H321716

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H321716 June 29, 2022 OT:RR:CTF:FTM H321716 MD CATEGORY: Classification Center Director Apparel, Footwear, and Textiles CEE U.S. Customs and Border Protection 139 Southern Road Savannah, Georgia 31405 RE: Application for Further Review of Protest No. 4503-21-101434; Tariff Classification of Sewing Thread; PTPA Eligibility; Women’s Garments Dear Center Director: The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 4503-21-101434, timely filed by Diaz Trade Law on September 15, 2021, on behalf of their client, Fair Indigo, LLC (“Fair Indigo” or “Protestant”), regarding the eligibility of four women’s garments for the preferential tariff treatment under the Peru Trade Promotion Agreement (“PTPA”). On November 2, 2021, counsel for Protestant filed a supplemental protest. This supplement detailed the provision of samples by Protestant to U.S. Customs and Border Protection (“CBP”) for testing. Specifically, Protestant provided samples of the sewing thread utilized to produce the subject merchandise. Protestant also provided independent laboratory analysis of the sewing thread at-issue within this supplement. The sewing thread was analyzed by the CBP Laboratory in Savannah, Georgia, and its report is included in this ruling. Ultimately, to determine the eligibility of the garments under the PTPA, an analysis into the tariff classification of the sewing thread used to make each garment was required. FACTS: The subject merchandise, entered into the United States on February 25, 2020, and June 24, 2020, respectively, is described as “Women’s Scoop Neck T-Shirt,” “Women’s Long Sleeve Scoop Neck T-Shirt,” “Women’s Square Neck Dress,” and “Women’s Maxi Skirt.” One entry was liquidated on March 19, 2021, with the “Women’s Scoop Neck T-Shirt” classified under subheading 6109.10.0040, Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”), and the “Women’s Long Sleeve Scoop Neck T-Shirt” classified under 6109.10.0070, HTSUSA. The second entry was liquidated on July 2, 2021, with the “Women’s Square Maxi Dress” classified under subheading 6104.42.0010, HTSUSA, and the “Women’s Maxi Skirt” classified under subheading 6104.52.0010, HTSUSA. According to documentation supplied by Protestant, the subject merchandise is described as follows. The Women’s Scoop Neck T-Shirt (“Style 02600”) is constructed from 95 percent organic Pima cotton and 5 percent spandex knit fabric. Style 02600 features short, hemmed sleeves, a scoop-front neckline, and a straight, hemmed bottom. The Women’s Long Sleeve Scoop Neck T-Shirt (“Style 02800”) is also constructed from 95 percent organic Pima cotton and 5 percent spandex knit fabric. Style 02800 features long, hemmed sleeves, a rib-knit, scoop-front neckline, and a straight, hemmed bottom. The Women’s Square Neck Dress (“Style 03806”) is constructed from 100 percent organic Pima cotton. Style 03806 features a squared front and back neckline and a hemmed bottom which reaches just below the mid-thigh. The Women’s Maxi Skirt (“Style 03810”) is constructed from 100 percent organic Pima cotton. Style 03810 features a hemmed-bottom and reaches just below the calf. On January 19, 2021, CBP issued CBP Form 28 (Request for Information) to Protestant, specifically requesting the provision of entry packets, certificates of origin, purchase orders, fabric import records and invoices, cutting records, daily sewing records, export records, and affidavits from the producers of raw materials used in the production of the garments. On February 18, 2021, Protestant furnished CBP with the requested documents, except for information from their sewing thread supplier. According to the documents provided by Protestant, Protestant’s Peruvian manufacturer purchases yarn wholly formed in Peru from a domestic supplier, after which the manufacturer sends the yarn to a domestic fabric maker, alongside sewing thread, for conversion into fabric. In other words, the cotton knit fabric and the spandex knit fabric for the women’s apparel is knitted from yarns and fibers produced in Peru. The documentation further provides that once Protestant’s Peruvian manufacturer receives the converted fabric, they perform the cutting in-house, before either sewing the fabric in-house or via subcontracting with domestic workshops. When this fabric is sewn with spandex knit fabric, which the documents demonstrate is wholly formed in Peru, for Style 03806 and Style 03810, it is also done either in-house or via domestic subcontracting. Lastly, once the fabric has been sewn, Protestant’s Peruvian manufacturer performs finishing, quality inspection, packing, and shipping in-house. CBP issued a final Notice of Action