CLA-2-61:OT:RR:E:NC:N3:354
Mr. Robert Stack
Tompkins & Davison, LLP
5 Hanover Square
15th Floor
New York, NY 10004
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA), of ladies’ sweater from El Salvador.
Dear Mr. Stack:
In your letter dated May 28, 2013, on behalf of your client, Macy’s Merchandising Group, Inc., you requested a ruling on the status of ladies’ sweaters from Guatemala under the DR-CAFTA.
The submitted sample, Style D9750AF13, is a woman’s “Live Love Dream™” label cut and sewn sweater that is constructed from 56% polyester, 41% rayon, and 3% spandex finely knit jersey fabric. The outer surface of the garment measures nine or fewer stitches per two centimeters in the direction the stitches were formed. The garment features long raglan sleeves with self-fabric cuffs, a round neckline with self-fabric edging, and a self-fabric banded bottom with a heart shaped heat seal. The garment extends to below the waist.
The applicable subheading for Style D9750AF13 will be 6110.30.3020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted (con): Of man-made fibers (con): other: other: sweaters: women’s. The duty rate will be 32% ad valorem.
The manufacturing operations are as follows:
The polyester/rayon/spandex fabric, for the body of the garment, is manufactured in U.S. from non-originating yarns.
The polyester twill neck tape is produced in China or another non-participating country from non-originating yarns.
The polyester twill ribbon fabric, for the hanger loops, is manufactured in China or another non-participating country from non-originating yarns.
The sewing thread is manufactured in U.S. from U.S. yarns.
The fabrics are cut, sewn and assembled in Guatemala.
The heart shaped plastic applique is produced in China or another non-participating country.
The garment is exported directly from El Salvador 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.
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)/61.25, 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.
The sweater, however, may be subject to a reduced rate of duty based upon the provisions of subheading 9822.05.10, subchapter XXII of the HTSUS. U.S. Note 22 to that chapter states:
For a textile or apparel good provided for in chapters 61 through 63 of the tariff schedule that is not an originating good under general note 29 and for which the duty treatment set forth in heading 9822.05.10 is claimed, the rate of duty set forth in the general subcolumn of rate of duty column 1 shall apply only on the value of the assembled good minus the value of fabrics formed in the United States, components knit-to-shape in the United States and any other materials of U.S. origin used in the production of such a good, provided that the good is sewn or otherwise assembled in the territory of a party to the Agreement (other than the United States) specified in general note 29(a) with thread wholly formed in the United States, from fabrics wholly formed in the United States and cut in one or more parties to the Agreement (other than the United States) as defined in general note 29(a) or from components knit-to-shape in the United States, or both. For purposes of this note-
a fabric is wholly formed in the United States if all the production processes and finishing operations, starting with the weaving, knitting, needling, tufting, felting, entangling or other process, and ending with a fabric ready for cutting or assembly without further processing, took place in the United States; and
a thread is wholly formed in the United States if all the production processes, starting with the extrusion of filaments, strips, film or sheet, and including slitting a film or sheet into strip, or the spinning of all fibers into thread, or both, and ending with thread, took place in the United States.
The sweater is cut and assembled, as well as sewn in Guatemala, using fabric for the main body of the garment is wholly formed in the U.S., using thread is wholly formed in the U.S, and the finished sweater is classified in chapter 61. In this regard, the sweater may be eligible under 9822.05.10, HTSUS.
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 classification contact National Import Specialist 359 at 646-733-3049. If you have any questions regarding DR-CAFTA eligibility contact National Import Specialist Rosemarie Hayward at 646-733-3064.
Sincerely,
Thomas J. Russo
Director
National Commodity Specialist Division