> HQ 562987

April 21,2004

MAR-2 RR:CR:SM 562987 KSG

CATEGORY: Classification

TARIFF NO.: 9802.00.8044

Port Director

Bureau of Customs and Border Protection

2350 North Sam Houston Parkway East

Suite 1000

Houston, Texas 77032-3126

RE: Application for Further Review of Protest No. 5301-03-100651

Dear Director:

This is in reference to a Protest and Application for Further Review
filed by Vanity Fair Intimates, L.P. contesting the denial of duty-free
treatment under

the United States-Caribbean Basin Trade Partnership Act ("CBTPA").

**FACTS:**

This case involves women's panties of man-made fibers entered under
preference group A from June 18, 2002, to August 27, 2002, as products
of Honduras. The blanket Textile Certificate of Origin for 2002 for
styles 484000, 4840801, and 4848001 lists the fabric producer as U.S.
(Monroeville Alabama), narrow fabric as U.S. (Georgia narrow Fabric,
Jesup, Georgia), yarn producers as U.S. ((1) Dupont Co, Seaford,
Delaware; (2) Bayer Co., Charleston, South Carolina; (3) Swift Spinning,
Columbus, Georgia; and (4) Dillon Yarn Co., Patterson, New Jersey), and
thread producers as U.S. (American & Efird, Inc., Mount Holly, North
Carolina). The textile certificate of origin lists a producer in
Honduras.

The Manufacturer's Affidavit of origin for the fabric for 2002 states
that the fabric was wholly of U.S. originating yarn and material. The
two yarns listed are nylon (made by Dupont) and spandex (made by Bayer).

The Dupont Affidavit of Origin for Yarn lists the yarn as in whole or in
part of fibers and/or other materials originating in Canada, Mexico
and/or the U.S. However, the address listed for the manufacturing
facility of the yarn is Dupont in Chattanooga, Tennessee. Thus while it
initially appears that the Dupont Affidavit is inconsistent with the
Manufacturer's Affidavit for the fabric, the yarn affidavit states that
the yarn was produced in the U.S.

The Bayer Affidavit of Origin for Yarn lists its yarn as produced in the
U.S. wholly of U.S. originating fibers, produced in Goose Creek, South
Carolina.

However, the Manufacturer's affidavit of origin by Georgia Narrow
Fabrics LLC for the narrow fabric clearly states that the fabric is a
product of Malaysia (Heveafil USA Inc.) and Thailand ( a second
affidavit from Georgia Narrow Fabrics states that the fabric is made in
the U.S. from non-NAFTA originating yarn).

There was no information presented regarding the cutting of the
components.

We note that the Country Declaration filled out by the exporter in
Honduras clearly states that styles 4814144, 4814440, 4840001, 4840801,
and 4848001 don't qualify for CBTPA because the "elastic was made with
yarn from Taiwan and Malaysia."

**ISSUE:**

Whether the garments described above are 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 3107(a) of the
Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), signed into law on
August 6, 2002, modified the treatment accorded certain textile and
apparel articles under section 213(b) of the CBERA.

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. [See
also]{.underline} Presidential Proclamation 7626, dated November 13,
2002, published in the Federal Register on November 18, 2002 (67 Fed.
Reg. 69459).

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. El Salvador is a CBTPA beneficiary country. [See]{.underline}
U.S. Note 1, Subchapter XX , Chapter 98, HTSUS.

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).

Section 213(b)(2)(A) of the CBERA, as amended, specifies the textile and
apparel articles to which preferential treatment applies under the CBTPA
during the transition period. Section 213(b)(2)(A)(i)(I) provides, in
pertinent part, that preferential treatment applies to \-\--

> \(i\) Apparel articles **sewn or otherwise** assembled in one or more
> CBTPA beneficiary countries from fabrics wholly formed and cut, **or
> from** **components knit-to-shape** in the United States, from yarns
> wholly formed in the United States, (including fabrics not formed from
> yarns, if such fabrics are classifiable under heading 5602 or 5603 of
> the HTS and are wholly formed and cut in the United States) that are
> \-\--
>
> \(I\) entered under subheading 9802.00.80 of the HTS;

**Apparel articles entered on or after September 1, 2002, shall qualify
under the preceding sentence only if all dyeing, printing, and finishing
of the fabrics from which the articles are assembled, if the fabrics are
knit fabrics, is carried out in the United States. Apparel articles
entered on or after September 1, 2002, shall qualify under the first
sentence of this clause only if all dyeing, printing, and finishing of
the fabrics from which the articles are assembled, if the fabrics are
woven fabrics, is carried out in the United States.**

The portions in bold above were added by section 3107(a) of the Trade
Act of 2002.

