CLA-2-61:OT:RR:NC:TA:348
Jason M. Waite
Alston & Bird LLP
950 F Street, NW
Washington, DC 20004
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of women’s coat from Dominican Republic.
Dear Mr. Waite:
In your letter dated December 17, 2008 on behalf of your client, Herman Kay you requested a ruling on the status of a women’s coat from Dominican Republic under the DR-CAFTA.
The sample provided, Style LF12035LL, is a women’s coat and woven scarf. The coat is made from 80% wool and 20% nylon woven fabric shell with a woven 100% polyester lining. The coat, which has a center back length of approximately thirty-one inches, has a full front opening with a four-button, right-over-left closure, a pointed collar, pockets at the waist, a hemmed bottom and long hemmed sleeves with button tabs at the wrist. The contrasting color woven scarf is made of 100% acrylic and will be swift tacked to each coat. The scarf is of a type that may be marketed separately; therefore the scarf and coat are considered a set under GRI3. The coat and scarf are being returned as requested.
The applicable tariff provision for the coat and scarf set will be 6202.11.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for women’s overcoats, carcoats, capes, cloaks and similar coats: of wool or fine animal hair. The general rate of duty will be 41¢/kg + 16.3 percent ad valorem.
The manufacturing operations are as follows:
The nonoriginating fabric, for the coat, is composed of 80% wool and 20% nylon. The fabric weighs 482 g/m2 and has been brushed. The fabric will be classified as 5111.30.9000.
The nonoriginating fabric, for the coat, is cut and assembled into the finished garment in the Dominican Republic.
The nonoriginating scarves are manufactured in China and are imported into Dominican Republic. The scarves are swift tacked to each coat.
The coat and scarf set is then shipped directly from Dominican Republic to the United States.
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if—
(i)the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement;
(ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note; and the good satisfies all other applicable requirements of this note; or
(iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials.
The merchandise does not qualify for preferential treatment under DR-CAFTA because (a) it will not be wholly obtained or produced entirely in the territory of one or more DR-CAFTA countries; (b) one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 29(n)/62.01, HTSUS; and (c) it will not be produced entirely in the territory of one or more of the DR-CAFTA parties exclusively from originating materials. You have suggested that the garments may be subject to a reduced rate of duty classified under 9822.05.01.
General Note 29(m)(viii)(B) states:
An apparel good of chapter 61 or 62 of the tariff schedule and imported under heading 9822.05.01 of the tariff schedule shall be considered originating if it 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, and if the fabric of the outer shell, exclusive of collars and cuffs where applicable, is wholly of—
(1) one or more fabrics listed in U.S. note 20 to subchapter XXII of chapter 98; or
(2) one or more fabrics formed in the territory of one or more of the parties to the Agreement from one or more of the yarns listed in U.S. note 20 to such subchapter XXII; or
(3) any combination of the fabrics referred to in subdivision (B)(1), the fabrics referred to in subdivision (B)(2) or one or more fabrics originating under this note.
The originating fabrics referred to in subdivision (B)(3) may contain up to 10 percent by weight of fibers or yarns that do not undergo an applicable change in tariff classification set out in subdivision (n) of this note. Any elastomeric yarn contained in a fabric referred
Chapter 98, subchapter XXII of the HTSUS U.S. Note 20(a) to that chapter states in pertinent part, that:
Heading 9822.05.01 shall apply to textile or apparel goods of chapters 50 through 63 and subheading 9404.90 that contain any of the fabrics, yarns or fibers set forth herein, are described in general note 29 to the tariff schedule and otherwise meet the requirements of such general note 29.
Within that note, (71) provides:
Any other fabric, yarn or fiber that the Committee for Implementation of Textile Agreements (CITA) determines in a notice published in the Federal Register on or after March 1, 2006, is not available in commercial quantities in a timely manner in the territories of the parties to the Agreement, as defined in general note 29(a), subject to any quantitative limitations that CITA may establish for the fabric, yarn or fiber.
On February 21, 2008, CITA published a notice in the Federal Register (73 FR 9545) determined that certain wool blend coating fabrics, as specified below, are not available in commercial quantities in a timely manner in the CAFTA-DR countries. This product was added to the list in Annex 3.25 of the CAFTA-DR Agreement in unrestricted quantities.
HTSUS Classifications: 5111.30.9000, 5515.13.0510, 5515.22.0510, 5515.99.0510, 5516.32.0510, 5516.33.0510 Fiber Content: 20 percent of more of man-made staple fibers and 36 to 80 percent of wool, cashmere or camelhair fiber (or any combination thereof), with a three percent fiber content allowance. Yarn Size: Various Fabric Weight: 17 to 23 ounces (482 to 652 grams) Colors: Various Finishing: Carbonized, fulled, dried, dyed, brushed, sheared, vaporized, rolled
Based on the facts provided, the garment described may qualify for DR-CAFTA preferential treatment because the fabric of the outer shell meets the requirements of HTSUS General Note 29(m)(viii)(B)(1). However, since the coat and scarf are considered a set, the set must also meet the requirements of GN 29 (c)(v) to be eligible for preferential treatment under DR-CAFTA.
HTSUS General Note 29(c)(v) states, Notwithstanding the rules set forth in subdivision (n) of this note, goods classifiable as goods put up in sets for retail sale as provided under general rule of interpretation 3 to the tariff schedule shall not be considered to be originating goods unless—
each of the goods in the set is an originating good; or
the total value of the nonoriginating goods in the set does not exceed—
in the case of a textile of apparel good, 10 percent of the adjusted value of the set; or
in the case of a good, other than a textile or apparel good, 15 percent of the adjusted value of the set.
Since, the coat and scarf are considered a set, the value of the non-originating scarf may not exceed 10 percent of the adjusted value of the set. You state the value of the non-originating scarf is 8 percent of the value of the coat and scarf set. Based on the information provided, the garment described above, does qualify for DR-CAFTA preferential treatment. The garments will therefore be entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 Rosemarie Hayward at (646) 733-3064.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division