Details of Proclamation Amending HTS for Haiti HELP Apparel, Made-Ups, Etc.

This is Part II of a multi-part series of summaries of the proclamation, and covers the changes to Subchapter XX of Chapter 98 that implement duty-free tariff treatment for additional apparel, as well as made-up textiles, imported directly from Haiti or the Dominican Republic, as provided for by the Haiti Economic Lift Program (HELP) Act¹ and extend the HOPE TPLs, etc. See future issues for additional summaries.

These HELP and other U.S. Note 6 tariff schedule modifications are effective for goods entered or withdrawn from warehouse for consumption on or after November 1, 2010.

Certain Knit Apparel Is Duty-Free Without Limit

The proclamation adds a new HTS 9820.61.45 and associated U.S. Note 6(p) to Subchapter XX of Chapter 98 to provide unlimited duty-free treatment to knit apparel items in the below tariff numbers that are wholly assembled or knit-to-shape in Haiti from any combination of fabrics, fabric components, components knit-to-shape or yarns, and that are imported directly from Haiti or the Dominican Republic, without regard to the source of the fabric, fabric components, knit-to-shape or yarns from which the article is made. The knit apparel tariff numbers that benefit from this new provision are:

(The proclamation lists these tariff numbers in numerical order, rather than in category number order.)

Cat 334 -- Men/Boys Cotton Coats

Cat 335 -- Women/Girls Cotton Coats

Cat 336 -- Cotton Dresses

Cat 338 -- Men/Boys Cotton Knit Shirts

Cat 339 -- Women/Girls Cotton Knit Shirts/Blouses

Cat 342 -- Cotton Skirts

Cat 350 -- Cotton Dressing Gowns, Robes, etc.

Cat 351 -- Cotton Nightwear, Pajamas

Cat 433 -- Men/Boys Suit-Type Coats (Wool)

Cat 434 -- Other Men/Boys Wool Coats

Cat 435 -- Women/Girls Wool Coats

Cat 438 -- Wool Knit Shirts/Blouses

Cat 633 -- Man-Made Fiber Suit-Type Coats

Cat 634 -- Other Men/Boys Man-Made Fiber Coats

Cat 635 -- Women/Girls Man-Made Fiber Coats

Cat 636 -- Man-Made Fiber Dresses

Cat 638 -- Men/Boys Man-Made Fiber Knit Shirts

Cat 639 -- Women/Girls Man-Made Fiber Knit Shirts/Blouses

Cat 651 -- Man-Made Fiber Nightwear/Pajamas

Certain Made-Up Textile Articles Are Duty-Free Without Limit

The proclamation also adds a new HTS 9820.63.05, in U.S. Note 6(p) of Subchapter XX of Chapter 98 to provide unlimited duty-free treatment to made-up textile articles in the following tariff numbers, that are wholly assembled, or knit-to-shape, in Haiti from any combination of fabrics, fabric components, components knit-to-shape or yarns, and that are imported directly from Haiti or the Dominican Republic, without regard to the source of the fabric, fabric components, components knit-to-shape or yarns from which the article is made. The tariff numbers that benefit from this new provision are:

(The proclamation lists these tariff numbers in numerical order, rather than in category number order.)

Cat 363 -- Cotton Terry/Other Pile Towels

Cat 369 -- Other Cotton Manufactures

Cat 465 -- Wool Floor Coverings

Cat 469 -- Other Wool Manufactures

Cat 665 -- Man-Made Fiber Floor Coverings

Cat 666 -- Other Made-Made Fiber Furnishings

Cat 669 -- Other Man-Made Manufactures

Cat 899 -- Other Silk/Vegetable Blend Manufactures

Cat 900 -- (residual Haiti HOPE category number)

Other Made-Up Textile Articles (no category number)

HOPE Woven or Knit TPLs Could be Increased if Heavily Utilized

The proclamation adds a new (h)(iv) to Subchapter XX of Chapter 98, U.S. Note 6, for the HOPE woven apparel (9820.62.05) and knit apparel (9820.61.35) TPLs, so that each could be increased to not more than 200 million square meter equivalents (SMEs), if 52 million SMEs are charged to a respective TPL during a one-year TPL period.

(The woven and knit TPLs currently have a limit of 70 million SMEs each. These TPLs opened on October 1, 2010 and are 3% filled as of November 1, 2010. Note the value-added TPL, which opened on December 29, 2009, is just over 5% filled.)

