Ms. Hannah Chan
Business Faith International Limited
A8 & A13 7/F, Block A
Hong Kong Industrial Centre
No. 489-491, Castle Peak Road
Kowloon, Hong Kong
RE: Classification and country of origin determination for men’s woven pants; Products of the West Bank, the Gaza Strip or a qualifying industrial zone; General Note 3(a)(v); 19 CFR 102.21(c)(4); most important assembly; T.D. 98-62.
Dear Ms. Chan:
This is in reply to your letter dated November 26, 2004, concerning a classification and country of origin determination for men’s woven pants that will be imported into the United States. You state that the manufacturing operations will occur in China and the Irbid al-Hassan Industrial Estate (QIZ), Jordan. You have provided a sample of the partially assembled garment as it leaves China and a sample of the finished garment as it will be imported from the QIZ into the United States. Your samples will be returned, as requested.
The submitted sample, Style number 831, “Flat Front Expandable Waist Pants,” is a pair of men’s pants constructed from 55% cotton, 45% polyester woven fabric. The garment has an expandable waistband with seven belt loops, a fly front opening with a zipper closure, a button on the waistband, two front quarter pockets, two rear welt pockets with button closures, and hemmed legs. You state that the style number for this garment may change for each individual order placed for different shipments.
The manufacturing operations for the submitted sample are as follows:
- The fabric is cut into component parts
- The waistband is formed with button attached
- The left fly is formed and the left fly and zipper are attached to the left front panel
- The front pockets and pocket facings are formed and attached
- The darts above the rear welt pockets are made
- The rear pockets and pocket facings are formed and attached
- The buttonholes are made and the buttons are attached to the rear pockets
- The back rise is sewn
- The outseams are sewn and the labels are attached
- The waistband and belt loops are attached
IRBID QIZ, JORDAN
- The right fly is attached at the waistband
- The front rise is sewn joining the front panels and attaching the zipper
- The country of origin and content labels are attached
- The inseam is joined
- The legs are hemmed
- The garment is trimmed, inspected, and packed for export directly to the United States
What are the classification and country of origin of the subject merchandise?
The applicable subheading for the garment is in 6203.42.4015, Harmonized Tariff Schedule of the United States, (HTS), which provides for: men’s or boys’ trousers . . ., of cotton: other: other: trousers and breeches: men's: other. The general rate of duty is 16.6% ad valorem.
The garment falls within textile category designation 347. Quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information as to whether quota and visa requirements apply to this merchandise, we suggest that you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” available at our web site at www.cpb.gov. In addition, you will find current information on textile import quotas, textile safeguard actions and related issues at the web site of the Office of Textiles and Apparel, at otexa.ita.doc.gov.
COUNTRY OF ORIGIN - LAW AND ANALYSIS:
Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by Section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.
You state that the processing operations in Jordan are performed in the Irbid Qualifying Industrial Zone (QIZ). General Note 3(a)(v)(G), HTSUS, defines a “qualifying industrial zone” as any area that:”(1) encompasses portions of the territory of Israel and Jordan or Israel and Egypt; (2) has been designated by local authorities as an enclave where merchandise may enter without payment of duty or excise taxes; and (3) has been designated by the U.S. Trade representative in a notice published in the Federal Register as a qualifying industrial zone.”
By letters dated June 30, 1997 and July 1, 1997, to the U.S. Trade Representative, the Governments of Jordan and Israel, respectively, requested the designation of the industrial zone in Irbid, Jordan, as a QIZ. Pursuant to subsequent consultations among the three Governments, the Governments of Israel and Jordan entered into a written agreement dated November 16, 1997, relating to the establishment of the Irbid QIZ, which included the following provision, entitled “Rules of Origin”:
The [Governments of Israel and Jordan] agree that the origin of any textile or apparel product that is processed in the Irbid Qualifying Zone, regardless of the origin or place of processing of any of its inputs or materials prior to entry into, or subsequent withdrawal from, the zone, will be determined solely pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay Rounds Act, 19 U.S.C.§ 3592.
