CLA-2 RR:TC:TE 960525 jb
Gonzalo P. Farias
Farias & Farias, Inc.
P.O. Box 243
Laredo, Texas 78042
RE: Country of origin determination for a knit dress; NAFTA not
applicable; Article 509; 19 CFR 102.21(c)(2); tariff shift
Dear Mr. Farias:
This is in reply to your letter dated March 19, 1997, on
behalf of your client, Discovery International Associates, Inc.,
requesting classification under the Harmonized Tariff Schedule of
the United States (HTSUS) and a country of origin determination
for a women's knit dress which will be imported into the United
States.
FACTS:
The subject merchandise consists of a women's knit dress
made of 90 percent polyester and 10 percent lycra fabric. The
dress features a round neckline, shoulder pads, and long hemmed
sleeves. The dress extends from the wearer's neck and shoulders
to below the mid-thigh area.
The manufacturing operations are as follows:
KOREA
fabric is knit
MEXICO
fabric is cut into component parts
assembly into the completed garment
ISSUE:
1. What is the proper classification for the subject
merchandise?
2. Whether the subject merchandise is eligible for duty free
treatment under the North American Free Trade Agreement
(NAFTA)?
3. Can the merchandise be entered with a certificate of
eligibility under the NAFTA tariff preferential level
(TPL) rate of duty?
4. What is the country of origin of the subject
merchandise?
LAW AND ANALYSIS:
Classification
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is in accordance
with the General Rules of Interpretation. GRI 1 requires that
classification be determined according to the terms of the
headings and any relative section or
chapter notes. Where goods cannot be classified solely on the
basis of GRI 1, the remaining GRI will be applied, in the order
of their appearance.
Heading 6104, HTSUS, provides for among other things,
women's dresses. Accordingly, the subject knit dress is
classified in subheading 6104.43.2010, HTSUSA, which provides
for, women's or girls' suits, ensembles, suit-type jackets,
blazers, dresses, skirts, divided skirts, trousers, bib and brace
overalls, breeches and shorts (other than swimwear), knitted or
crocheted: dresses: of synthetic fibers: other: women's.
NAFTA Eligibility
The subject knit dress undergoes processing operations in
Mexico which is a country provided for under the North American
Free Trade Agreement (NAFTA). General Note 12, HTSUSA,
incorporates Article 401 of the North American Free Trade
Agreement (NAFTA) into the HTSUSA. Note 12(a) provides, in
pertinent part:
* * *
(ii) Goods that originate in the territory of a NAFTA party
under subdivision (b) of this note and that qualify to
be marked as goods of Mexico under the terms of the
marking rules... and are entered under a subheading for which a
rate of duty appears in the "Special" subcolumn followed by
the symbol "MX" in parentheses, are eligible for such duty
rate... . [Emphasis added]
Accordingly, the knit dress at issue will be eligible for the
"Special" "MX" rate of duty provided it is a NAFTA "originating"
good under General Note 12(b), Harmonized Tariff Schedule of the
Unites States Annotated (HTSUSA), and it qualifies to be marked
as a good of Mexico. Note 12(b) provides, in pertinent part,
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--
(i) they are goods wholly obtained or produced entirely in
the territory of Canada,
Mexico and/or the United States; or
(ii) 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
(iii) they are goods produced entirely in the territory
of Canada, Mexico and/or the United States exclusively
from originating materials; or
* * *
Accordingly, the subject knit dress qualifies for NAFTA
treatment only if the provisions of General Note 12(b)(ii)(A) are
met, that is, if the merchandise is transformed in the territory
of Mexico so that the non-originating material (the fabric formed
in Korea) undergoes a change in tariff classification as
described in subdivision (t).
As the knit dress is classifiable in subheading
6104.43.2010, HTSUSA, subdivision (t), Chapter 61, rule 20,
applies. That note states:
A change to subheadings 6104.41 through 6104.49 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
6002, 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.
When the fabric for the subject knit dress leaves Korea it
falls within headings 6001-6002, HTSUS. As headings 6001
through 6002 are excepted by subdivision (t), chapter 61, rule
20, the fabric does not meet the terms of the note. Accordingly,
the subject merchandise is not eligible for NAFTA treatment.
You inquire whether this merchandise is eligible for a
Tariff Preference Level (TPL). We have been advised by the
United States Trade Representative's Office that TPL's will be
the subject of a Federal Register Notice soon to be published by
that office. Accordingly, pending the publication of that
Notice, this office is not in a position to issue any responses
with respect to TPL's. We ask that you resubmit your request
once the Notice is published.
