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NY K82614





February 19, 2004

CLA-2-RR:NC:TA:360 K82614

CATEGORY: CLASSIFICATION

Ms. Stacy Bauman
American Shipping Company, Inc.
140 Sylvan Avenue
Englewood Cliffs, NJ 07632

RE: Classification and country of origin determination for women’s woven garments; 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 Ms. Bauman:

This is in reply to your letter dated January 21, 2004, submitted on behalf of your client Dress Barn Inc. Your request concerns the classification, country of origin determination and eligibility for preferential duty treatment for garments that may be produced, in part, in a Qualifying Industrial Zone (QIZ).

FACTS:

The shirt, style 7719, is constructed from 97 percent polyester and 3 percent spandex woven fabric. The garment features a shirt collar, a full front opening with five button closures, shoulder pads, long sleeves with three buttons at the cuffs, two breast pockets, two patch pockets below the waist and a hemmed bottom. On the back of the shirt is an adjustable self-fabric tie.

The pants, style 7779, are also constructed from 97 percent polyester and 3 percent spandex woven fabric. The garment extends to the ankles and features a front zipper closure with a button on the waistband and side pockets.

The manufacturing scenario for both garments is as follows. The fabric for the garments is formed in Korea and then shipped in rolls to Jordan. The foam for the shoulder pads are formed in Taiwan and the fabric covering the shoulder pads is formed in Israel. These materials are then imported in rolls into Jordan. All other accessories are of Israeli origin. The cutting of these materials is done in Jordan and the pockets and self-fabric tie are created and sewn in Jordan. All of the finished components are sewn together, buttons attached, self-fabric tie inserted and assembled into completed garments in Jordan. All other finishing processes and packing are also done in Jordan. The finished good is then imported into the United States from Jordan. You have also stated that the production in Jordan will be in an approved “Qualifying Industrial Zone.”

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 shirt will be 6211.43.0060, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other women’s garments, of man-made fibers, shirts excluded from heading 6206. The general rate of duty is 16% ad valorem.

The applicable subheading for the pants will be 6204.63.3510, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for women’s trousers, of synthetic fibers. The general rate of duty is 28.6% ad valorem.

The shirt falls within textile category designation 641 and the trousers fall within textile category designation 648. 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.

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.” In your request, although you have indicated that the shirt will be produced in a Qualifying Industrial Zone within Jordan, you have not specified the zone to be used. Therefore, no determination can be made as to whether the zone has been approved.

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 a qualifying industrial zone.

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 6201-6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession.

HTSUS Tariff shift and/or other requirements

6210-6212 (1) If the good consists of two or more components, a change to an assembled good of heading 6210 through 6212 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(b)(6) defines "wholly assembled" as:

The term "wholly assembled" when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as "wholly assembled" in a single country, territory, or insular possession.

The subject garments will be classified within the above noted range, in headings 6204 and 6211, HTS. The garments consist of two or more components. As the garments are wholly assembled in a single country, the terms of the tariff shift are met. The country of origin is Jordan, QIZ, the country in which the garments were wholly assembled.

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.

As noted above, if the garments are made in an approved qualifying industrial zone in Jordan, 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 shirt and pants will be considered a product of Jordan. If the garments are produced in a qualifying industrial zone within Jordan, they 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 garments is Jordan. Based upon international textile trade agreements products of Jordan currently are not 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 Patricia Schiazzano at 646-733-3051.

Sincerely,

Robert B. Swierupski
Director,

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