CLA-2-98:RR:NC:3:354
Ms. Sandra Tovar
CST, Inc.
500 Lanier Ave., W. Suite 901
Fayetteville, GA 30214
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of men’s garments from the Dominican Republic or Nicaragua; duty allowance under Harmonized Tariff Schedule of the United States, (HTSUS) 9802.00.8068.
Dear Ms. Tovar:
In your letter dated July 26, 2009, on behalf of McMurray Fabrics, Inc., you requested a tariff classification ruling.
Style 1201164 is a men’s long leg brief constructed of 87% polyester 13% elastane fabric. The brief, which reaches above the knee, features an uncovered elasticized waistband measuring approximately 1 ½ inches wide, with “Under Armour” and the company logo embroidered at regular intervals on the outer surface. A heat seal emblem of the company logo appears on the front of the right leg. The brief also features flatlock stitching at the seams and separately applied panels at the gusset crotch and at the front and back center of the garment.
Style 100382 is a men’s pullover garment constructed from 95% polyester, 5% elastane finely knit fabric that measures 29 stitches per two centimeters counted in the horizontal direction. The garment is cut and sewn and features a self-fabric crew neckband; short, hemmed, raglan sleeves; large heat seal decals on the left chest and on the upper rear panel below the neckband; and a straight, hemmed bottom.
Style 1201164 is classified in subheading 6212.90.0030, HTSUS, which provides for: Brassieres, girdles, corsets, braces, suspenders, garters and similar articles and parts thereof, whether or not knitted or crocheted: Other, Of man-made fibers." The rate of duty is 6.6 percent ad valorem.
The applicable subheading for Style100382 will be 6110.30.3053, HTSUS, which provides for: sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted: of man-made fibers: other: other: other: other: men’s or boys’: other. The rate of duty is 32% ad valorem.
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/.
Scenario 1:
The manufacturing operations for these garments are as follows:
The foreign fabric is imported into the U.S. the duties taxes and fees will be paid in the U.S.
In the U.S., the foreign fabric is cut-to-shape and exported to either the Dominican Republic or Nicaragua.
The 1 ½ inch elastic waistbands for the compression shorts will be manufactured in a nonoriginating country. The waistbands will be cut-to-length in the Dominican Republic or Nicaragua.
The sewing thread, used to assemble the components, is formed and finished in U.S.
In the Dominican Republic or Nicaragua, The cut-to-shape components are sewn and assembled into the finished garment and a heat transfer is applied after assembly. The ink used to produce the screen print is manufactured in the U.S.
The garments are packaged and exported directly from the Dominican Republic or Nicaragua to the U.S.
Scenario 2:
The manufacturing operations for these garments are as follows:
The foreign fabric is imported into the U.S. The duties taxes and fees will be paid in the U.S.
In the U.S., the foreign fabric is cut-to-shape and exported to either the Dominican Republic or Nicaragua.
The 1 ½ inch elastic waistbands for the compression shorts will be manufactured in the U.S. The waistbands will be cut-to-length in the Dominican Republic or Nicaragua.
The sewing thread, used to assemble the components, is formed and finished in U.S.
In the Dominican Republic or Nicaragua, the cut-to-shape components are sewn and assembled into the finished garment and a heat transfer is applied after assembly. The ink used to produce the screen print is manufactured in the U.S.
The garments are packaged and exported directly from the Dominican Republic or Nicaragua to the U.S.
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.
General Note 29 (n), Chapter 62, Chapter rule 2 states:
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 that rule for that good.
The component that determines the classification for the Style 1201164 is the man-made knit fabric. The polyester/elastane knit fabric is manufactured in a nonoriginating country and is classified in heading 6005, HTSUS.
GN 29 (n), Chapter 62, Chapter Rule 4 states:
Notwithstanding chapter rule 2 to this chapter, a good of this chapter containing sewing thread of headings 5204, 5401 or 5508 shall be considered originating only if such sewing thread is both formed and finished in the territory of one of more of the parties to the Agreement.
The sewing thread, used to assemble the components, is formed and finished in the U.S.
For Style 1201164, classified in subheading 6212.90, GN 29/62.40 requires:
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, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both sewn or otherwise assembled in the territory of one or more of the DR-CAFTA parties.
The polyester/elastane fabric does not meet the terms of the tariff shift rule. The good will be both sewn and assembled in the Dominican Republic or Nicaragua.
General Note 29 (n), Chapter 61, Chapter rule 2 states:
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 that rule for that good.
The component that determines the classification for the Style 100382 is the man-made knit fabric. The polyester/elastane knit fabric is manufactured in a nonoriginating country and is classified in heading 6006, HTSUS.
GN 29 (n), Chapter 61, Chapter Rule 4 states:
Notwithstanding chapter rule 2 to this chapter, a good of this chapter containing sewing thread of headings 5204, 5401 or 5508 shall be considered originating only if such sewing thread is both formed and finished in the territory of one of more of the parties to the Agreement.
The sewing thread, used to assemble the components, is formed and finished in the U.S.
For Style 100382, classified in subheading 6110, GN 29/61.25 requires:
A change to subheadings 6105 through 6111 from any other chapter, except from headings 5111 through 5113, 5204 through 5212, 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both sewn or otherwise assembled in the territory of one or more of the NAFTA parties.
The polyester/elastane fabric does not meet the terms of the tariff shift rule. The good will be both sewn and assembled in the Dominican Republic or Nicaragua.
Based on the facts provided, Styles 1201164 and 100382 does not qualify for DR-CAFTA preferential treatment, because they do not meet the requirements of HTSUS General Note 29(b)(ii)(A). The merchandise will therefore not be entitled to a free rate of duty under the DR-CAFTA upon compliance with all applicable laws, regulations, and agreements. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
You state that you believe the garments are properly classified under heading 9802.00.8068, HTSUS and would be eligible for a free rate of duty upon importation into the U.S.
Subheading 9802.00.80, HTSUS, provides:
Articles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating, and painting.
The garments are assembled abroad (Dominican Republic or Nicaragua) and contain components that are a product of the U.S. Based on the facts presented, it does not appear that there is any further fabrication, change in form, shape or otherwise and the components are not advanced in value or improved in condition except by being assembled and operations incidental to the assembly process. Based on the facts presented, the imported garments are eligible for a partial duty exemption under subheading 9802.00.80, HTSUS, provided the documentary requirements of 19 CFR 10.24 are satisfied or waived by the port. Styles 1201164 and 100382 would not, however, be entitled to a free rate of duty because the merchandise does not qualify for DR-CAFTA preferential treatment.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
If you have any questions regarding the ruling for subheading 6212.90.0030, HTSUS, please contact National Import Specialist Robert Ivers at (646) 733-3054. If you have any questions regarding the ruling for subheading 6110.30.3050, contact National Import Specialist Mary Ryan at (646) 733-3271. If you have any questions regarding eligibility for preferential treatment under DR-CAFTA, contact National Import Specialist Rosemarie Hayward at (646) 733-3064.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division