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NY J85894





July 2, 2003

CLA-2-RR:NC:WA:355 J85894

CATEGORY: CLASSIFICATION

Alan R. Klestadt
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 245 Park Avenue, 33rd Floor
New York, NY 10167-3397

RE: Classification and country of origin determination for a man’s woven pant; 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. Klestadt:

This is in reply to your letter dated June 26, 2003, submitted on behalf of your client , Falcon Jordanian International Garment Industries, Inc. Your request concerns the country of origin determination and eligibility for preferential duty treatment for a man’s pant, a product of a Qualifying Industrial Zone (QIZ) which will be imported directly into the United States from the QIZ.

FACTS:

The garment, style BB1261, is a man’s pant made of 70% rayon, 30% polyester woven fabric. The garment features a zippered fly front with a left over right button closure at the waistband, eight belt loops, pleated front panels, two side seam pockets, two back welt pockets with buttons, and cuffed pant legs.

The manufacturing operations for the pants are as follows:

CHINA:

The fabric is woven
The fabric is cut into component parts
The front and back panels are made
The front and back pockets are sewn and attached to the front and back panels The front fly is sewn to the both front panels and the zipper is attached on the left front fly (but the front rise is not formed) The right and left back panels are joined and the back rise is formed The front and back panels are joined (the side seams are closed) The waistband and belt loops are made and attached

IRBID, QIZ:

The zipper is attached at the right front fly The two front panels are joined at the front rise (the front rise is formed) The inseams of the front and back panels are sewn The front fly is bar-tacked
The care and country of origin label is attached The leg bottoms are hemmed
Buttons are attached
Trimming is performed

ISSUE:

What are the classification, country of origin and status of the subject merchandise under the US-Israel Free Trade Agreement?

CLASSIFICATION:

The applicable subheading for the pant will be 6203.49.2015, Harmonized Tariff Schedule of the United States (HTS), which provides for men’s or boys’ trousers, bib and brace overalls, breeches and shorts, of other textile materials, of artificial fibers, trousers, breeches and shorts, other, other, trousers and breeches, men’s. The rate of duty will be 28.1% ad valorem.

The pant falls within textile category designation 647. 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.CUSTOMS.TREAS.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:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. §3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by 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 Irbid, 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 Irbid QIZ which included the following provision, entitled “Rules of Origin”:

“The [Governments of Israel and Jordan] agreed that the origin of any textile or apparel product that is processed in the Irbid Qualifying Zone, 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 the 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 Irbid 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 Irbid 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

6201 – 6208 If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession.

Section 102.21(e) states that the good must be completely assembled in a single country, territory or insular possession. Accordingly, as the subject merchandise does not meet this requirement, Section 102.21(c)(2) is inapplicable.

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, 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".

In the case of the subject merchandise, attaching the zipper to the right front fly, the joining of the front panels forming the front rise, sewing the inseams, and hemming the leg bottoms, constitute the most important assembly processes. Accordingly, the country of origin of the garment is Jordan.

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 QIZ 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 QIZ which are imported directly to the U.S. 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, a 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 percent of the appraised value of such articles when imported into the U.S. An articles is considered to be a product of the West Bank, Gaza Strip, 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.

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—
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;”

As the garment is being shipped directly from the QIZ to the U.S., this requirement is met.

In regard to the 35 percent value content requirement, you have stated in your letter that it is “anticipated” that the direct costs of processing operation performed in the QIZ will constitute more than 35 percent of the appraised value of the merchandise, and that this does not include the cost of the foreign fabric and certain trimmings used in the assembly of the garment.

However, we are unable to state definitively that the garments will or will not satisfy the 35 percent value content requirement. Whether this 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 upon the information provided, the pants will be considered a product of Jordan and will be eligible for preferential duty treatment under General Note 3 (a ) (v), HTSUS, assuming that they are imported directly from the Irbid QIZ and the 35 percent value content requirement is satisfied. Again, whether the 35 percent value content requirement will be met must await actual entry of the merchandise. The country of origin of the pants is Jordan. Based upon international textile trade agreements, products of Jordan currently are not subject to quota and they do not require 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 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 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 Camille R. Ferraro at 646-733-3046.

Sincerely,

Robert B. Swierupski
Director,

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