Restriction for certain woven apparel. The level would only be 70 million SMEs for the following tariff numbers (which trade sources think could be implemented as a sublimit):

Cat 347 - Men/Boys Cotton Trousers/Breeches/Shorts

Cat 348 -- Women/Girls Cotton Trousers/Slacks/Shorts

Cat 647 -- Men/Boys Man-Made Fiber Trousers/Breeches/Shorts

Cat 648 -- Women/Girls Man-Made Fiber Slacks/Breeches Shorts

Restriction for certain knit apparel. The level would only be 85 million SMEs for the following tariff numbers (which trade sources think could be implemented as a sublimit):

Verification of no illegal transshipment. U.S. Note 6 (h)(iv) also states that the Commissioner responsible for Customs and Border Protection must verify (not later than April 1, July 1, October 1, and January 1 of each year) that apparel articles imported under this heavy utilization provision are not being unlawfully transshipped into the U.S.

Report of transshipment. If CBP determines that articles are being unlawfully transshipped, this determination would be reported to the President.

Quantitative limit could be reduced. In any one-year period during which preferential treatment is available, and during which CBP determines that transshipments are occurring, the proclamation allows the President to modify the quantitative limitation to account for such transshipments. Notice of such modifications would be published in the Federal Register.

Haiti HOPE Woven and Knit TPLs Extended thru 2020, Value-Added thru 2018

HELP also extended the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE I and II), including the woven apparel (9820.62.05) and knit apparel (9820.61.35) TPLs, to 2020, except that the Value-Added TPL was extended to 2018. The Proclamation only amends the HTS for the extension of the Value-Added TPL (9820.61.25 for entry specific value claims and 9820.61.30 for aggregate value claims).**

(Note that HOPE II extended the HOPE I woven TPL from 2011 to 2018, created the knit TPL through 2018, and modified the HOPE I value-added TPL. HOPE II also created a number of duty-free apparel, headwear and luggage provisions that are not subject to TPLs. See ITT's Online Archives or 10/21/08 news, 08102115 for BP summary.)

HOPE Duty-Free Treatment for Wire Harnesses Extended to 2020

The proclamation also amends U.S. Note 6(a) of Subchapter XX of Chapter 98 to indicate that 9820.85.44 (for wire harnesses of 8544.30.00) has been extended to December 19, 2020.

(The Haiti HOPE law provides duty-free treatment to any wire harness automotive component that is imported directly from Haiti to the U.S. if the sum of (i) the cost or value of the materials produced in Haiti or certain other countries (see U.S. Note 6(b)), or any combination thereof, plus (ii) the direct costs of certain processing operations performed in Haiti or the U.S., or both, is not less than 50% of the declared customs value of such product.)

Other Miscellaneous Changes to Subchapter XX, U.S. Note 6

Other changes in the proclamation for Subchapter XX of Chapter 98, U.S. Note 6 (other than conforming date changes) include:

• Adding Costa Rica, Peru and Oman to the list of countries for the wire harnesses benefit and the value-added TPL, in U.S. Note 6(b)(i)
• Adding HTS 9822.06.20 (Peru FTA-referenced item number) to U.S. Note 6(f)(iii)(B),,for purposes of determining the applicable percentage for the value-added TPL (fabrics or yarns not available in commercial quantities)

¹P.L. 111-171

²Listed in proclamation as HTS 6103.29.0500, which does not exist; correctly listed in law as 6103.29.0550

³Listed in proclamation as 6107.21.0030, but not listed in law, and does not exist

⁴Not listed in proclamation, but listed in law, HTS 5705.00.2020

** This paragraph was corrected on 11/16/10. It had originally stated that the Value-Added TPL was extended to 2020.

(See ITT’s Online Archives or 11/04/10 news, 10110422, for Part I -- overview. See ITT’s Online Archives or 05/26/10 news, 10052663, for BP summary of President signing HELP into law.)

(See ITT’s Online Archives or 09/22/10 news, 10092216, for BP summary of Korean firm signing MOU for garment industrial park in Haiti. See ITT’s Online Archives or 05/19/10 news, 10051924, for BP summary of Haiti Recover plan calling for textile centers, new ports, etc.)

(Proclamation 8596, FR Pub 11/04/10)