CLA-2-OT:RR:NC:TA:N3:356
Mr. Mike Rizner
Augusta Sportswear
425 Park West Drive
Grovetown, GA 30813
RE: Classification and country of origin determination for men’s and boys’ knit jackets; Products of the West Bank, the Gaza Strip or a Qualifying Industrial Zone; General Note 3(a)(v); 19 CFR 102.21(c)(2); tariff shift.
Dear Mr. Rizner:
This is in reply to your letter dated April 21, 2008, requesting a classification and country of origin determination for men’s and boys’ knit jackets, Styles 4410 and 4411, that will be imported into the United States from Egypt. As requested, your sample garment will be returned.
FACTS:
Style 4410 “Double Knit Color Block Jacket” is a men’s jacket constructed from 92% polyester, 8% cotton, double knit fabric. Style 4410 features a self-fabric stand-up collar; a full front opening with a zippered closure; long, raglan sleeves with rib knit cuffs; side entry pockets below the waist; contrasting color inserts on the front panels extending from the shoulders to the pockets; and a tunnel elastic waistband covered with rib knit fabric. Style 4410 is in Men’s sizes S - 3XL. The same garment will be imported as Style 4411 in Boys’ sizes S - L.
You state that the manufacturing operations for the jackets will occur in China, Taiwan, and the Ismailia Public Free Zone (QIZ) in Egypt; the thread, elastic, polybags and cartons will be supplied from Israel; the zipper, hangtag, main label and care label will be supplied from Hong Kong; and the polybag and carton stickers will be supplied from the United Arab Emirates. After assembly, the garments will be exported directly from the QIZ to the United States.
The manufacturing operations for Styles 4410 and 4411 are as follows:
CHINA:
The fabric for the jacket body is knit.
TAIWAN:
The fabric for the rib knit waistband and cuffs is knit.
EGYPT (QIZ)
The fabric is cut into components, sewn and assembled into completed garments
The garments are finished and packed for export directly to the United States.
ISSUE:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for Style 4410 will be 6101.30.2010, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for: men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers, and similar articles, knitted or crocheted: other than those of heading 6103: of man-made fibers: other: other: men’s. The rate of duty is 28.2% ad valorem.
The applicable subheading for Style 4411 will be 6101.30.2020, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for: men’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including ski-jackets), windbreakers, and similar articles, knitted or crocheted: other than those of heading 6103: of man-made fibers: other: other: boys’. The rate of duty is 28.2% 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/.
Styles 4410 and 4411 fall within textile category designation 634. With the exception of certain products of China, quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries. The textile category number above applies to merchandise produced in non-WTO member-countries. Quota and visa requirements are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the “Textile Status Report for Absolute Quotas” which is available on our web site at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer you to the web site of the Office of Textiles and Apparel of the Department of Commerce 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.
Section 102.21, 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
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.
Paragraph (b) (6) defines “wholly assembled” as:
The term “wholly assembled” when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets) will not affect the status of a good as “wholly assembled” in a single country, territory, or insular possession.
The submitted garment is not knit to shape and consists of two or more component parts. As all of the assembly operations occur in Egypt, the garment is considered “wholly assembled” in a single country, that is, Egypt. As per the terms of the tariff shift requirement, country of origin is conferred in Egypt (QIZ).
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.
You state that the processing operations will be performed in the Ismailia Public Free Zone (QIZ) in Egypt. 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.”
Presidential Proclamation 6955 delegated to the United States Trade Representative the authority to designate qualifying industrial zones. See GN 3(a)(v)(G)(3), supra. The governments of Israel and Egypt jointly requested the designation as a qualifying industrial zone of areas comprising a Greater Cairo zone, Alexandria zone, Suez Canal zone and Central Delta zone. The names and locations of the factories comprising these four zones were specified on maps and materials submitted by Egypt and Israel and on file with the Office of the U.S. Trade Representative. For the purposes of this letter, we will assume that the QIZ you are using will meet the requirements of General Note 3(a)(v)(G), HTSUS.
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% 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.
You indicate in your letter that the garments will be imported directly from the QIZ to the United States. 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;
It cannot be ascertained whether the 35% value content requirement is met until the “appraised value” of the merchandise is determined at the time of entry into the United States.
HOLDING:
The country of origin of Styles 4410 and 4411 is Egypt (QIZ). Based upon international textile trade agreements, products of Egypt are not presently subject to visa requirements or quota restraints.
Based upon the information submitted, the garments will be considered a product of the Qualifying 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 Qualifying 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 section 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.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division