CLA-2-RR:NC:TA:361 K86111
Mr. Thomas G. Travis
Sandler, Travis & Rosenberg, P.A.
Attorneys at Law
The Waterford-5200 Blue Lagoon Drive
Miami, FL 33126
RE: Classification and country of origin determination for a woman’s knit pants; Duty-Free treatment for products of the West Bank, Gaza Strip, or a Qualifying Industrial Zone; General Note 3(a)(v); 19 C.F.R. §102.21(c)(4); T.D. 98-62
Dear Mr. Travis:
This is in reply to your letter dated May 12, 2004, submitted on behalf of your client Union Capital International. Your request concerns the classification, country of origin determination and eligibility for preferential duty treatment for a garment that may be produced, in part, in a Qualifying Industrial Zone (QIZ). As you requested, the submitted garment, partially assembled garment, and garment components will be returned to you under separate cover.
FACTS:
The pants, style DF-239, are constructed from 95 percent cotton, five-percent spandex terry knit fabric. The pants have an elasticized waistband with a drawstring, side seam pockets, six-inch side vents at the bottom of each leg with zipper closures, and hemmed leg openings.
The pants are made from the following components: two front panels, two rear panels, a waistband component, two pocket components, and two zippers.
You have indicated that the garment will be produced in two countries, China and Jordan, however, as the countries may change, you have asked that the operations be ascribed to “Country A” and “Country B.” The manufacturing operations for the pants are as follows:
Country A - China
Cut fabric into components
Form the waistband with eyelets, buttons, and elastic
Sew side pockets to front pocket panels
Topstitch the faux fly at front rise
Country B - Jordan
Join front and back rises
Join the inseams
Join the side seams
Fold the bottom hem
Sew vents with zippers
Join waistband and labels to body
Thread drawstring with brass button into waistband
ISSUE:
What are the classification, country of origin and status under the US-Israel Free Trade Agreement of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the pants, style DF-239, will be 6104.62.2006, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Women’s…trousers…knitted or crocheted: Of cotton: containing five percent or more by weight of elastomeric yarn or rubber thread. The general rate of duty is 14.9% ad valorem.
The pants fall within textile category designation 348. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the U.S. Customs Service Textile Status Report, an internal issuance of the U.S. Customs Service, which is available at the Customs Web Site at WWW.CBP.GOV. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment.
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.
The U.S. Trade Representative, the Governments of Jordan and Israel requested the designation of the industrial zone in Al Kerak Industrial Estate, Jordan, as a QIZ. Pursuant to subsequent consultations among the three Governments, the Governments of Israel and Jordan entered into a written agreement dated November 16, 1997, relating to the establishment of the Al-Kerak Industrial Estate QIZ, which included the following provision, entitled “Rules of Origin”:
The[Governments of Israel and Jordan] agree that the origin of any textile
or apparel product that is processed in the Al-Kerak Industrial Estate QIZ, regardless of the origin or place of processing of any of its inputs or materials prior to entry into, or subsequent withdrawal from, the zone, will be determined solely pursuant to the rules of origin for textile and apparel products set out in Section 334 of Uruguay Rounds Act, 19 U.S.C. §3592.
General Note 3(a)(v)(G), HTS, 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.” By notice published in the Federal register on March 13, 1998 (63 FR 12572) the Office of the U.S. Trade Representative formally designated the Israeli-Jordanian Al-Kerak Industrial Estate Qualifying Industrial Zone as a QIZ.
Treasury Decision 98-62 dated July 13, 1998, determined that pursuant to the agreement between the Governments of Israel and Jordan, and by mutual consent of the U.S. and Israel, Customs will exclusively apply the textile and apparel rules of origin set forth in 19 C.F.R. §102.21 in determining the country of origin of a textile or apparel product processed in the Al-Kerak Industrial Estate QIZ.
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.
If the good is not knit to shape and does not consist of two or more component parts, a change to heading 6101 through 6117 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5806, 5809 through 5811, 5903, 5906 through 5907, and 6001 through 6002, and subheading 6307.90, and provided that the change is the result of a fabric-making process.
If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.
The subject garments will be classified within the above noted range, in heading 6104. The garment consists of two or more components. The terms of the tariff shift are not met, as the garment is not wholly assembled in a single country.
Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.
As the subject merchandise is neither knit to shape, nor wholly assembled in a single country, Section 102.21 (c)(3) is inapplicable.
Section 102.21 (c)(4) states, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred".
The most important assembly operations occur where the front and back rises are joined; the inseams are joined; the side seams are joined; the zippers are sewn onto the side vents; and the waistband is attached to the body. Accordingly, the country of origin is country B, Jordan, the country in which these operations occur.
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, 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.
Under General Note 3(a)(v), HTSUS, articles the products of the West Bank, Gaza Strip or a qualifying industrial zone which are imported directly to the U.S. from the West Bank, Gaza Strip, a qualifying industrial zone 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, a qualifying industrial zone or Israel, plus 2) the direct costs of processing operations performed in the West Bank, Gaza Strip, a qualifying industrial zone or Israel, is not less than 35% of the appraised value of such articles when imported into the U.S. An article is considered to be a product of the West Bank, Gaza Strip or a qualifying industrial zone 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.
Based upon the above production information, the pants meet the country of origin requirements in the West Bank, Gaza Strip or a qualifying industrial zone, specifically, in Jordan, in the Al Kerak Industrial Estate QIZ, under the applicable rules of origin for textiles, it would be considered a product of the West Bank, Gaza Strip or a qualifying industrial zone, specifically Jordan.
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 West Bank, the Gaza Strip, a qualifying industrial zone or Israel into the United States with out passing through the territory of any intermediate country;
Based upon the facts presented, it appears that the garments will satisfy this requirement.
We are unable to state definitively that the garments will or will not satisfy the 35% value content requirement. Whether the requirement is satisfied can only be ascertained when the "appraised value" of the garments is determined at the time of entry into the United States.
HOLDING:
Based on the information provided, the pants will be considered a product of Country B. If Country B is the Al Kerak Industrial Estate in Jordan, the pants will be considered to be products of the West Bank or Gaza Strip or qualifying industrial zone, and will be eligible for preferential duty treatment under General Note 3(a)(v), HTSUS, assuming that they are imported directly from the West Bank, Gaza Strip, or Israel, and the 35 percent value content requirement is satisfied. Again, whether the 35% value content requirement will be met must await actual entry of the merchandise.
The country of origin of the pants is Country B. Based upon international textile trade agreements products of Jordan currently are not subject to quota and the requirement of a visa. However, if other than Jordan, based upon international textile trade agreements these products may be subject to quota and the requirement of a visa.
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 C.F.R. §177.9(b)(1). This sections 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 C.F.R. §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 C.F.R. §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 Angela De Gaetano at 646-733-3052.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division