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HQ 966592

July 22, 2003

CLA-2 RR:CR:TE 966592 SS


TARIFF NO.: 9820.11.24

Ms. Jacqueline Licor
Lufran International Corp.
2250 N.W. 96 Avenue, Suite 201
Miami, FL 33172

RE: Classification of Apparel Articles Made from Certain Corduroy Fabric; U.S.-Caribbean Basin Trade Partnership Act; Subheading 9820.11.24, HTSUS; “Short Supply” Provision

Dear Ms. Licor:

This is in response to your letter dated July 1, 2003, requesting a binding ruling on the eligibility of apparel articles made from certain corduroy fabric for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (CBTPA). You submitted a swatch of fabric for our examination.


The submitted sample is a swatch of 97 percent cotton/3 percent spandex corduroy fabric formed in China. The fabric is described as 21 wale weft stretch pigment dyed corduroy. It appears that the reference to “21 wale” means 21 wales per inch. Based on a visual examination of the fabric and using standard conversion factors, the fabric has 8.26 wales per centimeter.

1 inch = 2.54 centimeters Thus, the fabric is classified under subheading 5801.22.1000 which provides for “[w]oven pile fabrics and chenille fabrics, other than fabrics of heading 5802 or 5806: Of cotton: Cut corduroy: Greater than 7.5 wales per cm.”

You indicate that the fabric will be cut and assembled into apparel articles, such as pants, shirts and skirts, in Guatemala. You believe the proper classification of these apparel articles would be under subheading 9820.11.24 of the Harmonized Tariff Schedule of the United States (HTSUS).


Whether apparel articles made from the subject corduroy fabric are eligible for preferential tariff treatment under the CBTPA?


The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty-free and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)).

Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.

Guatemala is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351, dated October 2, 2000, 65 Fed. Reg. 59329) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).

The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§10.221 through 10.228 of the Customs Regulations (19 CFR 10.221 through 10.228).

We note that you referred to the instant fabric as “short supply fabric.” The provision commonly referred to as the “NAFTA short supply” provision is contained in subheading 9820.11.24, HTSUS. We wish to point out that there is no definitive list of “short supply” fabrics or yarns for purposes of the North American Free Trade Agreement (NAFTA). The determination of these short supply fabrics or yarns is based upon the various provisions of NAFTA and whether, under NAFTA, for the particular apparel article at issue, certain fabrics or yarns may be sourced from outside the NAFTA parties for use in the production of an “originating” good. If sourcing of certain fabrics or yarns outside the NAFTA parties is allowed, then those fabrics or yarns are deemed to be in “short supply.”

Subheading 9820.11.24, HTSUS, provides as follows:

Articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule: Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled in one or more such countries from fabrics or yarn not formed in the United States or in one or more such countries, provided that such apparel articles of such fabrics or yarn would be considered an originating good under the terms of general note 12(t) to the tariff schedule without regard to the source of the fabric or yarn if such apparel article had been imported from the territory of Canada or the territory of Mexico directly into the customs territory of the United States.

The fabric is formed in China and it is assumed that the yarns are not formed in the U.S. or a CBTPA beneficiary country. Thus, in order to determine whether the apparel articles are eligible for preferential treatment under the CBPTA, we must determine whether the apparel articles would be considered originating goods under General Note 12(t), HTSUS.

General Note 12(t), HTSUS, sets out the tariff shift rules for determining whether non-originating materials used in the production of a good have been transformed into originating goods under NAFTA. Prior to considering the tariff shift rules applicable to specific apparel articles, we examine the chapter notes to Chapter 62 contained in General Note 12(t), HTSUS. Chapter rule 2 to Chapter 62 of General note 12(t) states:

Apparel goods of this chapter shall be considered to originate if they are both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties and if the fabric of the outer shell, exclusive of collar or cuffs, is wholly of one or more of the following:

Corduroy fabrics of subheading 5801.22, containing 85 per cent or more by weight of cotton and containing more than 7.5 wales per centimeter.

Since the foreign fabric used in this case to make the outer shell of apparel articles is listed in the applicable subheading rule in GN 12(t), the apparel articles are eligible for duty-free treatment under subheading 9820.11.24, HTSUS, provided they are cut and assembled in Guatemala and they are imported directly to the U.S. from a CBTPA beneficiary country.


Assuming all the requirements of the subheading are satisfied, the apparel articles are classified under subheading 9820.11.24, HTSUS, and are eligible for duty free/quota free treatment provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country and all other documentary requirements are satisfied.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


Myles B. Harmon, Director

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