Subheading 9802.00.8044, HTSUS, provides as follows:

Articles...assembled abroad in whole or in part of fabricated
components, the product of the United States, which (a) were exported in
condition ready for assembly without further fabrication, (b) have not
lost their physical identity in such articles by change inform, shape,
or otherwise, and (c) have not been advanced in value or improved in
condition abroad except by being assembled and except by operations
incidental to the assembly process, such as cleaning, lubricating and
painting.

U.S. Note 7(b)(i), Subchapter II, Chapter 98, HTSUS, as recently amended
by Presidential Proclamation 7626, provides that:

For purposes of heading 9802.00.80, duty-free treatment shall be
accorded to the following articles imported directly from a beneficiary
United States-Caribbean Basin Trade Partnership Act (CBTPA) country
previously designated by the President in a proclamation issued pursuant
to such Act and enumerated in general note 17(a) to the tariff
schedule---

\(i\) apparel articles **sewn or otherwise** assembled in one or more
such beneficiary countries from fabrics wholly formed and cut**, or**
**from components knit --to-shape,** in the United States, from yarns
wholly formed in the United States (including fabrics not formed from
yarns, if such fabrics are classifiable under heading 5602 or 5603 of
chapter 56 and are wholly formed and cut in the United States);

Presidential Proclamation 7626 added the words in bold above. This
amendment was effective with respect to goods entered, or withdrawn from
warehouse for consumption, on or after August 6, 2002.

The purpose of this 2002 amendment was to expand this provision to
encompass garments made from components knit-to-shape in the United
States.

U.S. Note 3(d), subchapter XX, HTSUS, provides that:

For purposes of U.S. note 7(i) to subchapter II of this chapter and
subheadings 9820.11.03, 9820.11.06, and 9820.11.18, an article otherwise
eligible for preferential treatment under such subheadings shall not be
ineligible for such treatment because the article contains nylon
filament yarn (other than elastomeric yarn) classifiable under
subheading 5402.10.30, 5402.10.60, 5402.31.30, 5402.31.60, 5402.32.30,
5402.32.60, 5402.41.10, 5401.41.90, 5402.51.00 or 5402.61.00 of the
tariff schedule that entered free of duty as a product of Israel under
the terms of general note 8 to the tariff schedule or as a good of
Canada or a good of Mexico under the terms of general note 12 to the
tariff schedule.

The exception for nylon filament yarn from Israel set forth in U.S. Note
3(d), subchapter XX, HTSUS, applies to the subheading 9802.00.8044
provision.

Based on the facts presented, the yarns used by Georgia Narrow Fabrics
are not wholly formed in the United States as required in subheading
9802.00.8044, HTSUS. We are unable to determine based on the documents
presented which of the listed entries are made of the yarns used by
Georgia Narrow Fabrics. Therefore, we are assuming that all of the
entries contain narrow fabric made of yarns from Malaysia and Thailand.
Further, there was no information presented regarding the cutting of the
components. Accordingly, these entries are not eligible for preferential
treatment under subheading 9802.00.8044, HTSUS.

**HOLDING**:

Based on the facts presented above, the protest should be denied in
full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065,
dated August 4, 1993, Subject: Revised Protest Directive, you are to
mail this decision, together with the Customs Form 19, to the protestant
no later than 60 days from the date of this letter. Any reliquidation of
the entry or entries in accordance with the decision should be
accomplished prior to mailing of this decision. Sixty days from the date
of this decision, the Office of Regulations and Rulings will make the
decision available to Customs personnel, and to the public on the
Customs Home Page on the World Wide Web at
[www.customs](http://www.customs/)[.gov]{.underline}, by means of the
Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

Commercial Rulings Division