U.S.-Caribbean Basin Trade Partnership Act; subheading 9820.11.06; lining of foreign origin

HQ 562125 February 17, 2002 MAR-2 RR:CR:SM 562125 KSG CATEGORY: Classification TARIFF NO.: 9820.11.06 Renate Cohen Herman Kay Bromley 463 Seventh Avenue New York, NY 10018 RE: U.S.-Caribbean Basin Trade Partnership Act; subheading 9820.11.06; lining of foreign origin Dear Ms. Cohen: This is in response to your letter of March 19, 2001, requesting a binding ruling on the eligibility of wool coats made in the Dominican Republic for preferential tariff treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). FACTS: You propose to import coats that will be cut and sewn in the Dominican Republic by Quality Plus Corporation. The coats will be made of U.S.-origin wool fabric made of yarn that is spun in the U.S. The buttons are of U.S.-origin also. The lining is made of 100% polyester fabric that is made in Korea. ISSUE: Whether the wool coat described above, is eligible for preferential tariff treatment under the CBTPA. LAW AND ANALYSIS: Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213 (b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin. Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in section 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country. Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA. The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country: (1) that is designated as a CBTPA beneficiary country; and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following, certain customs procedures that allow U.S. Customs to verify the origin of the articles. In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000. It is noted that the issue raised in this ruling letter is outside the scope of the comments received. These interim regulations are set forth in 19 CFR 10.221-10.237. Subheading 9820.11.06, HTSUS, provides that articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule which meet the following description are eligible for CBTPA treatment: Apparel articles cut in one or more such countries from fabric wholly formed in the United States from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 and are wholly formed in the United States), if such articles are assembled in one or more such countries with thread formed in the United States. Such apparel articles described in subheading 9820.11.06, HTSUS, are eligible for duty free and quota free entry into the United States. There are two provisions that are applicable to certain interlinings of foreign origin; U.S. Note 3(a)(ii), and 3(c), Subchapter XX, Chapter 98, HTSUS. However, there is no provision that provides for linings of foreign origin. Therefore, the wool coats would not be eligible for preferential treatment under the CBTPA because the linings are made of Korean polyester fabric. HOLDING: The wool coats, manufactured as described above, would not be eligible for preferential tariff treatment under the CBTPA. 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. Sincerely, John Durant, Director Commercial Rulings Division