on March 2, 2021, pertaining to Style 03806 and Style 03810, determining that CBP had “verified the origin of the 100% cotton dresses and skirts” pursuant to the PTPA; however, “[t]he verification revealed that the good[s] do[] not qualify for preferential tariff treatment” because insufficient documentation was provided. On March 19, 2021, CBP issued a proposed Notice of Action, pertaining to Style 02600 and Style 02800, which asked Protestant to “provide [all] the documentation requested” in the January 19, 2021, CBP Form 28. Three days later, on March 22, 2021, Protestant supplied CBP with production information and affidavits from their Peruvian thread distributor, verifying the composition of the sewing thread and its Chinese origin. Protestant noted that it was still unable to contact their thread manufacturer in mainland China, ostensibly due to the ongoing Coronavirus (COVID-19) Pandemic, to receive the requested production information and affidavits. On June 24, 2021, CBP issued a final Notice of Action pertaining to Style 02600 and Style 02800. CBP stated that it had attempted to verify the originating status of the merchandise pursuant to the PTPA; however, “compliance with a rule of origin [could] not be[] substantiated.” Therefore, CBP concluded that “the goods do not originate” for the purposes of the PTPA. Following the submission of Protest No. 4503-21-101434 on September 15, 2021, CBP issued a Preliminary Exam Finding on October 19, 2021, which stated that the requested sample quantity of sewing thread was neither provided by Protestant nor sufficient for CBP Laboratory Analysis to confirm its composition as made of 100% polyester fibers. Through counsel, Protestant filed a Supplementary Protest on November 2, 2021, asserting that they had submitted a spool of thread – measuring 5,000 yards – and requisite samples of each garment at-issue for review. Corresponding with the CBP Laboratory, it was established that they were in possession of each sample submitted by Protestant. On December 14, 2021, the CBP Laboratory concluded their analysis in Report No. SV20212623, detailing that each of the sewing threads in their possession was made of “2-ply yarns with a ‘Z’ twist [and] composed wholly of polyester staple fibers.” ISSUES: What is the tariff classification of the relevant sewing thread? Is the subject merchandise eligible for preferential tariff treatment under the PTPA? LAW AND ANALYSIS: This matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification, applicable rate, and amount of duties chargeable. The protest was timely filed, within 180 days of liquidation of the entries. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, §2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. §1514(c)(3) (2006)). Review of Protest No. 4503-21-101434 is properly accorded pursuant to 19 C.F.R. §174.24(b), as Protestant alleges that their protest involves a question of law or fact which has not been ruled upon by the CBP Commissioner or their designee, or by the Customs Courts; specifically addressing the question of whether or not merchandise at issue is eligible for 

This matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification, applicable rate, and amount of duties chargeable. The protest was timely filed, within 180 days of liquidation of the entries. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, §2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. §1514(c)(3) (2006)). Review of Protest No. 4503-21-101434 is properly accorded pursuant to 19 C.F.R. §174.24(b), as Protestant alleges that their protest involves a question of law or fact which has not been ruled upon by the CBP Commissioner or their designee, or by the Customs Courts; specifically addressing the question of whether or not merchandise at issue is eligible for preferential tariff treatment under the PTPA, when the subject goods were produced entirely in the territory of Peru, the United States, or both, and whether or not the tariff classification of the non-originating sewing thread used in the manufacture of the garments has affected the garments’ PTPA eligibility.Tariff ClassificationClassification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI”). GRI 1 provides that the classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may be applied in order. Pursuant to GRI 6, classification at the subheading level uses the same rules, mutatis mutandis, as classification at the heading level.The 2020 HTSUS provisions under consideration are as follows:5508 Sewing thread of man-made staple fibers, whether or not put up for retail sale* * *6104 Women’s or girls’ suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear), knitted or croc