CLA-2-62:OT:RR:NC:N3:356
Mr. Juan Felipe Spataro
Quality Shirt Company S.A.
Primera Avenida, La Brigada 13 – 30 Guatemala 01057
Guatemala
RE: The tariff classification and status under the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA) of men’s dress shirts from Guatemala
Dear Mr. Spataro:
In your letter dated December 18, 2023, you requested a ruling on the classification and status under the DR-CAFTA of a men’s dress shirt from Guatemala. Your submitted samples will be retained in our office.
Style PERT003 is a men’s striped shirt constructed from 100% cotton woven fabric. Style PERT003 features a self-fabric spread collar; a left-over-right, full front opening with seven button closures; long, vented sleeves with two adjustable button closures on each cuff and one button closure on each vent; a patch pocket on the left chest; a back yoke; and a curved, hemmed bottom. A label sewn into the neckline of the shirt identifies its neck size in inches (the sample is marked “16”) and its sleeve length range in inches (the sample is marked “32-33”).
The applicable subheading for Style PERT003 will be 6205.20.2016, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: Men’s or boys’ shirts: Of cotton: Other: Dress shirts: With two or more colors in the warp and/or the filling: Men’s. The rate of duty will be 19.7 percent ad valorem.
Your request also concerns the eligibility of Style PERT003 for preferential tariff treatment under the DR-CAFTA.
The manufacturing operations are as follows:
Cotton fabric is woven outside the DR-CAFTA territory (primarily China, Colombia, and Thailand) and exported to Guatemala.
The thread used to sew the garment is produced in Colombia and exported to Guatemala.
In Guatemala, the fabric is cut, sewn, and assembled into the finished garment.
The completed garment is then packaged for retail sale in an individual polybag. The packaging also includes a chipboard, a cardboard strip inserted beneath and around the collar, a piece of plastic sheeting attached to the top button and inserted beneath the front collar; a strip of plastic sheeting around the inner collar; jet clips; pins; tissue paper; and a hang tag that identifies the brand.
The completed and packaged garments are exported directly from Guatemala to the United States.
General Note (GN) 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA.
GN 29(b), HTSUS (19 U.S.C. § 1202) states:
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 non-originating 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.
As the good contains non-originating materials, it must undergo the applicable change in tariff classification specified in GN 29(n) in order to meet the requirements of GN 29(b)(ii)(A).
For goods classified in subheading 6205.20, HTSUS, GN 29(n) includes two alternative rules of origin.
GN 29(n)/62.30A requires:
A change to dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve sizes stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett (sic) clips, individual polybags and hang tags ready for retail sale, of tariff item 6205.20.20 from any other chapter, provided that the good 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.
GN 29(n)/62.30B requires, in pertinent part:
A change to any other good of subheading 6205.20 from any other chapter, except from headings… 5204 through 5212… provided that the good 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.
In addition to meeting one of the two tariff shift rules noted above, the good must also satisfy any applicable chapter rules found in GN 29(n), Chapter 62. The chapter rules that apply to the subject good are 2 and 4.
GN 29(n), Chapter 62, Chapter rule 2 states, in pertinent part:
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 the rule for that good.
The component that determines the tariff classification of the subject good is the cotton woven fabric. Therefore, this fabric is the only component that must satisfy the tariff shift rule of either GN 29(n)/62.30A or GN 29(n)/62.30B.
GN 29(n), Chapter 62, Chapter rule 4 states, in pertinent part:
Notwithstanding chapter rule 2, a good of this chapter… other than—
(a)… 6205.20.20 (for dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve sizes stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett [sic] clips, individual polybags and hang tags ready for retail sale…
containing sewing thread of 5204, 5401 or 5508 or yarn of 5402 used as sewing thread shall be considered originating only if such sewing thread or yarn is both formed and finished in the territory of one or more of the parties to the Agreement.
As noted above, Style PERT003 is packaged ready for retail sale. Further, the packaging includes all items enumerated in GN 29(n)/62.30A, namely, a chipboard, pins, jet clips, an individual polybag, and a hang tag. Accordingly, GN 29(n)/62.30A may be used to determine the DR-CAFTA eligibility of the garment.
You state that Style PERT003 will be cut and sewn in Guatemala from fabric formed outside the DR-CAFTA territory. However, since this fabric is classifiable outside of Chapter 62, HTSUS, it satisfies the tariff shift requirement to 6205.20.20 set forth in GN 29(n)/62.30A.
You further state that the thread used to sew the garment will be produced in Colombia and exported to Guatemala under heading 5401. However, as noted above, GN 29(n)/62, Chapter rule 4 does not apply to “dress shirts for men, with two or more colors in the warp and/or the filling, each with collar and sleeve sizes stated in inches, without dual collar sizing, the foregoing individually packaged with chipboards, pins, jett [sic] clips, individual polybags and hang tags ready for retail sale.” Accordingly, this chapter rule may be disregarded when determining the DR-CAFTA eligibility of the subject garment.
Based on the facts provided, Style PERT003 qualifies for preferential tariff treatment under the DR-CAFTA because it meets the requirements of HTSUS, GN 29(b)(ii)(A). It 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 at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Maryalice Nowak at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division