The status under the North American Free Trade Agreement (NAFTA), of children’s apparel from Mexico; Article 509.

N118201 August 10, 2010 CLA-2-61:OT:RR:NC:3:358 CATEGORY: Classification TARIFF NO.: 6110.30.3059 Ms. Kim Benedetto Seasons USA, Inc. 3434 Heather Lane Wantagh, NY 11793 RE: The status under the North American Free Trade Agreement (NAFTA), of children’s apparel from Mexico; Article 509. Dear Ms. Benedetto: In your letter dated July 30, 2010, you requested a ruling on the status of children’s apparel from Mexico under the NAFTA. We are retaining the provided sample for our files. Style SUN 001 is a short sleeve rash guard top. The pullover is constructed from 80% nylon, 20% spandex finely knit fabric. The item features a mock turtleneck, short hemmed raglan sleeves, and a hemmed bottom. The cut and sewn components consist of a neckband; upper sections of raglan sleeves; undersides of raglan sleeves and side panels; and left half and right half, front and back torso panels. All components are sewn together by contrast color overlock stitching. The blue color torso panels do not cover the entire front and back. The contrast color, blue color fabric is moisture reactive, and reveals a design when wet. Style SUN 001 is an article of mixed components, the essential character of which is imparted by the blue color fabric. The blue material creates a striking visual impact compared to the remaining garment fabric. Based on GRI 3(b), the blue fabric imparts the essential character to the article. The garment is suitable for wear during various water related activities and is not designed specifically as swimwear. Two production scenarios are contemplated. Under the first scenario, the blue fabric used to produce the pullover is wholly formed and finished in Brazil from fibers formed and extruded in Brazil. The fabric used to produce the other garment components are wholly formed and finished in Mexico from fibers formed and extruded in Mexico. Under the second scenario, all fabric used to produce the pullover is formed and finished in Mexico from fibers extruded in Mexico. You state in telephone conversation that under both production scenarios the fabric will be cut to shape and sewn in Mexico. The applicable tariff provision for the pullover, Style SUN 001, will be 6110.30.3059, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for pullovers and similar garments, knitted or crocheted: of man-made fibers, other, women’s or girls’. The general rate of duty is 32% ad valorem. General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if-- (i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or (ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that-- (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or (B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; (iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because-- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts, provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. The first scenario that applies to the garment is General Note 12(b) (ii), further discussed below: As stated, the essential character of the article is the blue knit fabric which comprises the majority of the torso front and back. This material which originates in Brazil (and is classifiable in heading 6006 HTS) will be sent to Mexico where it will be cut and sewn to form a garment that will be classified in HTS 6110.30.3059. General Note 29 (n), 61.35 requires: A change to headings 6109 through 6111 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or heading 5508 through 5516 or 6001 through 6006, provided that the good is both cut (or knit to shape) and sewn or otherwise assembled in the territory of one or more of the NAFTA parties. Chapters 61, Chapter rule 2 states in pertinent part: For purposes of determining whether a good of this chapter is originating, the rule applicable to the good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. In this regard, the pullover does not qualify for preferential treatment under the NAFTA because the non-originating blue fabric of heading 6006 does not meet conditions of General Note 29 (n), 61.35. In determining the country of origin for the finished articles 19 CFR 102.21(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 foreign material 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.” Section 102.21(e) for headings 6101 – 6117 (1) states that “If the good is not knit to shape and consists of two or more component parts, except for goods of subheading 6117.10 provided for in paragraph (e) (2) of this section, 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.” Accordingly, the country of origin of the pullover is Mexico. As the country of origin of the garment is Mexico, it may be subject to a reduced rate of duty based upon the Tariff Preference Levels (TPL) established in Section XI, Additional U.S. Note 3(a), up to the annual quantities specified in subdivision (f) (i) of Note 3. Upon completion of the required documentation and up to the specified annual quantities, the garments may be eligible for the preferential rate of Free. The second scenario that applies to the garment is General Note 12(b) (iii). Under this scenario, the goods are produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials. Under the second scenario, the pullover qualifies for preferential treatment under NAFTA because the conditions of the note are met. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). 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 Bruce Kirschner at 646-733-3048. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division