the waist area, but are generally less than mid-thigh length. They normally have a full front opening, although some jackets may have only a partial front opening. Jackets usually have long sleeves. Knit jackets (due to the particular character of knit fabric) generally have tightening elements at the cuffs and at the waist or bottom of the garment, although children's garments or garments made of heavier material might not need these tightening elements. This term excludes knit garments that fail to qualify as jackets because they do not provide sufficient protection against the elements. Such garments, if they have full-front openings, may be considered cardigans of heading 6110 (other).

In this case, the garment is described by counsel as having “elastic-bound cuffs and hem.” Therefore, it has tightening elements at the cuffs and bottom of the garment. This is unlike the garments in HQ 964430 (sleeve ends and bottom hemmed with overlock stitching); and, NY L85436 (a straight hemmed bottom). While HQ 967498 and PD F84855 addressed garments with rib knit cuffs and waistbands, other features, such as the fabric used to make the garment or the type of full-front closure, distinguish the garments ruled upon in these decisions from the garment at issue herein.

Furthermore, this garment has a partial lining. In HQ H043056, dated May 5, 2009, CBP classified a garment which had close fitting sleeve cuffs, a heavy duty zipper extending through the collar, a tight-fitting banded bottom and interior lining fabric on the front panels as a jacket. The coverage of the lining material in the garment classified in HQ H043056 is substantially similar to the coverage of the lining material in this case.

In HQ 956795, dated January 25, 1995, CBP classified a men’s garment of 100 percent knit double-faced polyester fleece fabric weighing 7.87 ounces per square yard in subheading 6110.30, HTSUS. The garment had a partial front zipper opening extending from the collar to lower chest area, a convertible collar, two zippered pockets below the waist, an inset pocket on the left chest with a zipper closure, narrow rib knit capping finishes on the placket, collar, and wrists, and a straight-hemmed bottom. In classifying the garment in subheading 6110.30, HTSUS, the ruling noted:

. . . if style 1201 were designed with a full frontal zipper, the classification result would be different. See HRL 088289, dated February 11, 1991, in which Customs discussed the distinctions between sweatshirts classifiable under heading 6110, HTSUSA, and sweatshirts with full frontal zippers which were held classifiable as jackets of heading 6101, HTSUSA. That ruling recognized that these two types of garments are perceived differently in the trade. This finding is corroborated in the Christmas 1994 L.L. Bean Catalogue which describes a double-fleece garments with a hood and a full frontal zipper as a “jacket” and a garment with a partial front zipper as a “pullover.”

The subject garment is designed, marketed and sold as a jacket. See www.thenorthface.eu where the garment is listed as part of the “Summit Series” Jackets and also Midlayers; www.mont-tnf-de/M-Flux-Power-Stretch-Jacket/en, where the garment is described as:

a popular solo or mid layer fleece jacket for year-round athletic pursuits. The soft Polartec® Power Stretch® fabric features body hugging four-way stretch properties and remarkable breathability. There’s a sleek alpine fit with elastic binding at the cuffs and hem, and two hand pockets for warming chilled fingers or stashing essentials. The North Face Men’s Flux Power Stretch® Jacket is a multisport fleece coat that boasts Summit Series™ credentials so you know it has been tested in the extremes.

It appears the garment is no longer available in the U.S. Although the marketing information we found appears on websites for markets other than the U.S., we have no reason to believe the garment would be marketed differently in the U.S. Further, consumers tend to use a garment in accordance to how it is marketed and sold. See Mast Industries v. United States, 9 CIT 549, 551 (1985), aff'd, 786 F. 2d 1144 (1986); See also, St. Eve International, Inc. v. United States, 11 CIT 224 (1987). In this case, the garment is marketed as a jacket. It is also marketed as a “midlayer” garment, but that does not negate its use as a jacket.

Furthermore, the retail tags attached to the garment are indicative of its use as a jacket. The water repellent finish is more likely to be found on a jacket, and not a garment similar to a cardigan. Additionally, the characterization of the grouping to which the garment belongs as products built to endure extremes of weather creates the impression this garment is designed to do more than provide warmth similar to a sweater.

In this case, we look not only to the marketing of the garment, but to the fabric used to make the garment, i.e. the Polartec® Power Stretch® Pro ™ fabric. The web site, http://polartec.com, states under “HOW IT WORKS”:

Polartec® Power Stretch® Pro™ has the ability to retain warmth without restricting movement or agility during activities. The outer surface has a low-friction finish that reduces irritation when worn with other fabrics and increase overall abrasion resistance. This next-to-skin layer stays dry, breathable and comfortable by continuously transferring moisture vapor for rapid evaporation.

This enhanced performance versatility provides the flexible support and warmth needed for reliable comfort in any fitness based activity. Polartec® Power Stretch® Pro™ wicks moisture and regulate[s] breathability like a base material with the fortified ability to handle direct exposure to the elements.

Emphasis added.

Although the fabric is described as comfortable next-to-skin, it is also described as able to handle direct exposure to the elements. In addition, the lining of the front panels prevents the Polartec® Power Stretch® Pro™ fabric used for the front of the garment from direct skin contact. The fabric is designed to handle direct exposure to the elements and the garment is designed, marketed and sold as a jacket. Therefore, the classification of the garment as a knit jacket of subheading 6101.30, HTSUS, at entry was proper.

