January 27, 2010 CBP Bulletin Notice Withdraws Proposal on DR-CAFTA Hosiery with Elastomeric Yarns (Origin Rule Threat Removed)
In the January 27, 2010 issue of the U.S. Customs and Border Protection Bulletin (Vol. 44, No. 5), CBP withdrew its proposal to deny duty-free entry to certain hosiery made in a DR-CAFTA country from non-originating elastomeric yarn.
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Eighteen comments were received in response to its June 12, 2009 proposal to modify a ruling and revoke treatment regarding this product. The withdrawal is effective January 27, 2010.
Withdrawn due to insufficient information. CBP now states that due to insufficient information, including whether the gimped yarns at issue meet the terms of Note 13 to Section XI governing the classification of elastomeric yarns, CBP is withdrawing its proposal to modify NY N028235.
(Note 13 to Section XI, provides that: "For the purposes of this Section and, where applicable, throughout the tariff schedule, the expression "elastomeric yarn" means filament yarn, including monofilament, of synthetic textile material, other than textured yarn, which does not break on being extended to three times its original length and which returns, after being extended to twice its original length, within a period of five minutes, to a length not greater than one and a half times its original length." )
Description of hosiery of non-DR-CAFTA yarn. The products were described as pantyhose knit to shape in a DR-CAFTA country from non-DR-CAFTA yarns. Three yarns were described as: Style C3M 8707C consisting of a spandex core with a polyester yarn wrapped around the core, Style C3M S136M consisting of a spandex core with a texturized nylon yarn wrapped around the core, and Style C3M S152M consisting of a spandex core with a nylon yarn wrapped around the core. All three were said to be gimped yarns.
Withdrawn "proposed interpretation". In NY N028235, CBP had determined that hosiery containing non-originating elastomeric yarns was eligible for duty free entry under the DR-CAFTA because the yarns had undergone the required tariff shift.
However in June 2009, CBP proposed that this hosiery was not eligible for duty-free entry under the DR-CAFTA based on the implementing legislation for the DR-CAFTA, Pub. L. 109-53, specifically 19 USC 4033(f)(3)(B), which states that " A textile or apparel good containing elastomeric yarns in the component of the good that determines the tariff classification of the good shall be considered to be an originating good only if such yarns are wholly formed in the territory of a CAFTA-DR country."
The fact that this requirement was grouped in a paragraph in the Harmonized Tariff Schedule which also set forth the de minimis rule (General Note 29(d)(i)) did not change the fact that 19 USC 4033(f)(3)(B) is a separate and distinct requirement and would apply regardless of whether the tariff shift rule was met. Consequently, CBP had proposed that the non-originating elastomeric yarn would have disqualified the hosiery from eligibility for duty-free entry under the U.S.-Dominican Republic-Central America Free Trade Agreement.
(CBP's proposed reasoning could have applied to products other than hosiery (e.g., t-shirts, pants, jackets, etc.) if the elastomeric yarns were contained in the component that determines the classification, as well as certain other free trade agreements.)
(See ITT's Online Archives or 06/16/09 and 06/19/09 news, 09061630 and 09061905, for BP summaries of the proposed action.)
January 27, 2010 CBP Bulletin (Vol. 44, No. 5) available athttp://www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2010/