OT:RR:CTF:VS H259212 CMR
Elise Shibles, Esq.
Sandler, Travis & Rosenberg, P.A.
505 Sansome Street
Suite 1475
San Francisco, CA 941111
RE: DR-CAFTA Cumulation; Heading 9822.05.11; Knit garment of heading 6212
Dear Ms. Shibles:
This is in response to your request for a ruling on behalf of your client, APS Global, LLC, regarding the eligibility of a men’s compression garment for preferential tariff treatment under the Dominican Republic – Central America – United States Free Trade Agreement (DR-CAFTA). You indicate that the garment will be imported through various ports of entry.
FACTS:
The garment at issue, style 1274, is an 84% polyester/16% elastane pull-on men’s compression shorts undergarment that covers the lower torso from the waist to above the knees. It has an uncovered elasticized waistband measuring approximately 1-3/4 inches wide. The garment features a center panel at the front and back and a square panel gusset. It has flatlock stitching at the seams. The garment is substantially similar to the garment described in New York Ruling Letter N070135, dated August 28, 2009, which was classified in heading 6212 as a body supporting garment.
You describe the manufacturing process of the garment as follows:
Polyester filament of chapter 54, for component that determines classification, extruded in the USA;
Elastomeric filament of chapter 54, for component that determines classification, extruded in USA;
Fabric of 6004, for component that determines classification, knitted in Mexico;
Sewing thread of heading 5204, 5401 or 5508 or yarn of heading 5402 used as sewing thread, formed and finished in a DR-CAFTA country;
Narrow elastic of heading 6002 or subheading 5806.20 formed and finished in a DR-CAFTA country; Cut and sewn in El Salvador;
Shipped directly to the United States.
ISSUE:
Whether style 1274 is eligible for preferential tariff treatment under the DR-CAFTA?
LAW AND ANALYSIS:
The DR-CAFTA was signed by the governments of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States on August 5, 2004. It was approved by the U.S. Congress with the enactment on August 2, 2005, of the Dominican Republic-Central America-United States Free Trade Agreement Implementation Act (the Act), Pub. L. 109-53, 119 Stat. 462 (19 U.S.C. 4001 et seq.).
General Note (GN) 29, HTSUS, implements the DR-CAFTA. GN 29(b), subject to the provisions of subdivisions (c), (d), (m) and (n) of GN 29, sets forth the criteria for determining whether a good (other than agricultural goods provided for in GN 29(a)(ii)) is an originating good for purposes of the DR-CAFTA.
GN 29(d)(vii) provides:
(vii) Notwithstanding other provisions of this note, for purposes of determining whether a good of chapter 62 of the tariff schedule is an originating good, materials used in the production of such a good that are produced in the territory of Canada or of Mexico and that would be originating under this note if produced in the territory of a party to the Agreement shall be considered as having been produced in the territory of a party to the Agreement, provided that the United States Trade Representative has determined in a notice published in the Federal Register that the requirements of Appendix 4.1-B of the Agreement specified in subdivision (a) of this note have been met with respect to Canada or Mexico, as the case may be, and has announced the effective date of U.S. note 21 to subchapter XXII of chapter 98 of the tariff schedule. Such goods shall be entered under subheading 9822.05.05 of the tariff schedule, subject to the terms of such U.S. note 21, on or after the effective date specified in such notice. [Compiler’s Note: effective with respect to materials from MX, 8/15/08; reference to subheading 9822.05.05 is obsolete and current provisions appear to be 9822.05.11 and 9822.05.13.]
As stated in the compiler’s note from the HTSUS, this provision became effective with respect to materials from Mexico on August 15, 2008. The applicable provision in the HTSUS is heading 9822.05.11, HTSUS, which provides for:
Apparel goods of chapter 62 for which the treatment provided in U.S. note 21 to this subchapter is appropriate:
If entered into the customs territory of the United States in aggregate quantities not to exceed the quantitative limit specified in U.S. note 21(b) to this subchapter . . . . .
U.S. Note 21 states, in relevant part:
(a) For purposes of heading 9822.05.11 and 9822.05.13, the treatment provided for in general note 29(d)(vii) to the tariff schedule shall be limited to goods imported into the territory of the United States from a party to the Agreement as defined in general note 29(a), other than Dominican Republic, in aggregate quantities not to exceed the overall limit set forth in subdivisions (b) of this note, except as provided in subdivision (c) of this note. For purposes of determining the quantity of square meter equivalents (SME) to be charged against the overall limit, the conversion factors listed in Correlation: U.S. Textile and Apparel Category System with the Harmonized Tariff Schedule of the United States of America 2003, U.S. Department of Commerce, Office of Textiles and Apparel, or successor publication, shall apply.
In this case, the garment at issue, style 1274, is a good of chapter 62. The formation of the knit fabric from U.S. extruded polyester and elastomeric filaments would be originating under GN 29 if produced in a DR-CAFTA party. Therefore, by application of GN 29(d)(vii), the knit fabric produced in Mexico is considered as having been produced in the territory of a party to the Agreement. As the origin of the elastic waistband fabric is not identified, it is assumed to be non-originating. Therefore, we must look to the tariff shift rule applicable to goods of heading 6212 and any relevant chapter 62, GN 29(n) rules.
Chapter rule 2, Chapter 62, GN 29(n) states, in relevant part:
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 the rule for that good.
The applicable tariff shift rule, Rule 40, Chapter 62, GN 29(n), states:
A change to subheadings 6212.20 through 6212.90 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is cut or knit to shape, or both, and sewn or otherwise assembled in the territory of one or more of the parties to the
Agreement.
The knit fabric is the component that determines the classification of the good and therefore the component which must satisfy the tariff shift rule. The fabric produced in Mexico is treated as if produced in the territory of a party and the garment is cut and sewn in El Salvador. Therefore the garment meets the requirements of the tariff shift rule.
The other relevant Chapter 62, GN 29(n) chapter rules which are relevant in this case are chapter rule 3 which requires that goods of the chapter, except for certain excepted goods, containing fabrics of heading 6002 or subheading 5806.20 shall be considered originating only if such fabrics are both formed from yarn and finished in the territory of one or more of the DR-CAFTA parties; and chapter rule 4, which requires that goods of the chapter, except for certain excepted goods, containing sewing thread of heading 5204, 5401 or 5508 or yarn of heading 5402 used as sewing thread shall be considered originating only if such sewing thread or yarn is both formed and finished in the territory of one or more of the parties to the Agreement. In this case, the elastic waistband fabric of heading 6002 and the sewing thread used in assembling the garment are formed and finished in a DR-CAFTA country.
HOLDING:
As the garment at issue, style 1274, meets the requirements of GN 29(d)(vii) and the relevant rules set forth in GN 29(n), it qualifies for classification in heading 9822.05.11, HTSUS, and preferential tariff treatment under the DR-CAFTA subject to the quantitative limitations set forth for goods of heading 9822.05.11, HTSUS.
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 CBP officer handling the transaction.
Sincerely
Monika R. Brenner, Chief
Valuation and Special Programs Branch