NAFTA Eligibility

The NAFTA is implemented in GN 12 of the HTSUS. GN 12(a)(ii) states that goods are eligible for the NAFTA rate of duty if they originate in the territory of a NAFTA party and qualify to be marked as goods of Mexico. GN 12(b) sets forth the various methods for determining whether a good originates in the territory of a NAFTA party. Specifically, these provisions provide, in relevant part, as follows:

Goods originating in the territory of a party to the North American Free Trade Agreement (NAFTA) are subject to duty as provided herein. For the purposes of this note—

(i) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Canada under the terms of the marking rules set forth in regulations issued by the Secretary of the Treasury (without regard to whether the goods are marked), and goods enumerated in subdivision (u) of this note, when such goods are imported into the customs territory of the United States and are entered under a subheading for which a rate of duty appears in the "Special" subcolumn followed by the symbol "CA" in parentheses, are eligible for such duty rate, in accordance with section 201 of the North American Free Trade Agreement Implementation Act.

* * *

(b) For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if—

they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

they have been transformed in the territory of Canada, Mexico and/or the United States so that—

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

* * *

As the garment is classifiable as a jacket of subheading 6101.30, HTSUS, and is not wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States, we look to see if it meets the applicable tariff shift rule set forth in GN 12(t). The applicable tariff shift rule for the garment at issue is:

A change to subheadings 6101.10 through 6101.30 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516 or 6001 through 6006, provided that:

the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties, and

the visible lining fabric listed in chapter rule 1 for chapter 61 satisfies the tariff change requirements provided therein.

In this case, documentation was submitted to show that the Polartec® Power Stretch® fabric qualifies as originating fabric under the NAFTA and that the garment was cut and sewn in Mexico. However, the garment is also subject to the visible lining rule set forth in rule 1 for chapter 61.

Your port cites to two Headquarters’ Ruling Letters (HQ) that are directly on point, i.e., HQ H043056 and HQ 956423, dated December 20, 1994. In HQ H043056, Customs and Border Protection (CBP) held that a garment in which the front panels were lined with 100 percent polyester knit tricot fabric was subject to the visible lining rule. In that case, as in this, the lining material served as a backing for front pockets created by sewing zippered openings to the outershell of the garment. The ruling examined various definitions of “lining” and determined that the fabric in the main body of the garment lined a significant portion of each front panel, met the definitions for lining considered in the ruling and added an addition layer of material to provide additional warmth and protection against the elements. While counsel argues herein that the polyester mesh fabric lining the front panels of the garment at issue does not provide additional warmth and protection against the elements, these features are not requirements of a lining. See HQ 956423, wherein a garment classifiable in subheading 6201.92, HTSUS, and subject to the visible lining rule, was found not eligible for the NAFTA due to cotton flannel fabric used as a lining for the yoke of the garment.

Counsel argues that the 100 percent polyester fabric which is sewn to the interior of each front panel of the garment is not lining material, but submits that it is instead, pocketing fabric. Counsel states:

In addition to providing optimum storage opportunities the pocketing material was also designed for aesthetic purposes to prevent the stitches from being visible on the front side of the garment. By stretching the pocket fabric all the way up to the neck area the designers were able to use the panels sew lines that are already present in order to disguise the stitching of the pockets.

Counsel describes the inner fabric as a 100 percent polyester mesh, open-work design, not a fabric typically used for lining garments, nor a fabric which adds warmth or wind resistance to the garment. This fabric is produced in Taiwan.

As previously stated, the polyester knit mesh fabric sewn to the interior of the front panels is a lining. The various in-bond invoices submitted to CBP, listing the 100 percent polyester mesh fabric, identifies the material as “F-Lining-100P-TW Fabric Rolls 100% Polyester.” These invoices indicate the material is classifiable in subheading 6006.32.01, HTSUS. The visible lining rule set forth in rule 1, chapter 62, GN 12, states:

A change to any of the following headings or subheadings for visible lining fabrics:

5111 through 5112, 5208.31 through 5208.59, 5209.31 through 5209.59, 5210.31 through 5210.59, 5211.31 through 5211.59, 5212.13 through 5212.15, 5212.23 through 5212.25, 5407.42 through 5407.44, 5407.52 through 5407.54, 5407.61, 5407.72 through 5407.74, 5407.82 through 5407.84, 5407.92 through 5407.94, 5408.22 through 5408.24 (excluding tariff items 5408.22.10, 5408.23.11, 5408.23.21 or 5408.24.10), 5408.32 through 5408.34, 5512.19, 5512.29, 5512.99, 5513.21 through 5513.49, 5514.21 through 5515.99, 5516.12 through 5516.14, 5516.22 through 5516.24, 5516.32 through 5516.34, 5516.42 through 5516.44, 5516.92 through 5516.94, 6001.10, 6001.92, 6005.31 through 6005.44 or 6006.10 through 6006.44

from any other heading outside that group.

As the visible lining is classified in subheading 6006.32 and is produced in Taiwan, the garment fails to meet the requirement of the visible lining rule and does not qualify for preferential tariff treatment under the NAFTA.

HOLDING:

Style AUHQ is classifiable as a men’s man-made fiber knit jacket in subheading 6101.30.2010, HTSUS, and does not qualify for preferential tariff treatment under the NAFTA. It is subject to the duty rate applicable at the time of entry which was 28.2 percent ad valorem. The protest should be denied.

In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division