By notice published in the Federal Register on March 13, 1998 (63 FR 12572), the Office of the U.S. Trade Representative formally designated the Israeli-Jordanian Irbid Qualifying Industrial Zone as a QIZ. Treasury Decision 98-62, published in the Federal Register on June 26, 1998 (63 FR 34960), determined that pursuant to the agreement between the Governments of Israel and Jordan, and by mutual consent of the U.S. and Israel, Customs will exclusively apply the textile and apparel rules of origin set forth in 19 C.F.R. §102.21 in determining the country of origin of a textile or apparel product processed in the Irbid QIZ.
Paragraph (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 is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (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 of the foreign materials 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."
Paragraph (e) in pertinent part 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":
HTSUS Tariff shift and/or other requirements
6201-6208 If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.
Although the garment consists of two or more component parts, it is not wholly assembled in a single country, territory or insular possession. Accordingly, as the terms of the tariff shift are not met, Section 102.21 (c)(2) is inapplicable.
Section 102.21 (c)(3) states that, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section”:
If the good was knit to shape, the country of origin of the good is the single country, territory or insular possession in which the good was knit; or
Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory or insular possession, the country of origin of the good is the country, territory or insular possession in which the good was wholly assembled.
Since the garment is neither knit nor wholly assembled in a single country, Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred.”
In the case of the subject merchandise, the assembly processes in Jordan which consist of sewing the front rise to join the front panels and attach the zipper, and sewing the inseams constitute the most important assembly processes.
Accordingly, under Section 102.21 (c)(4), the country of origin of the submitted garment is Jordan, the country in which the most important assembly processes occur.
STATUS UNDER THE UNITED STATES - ISRAEL FREE TRADE AGREEMENT:
Pursuant to the authority conferred by section 9 of the U.S. - Israel Free Trade Area Implementation Act of 1985 (19 U.S.C § 2112 note), the President issued Proclamation No. 6955 dated November 13, 1996 (published in the Federal Register on November 18, 1996 (61 Fed. Reg. 58761)), which modified the Harmonized Tariff Schedule of the United States (HTSUS) (by creating a new General Note 3 (a)(v)) to provide duty-free treatment to articles which are the product of the West Bank, Gaza Strip or a qualifying industrial zone (QIZ), provided certain requirements are met. Such treatment was effective for products of the West Bank, Gaza Strip or a qualifying industrial zone entered or withdrawn from warehouse for consumption on or after November 21, 1996.
Under General Note 3 (a)(v), HTSUS, articles the products of the West Bank, Gaza Strip or a QIZ which are imported directly to the United States from the West Bank, Gaza Strip, a QIZ or Israel, qualify for duty-free treatment, provided the sum of (1) the cost or value of materials produced in the West Bank, Gaza Strip, or QIZ or Israel, plus (2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a QIZ or Israel, is not less than 35 percent of the appraised value of such articles when imported into the United States. An article is considered to be a product of the West Bank, Gaza Strip, or a QIZ if it is either wholly the growth, product or manufacture of one of those areas or a new and different article of commerce that has been grown, produced or manufactured in one of those areas.
With respect to the requirement that the articles be imported directly, General Note 3(a)(v) (B)(1) provides that: Articles are “imported directly” for purposes of this paragraph if: (1) they are shipped directly from the West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States without passing through the territory of any intermediate country.
Regarding the 35% value requirement, it cannot be ascertained whether the 35% value requirement is met until the “appraised value” of the merchandise is determined at the time of entry into the United States.
The country of origin of the submitted garment is Jordan. Based upon international textile trade agreements, products of Jordan are not presently subject to visa requirements or quota restraints.
Based upon the information submitted, the garments will be considered a product of the Qualified Industrial Zone and will be eligible for preferential duty treatment under General Note 3 (a)(v), HTSUS, assuming that the garments are imported directly from the Qualified Industrial Zone to the United States and the 35% value content requirement is satisfied. A determination will be made at the time of entry of the merchandise into the United States, whether the above requirements are met.
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 sections states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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.
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mary Ryan at 646-733-3271.
Robert B. Swierupski