Country of origin
On September 5, 1995, Customs published in the Federal
Register (60 FR 46188) T.D. 95-69 which set forth final
amendments to the Customs Regulations to implement the provisions
of section 334 (b) of the Uruguay Round Agreements Act ("the
Act"), Public Law 103-465, 108 Stat. 4809, hereinafter 19 U.S.C.
3592, regarding the country of origin of textile and apparel
products. These final regulations will apply to goods entered,
or withdrawn from warehouse, for consumption on or after July 1,
1996. The regulatory provisions in T.D. 95-69 that implement the
basic origin principles of section 334(b) of the Act are
contained in a new 102.21 of the Customs Regulations (19 CFR
102.21).
The final rule for the rules for determining country of
origin of a good for purposes of Annex 311 of the NAFTA was
published by Customs on June 6, 1996, in the Federal Register (61
FR 28932). Therein it was stated, in pertinent part:
New 102.21 was modeled on the approach taken in the interim
Part 102 texts as published in T.D. 94-4 and thus
incorporates a general statement of applicability (paragraph
(a)), various definitions (paragraph (b)), general origin
rules (paragraphs (c) and (d)), and specific tariff shift
and/or other requirements (paragraph (e)) that apply under
the second general rule. Of particular note for purposes of
the present document is the definition of "textile or
apparel product" in 102.21(b)(5) which delineates the class
of goods covered by the 102.21 rules. That definition
identifies those goods with reference to classification in
the HTSUS and refers to Chapters 50 through 63 (that is, all
of Section XI) of the HTSUS as well as to specific headings
and 6-, 8- or 10-digit subheadings of the HTSUS that fall
outside Section XI. Thus, if a good is classifiable in an
HTSUS provision listed in 102.21(b)(5), precedence must be
given to the 102.21 rules over any other regulatory
provision with regard to that good, including any origin
rules contained elsewhere in part 102.
Accordingly, as the subject knit dress is classified in
heading 6104, HTSUS, a textile article identified by
102.21(b)(5), the 102.21 rules take precedence over any other
rules of origin to determine the appropriate country of origin.
Section 102.21(c)(1) states that, "The country of origin of
a textile or apparel product is the single country, territory, or
insular possession in which the good was wholly obtained or
produced". As the subject merchandise was not wholly obtained or
produced in a single country, territory, or insular possession,
Section 102.21(c)(1) is not applicable.
Section 102.21(c)(2) states that, "Where the country of
origin of a textile or apparel product cannot be determined under
paragraph (c)(1) of this section, the country of origin of the
good is the single country, territory, or insular possession in
which each foreign material incorporated in that good underwent
an applicable change in tariff classification, and/or met any
other requirement, specified for the good in paragraph (e) of
this section."
Section 102.21(e) states that, "The following rules shall
apply for purposes of determining the country of origin of a
textile or apparel product under paragraph (c)(2) of this
section":
6101-6117 If the good is not knit to shape and consists of
two or more component parts, a change to an
assembled good of heading 6101 through 6117 from
unassembled components, provided that the change
is the result of the good being wholly assembled
in a single country, territory, or insular
possession.
As the subject knit dress was wholly assembled in a single
country, that is Mexico, the terms of the tariff shift are met.
Accordingly, the country of origin of the subject merchandise is
Mexico.
HOLDING:
The subject knit dress is properly classified in subheading
6104.43.2010, HTSUSA, which provides for women's or girls' suits,
ensembles, suit-type jackets, blazers, dresses, skirts, divided
skirts, trousers, bib and brace overalls, breeches and shorts
(other than swimwear), knitted or crocheted: dresses: of
synthetic fibers: other: women's. The applicable rate of duty is
16.7 percent ad valorem and the quota category is 636.
The country of origin of the subject knit dress is Mexico.
The knit dress is not eligible for the NAFTA preference.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section 19 CFR
177.9(b)(1). This section states that a ruling letter is issued
on the assumption that all of the information furnished in the
ruling letter, either directly, by reference, or by implication,
is accurate and complete in every material respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished, this may affect the determination of
country of origin. Accordingly, if there is any change in the
facts submitted to Customs, it is recommended that a new ruling
request be submitted in accordance with 19 CFR 177.2.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division