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HQ 959398

September 13, 1998

CLA-2 RR:CR:TE 959398 RH


TARIFF NO.: 6110.30.3020

Area Port Director
U.S. Customs
1000 Second Street
Suite 2100
Seattle, Washington 98104-1049

RE: Protest number 3001-96-100385; country of origin; knit sweaters; production capacity;
19 CFR ?174.24(b); question of fact

Dear Sir:

This is in reply to a memorandum received by our office on June 25, 1996, concerning the Application for Further Review of Protest (AFR) number 3001-96-100385, which you forwarded to our office for review. The law firm of Riggle and Craven timely filed the AFR, on behalf of A.J. Brandon, against a Notice of Redelivery of acrylic/nylon sweaters.

Counsel claims that review is warranted under 19 CFR ?174.24(b), because neither the Commissioner of Customs nor the Customs courts has ruled on the nature of machinery necessary to produce minimal cabling of sweaters.


On September 14, 1995, the protestant imported into the United States 600 dozen women's man-made knit sweaters (80/20 percent acrylic/nylon ladies pullover long sleeve, diamond and cable stitch on front and reverse jersey back and sleeves) under subheading 6110.30.3020 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The protestant asserted the Republic of the Phillippines as the country of origin of the garments.

Commercial invoice DA95-046 and other supporting entry documents establish that the foreign seller of the sweaters was Dae Young Apparel Corporation and that the sweater materials originated in Seoul, Korea, and were processed and/or manufactured into garments in the Phillippines.

On January 18, 1996, Customs issued a Request for Information (CF 28), asking the protestant to submit samples of the merchandise. To our knowledge, the samples were never received. In the meantime, Customs conducted a visit to the Dae Young factory in the Phillippines and determined that it did not have the necessary equipment to produce the cable knit sweaters. Additionally, Customs obtained records of cabled panels being shipped to the Dae Young factory from outside the country. This was confirmed by the plant manager to Customs officials.

On February 23, 1996, Customs sent a Notice to Redeliver (CF 4647), which reads: "Based on information developed by U.S. Customs this merchandise was incapable of being made at the stated factory and is suspected of being transshipped. Please redeliver or provide the name of the actual manufacturer and supporting documentation."

Counsel for the protestant argues that the Dae Young factory was capable of producing the sweaters in question, that cabling of the type on the sweaters in question is not a complex operation, and that Dae Young had both the machinery and personnel to do such cabling. He asserts that the notice of redelivery was issued in error and should be canceled. He submitted a video tape directly to our office of the machinery allegedly at the Dae Young factory.

In support of his claim that Dae Young had both the machinery and personnel to manufacture the sweaters, counsel states that the protestant's former director of sourcing visited the Dae Young factory and determined that it was capable of producing the sweaters. During the visit, Dae Young informed the protestant's representative that it was capable of producing 80,000 knit sweaters per month. Counsel attached copies of a factory profile created by Dae Young detailing the machines and manpower of the factory.

On April 29, 1996, Customs sent another Request for Information to the importer requesting the following documentation:

1) A Certification from the Philippine Garment Textile Export Board (GTEB) that all of the equipment listed in appendix 2 of your attorney's letter is in fact at the factory and is in use.

2) Production records for the shipment in question, including the following:

--Philippine import entry and internal revenue declaration for the Korean raw materials

--Invoice and bill of lading for the raw materials

--Production records

--Certificate of Inspection and Loading

--Certificate of Identification

3) Documentation showing when the flat knitting machines were added to the factory.

4) Certification from GTEB as to how the flat knitting machines are powered (manual, electric, etc.)

5) If knitting of the panels was subcontracted, which manufacturer produced the panels and what type of machine was used to produce them.

The information was not submitted.


The sole issue in this case is a question of fact - Has the protestant submitted evidence to prove that it had the capacity to produce the garments under protest in the Philippines and did, indeed, do so?


The statutory authority for applications for further review is found in 19 U.S.C. ?1515(a) which provides that, upon application by the protestant, a protest may be subject to further review under the circumstances and in the form and manner prescribed by the Secretary in regulations. The Customs Regulations issued under this provision are found in 19 CFR ??174.23 - 174.27. Section 174.24(b) sets out one of the criteria for further review, i.e., an allegation that the decision protested involves questions of law or fact which have not been ruled upon by the Commissioner or his designee or by the Customs courts. Section 174.25 provides for the contents required in an application for further review, including "[a] statement of any facts or additional legal arguments, not part of the record, upon which the protesting party relies, including the criterion set forth in 174.24 which justifies further review."

Upon receipt of the protest, our office asked counsel to submit the documentation listed above. Counsel did not submit the documentation and stated that the protestant is no longer in the business of importing textiles and has closed its corporate office. He additionally stated that the individuals involved with the importations at issue were no longer associated with the protestant, and that it was not possible to provide additional information.

As stated in the factual portion of this ruling, Customs visited the foreign manufacturer (Dae Young) and determined that there was insufficient equipment located in the factory to produce the garments under protest. This information was confirmed by the foreign manufacturer's plant manager. In addition, Customs learned that the foreign manufacturer's sales are made through Chongwoo Trading Co., Ltd., who supplies raw materials to Dae Young. Customs also obtained an invoice from Chongwoo Trading Co., Ltd., dated July 13, 1995, listing, among other items, 5,826 sets of hand flat knitting sweater panels delivered to Dae Young.

Based on the foregoing evidence, and in light of the fact that the protestant failed to submit any documentation to substantiate its claims, we find that the protest is without merit. Moreover, we will not address whether the machines shown in the video tape submitted by counsel are capable of producing the sweaters in question, since Customs determined that the machinery was not at the plant at the time of its visit.


The protestant did not submit evidence to prove that the foreign manufacturer had the capacity to produce the garments under protest in the Philippines. Accordingly, the protest should be denied.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to the mailing of this decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.


John Durant, Director

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