CBP Not Expected to Accept "Note 6" China Knit Shirt/Blouse Quota Exclusion Without a Binding Ruling as Evidence
U.S. Customs and Border Protection (CBP) began enforcing new quotas on certain textile and apparel products originating in China that are exported on or after January 1, 2006 in accordance with a recent U.S. and China textile agreement for the 2006 - 2008 period.
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Included in the articles subject to quota for this three year period are China-origin cotton and manmade fiber (MMF) knit shirts and blouses in categories 338, 339, 638, and 639, except for the following garments which are excluded from quota by Statistical Note 6 (Note 6) to Harmonized Tariff Schedule (HTS) Chapter 61:
"For purposes of heading 6110, the term "knit to shape" means garments knit to shape on flat-knitting machines, having a stitch count exceeding 9 stitches per 2 centimeters, but less than or equal to 18 stitches per 2 centimeters, measured on the outer surfaces of the fabric, in the direction in which the stitches are formed. All of the garment's components, which include, but are not limited to collars, plackets, cuffs, waistband and pockets, are knit to shape. Components are considered knit to shape if they come off the knitting machine in exactly the form used in the garment, without further cutting, or trimming. All of the components are assembled by looping and linking, including the side seams."
CBP and the Committee for the Implementation of Textile Agreements (CITA) indicate that some cotton and MMF knit shirts and blouses are excluded from quota by designating the China quota categories as 338/339pt and 638/639pt. In addition, the HTS contains tariff numbers that are only applicable to Note 6.
CBP Not Expected to Accept "Note 6" Exclusion without Binding Ruling
According to sources at CBP headquarters, CBP expects to accept a China-origin entry classified under a "Note 6" tariff number (i.e. one that claims an exclusion from the 338/339pt or 638/639pt China quota) if there is a binding ruling for the merchandise agreeing to the "Note 6" exclusion.
Sources add that any entry of China 338, 339, 638, and/or 639 garments with a "Note 6" tariff number, that is without an applicable binding ruling, is likely to be examined. Furthermore, the entry could be subject to seizure or other penalties if it is determined that quota-circumvention was intended, etc.
(See ITT's Online Archives or 01/03/06 news, 06010310 for BP summary detailing Note 6. See ITT's Online Archives or 12/15/05 news, 05121510 for BP summary of 2006 China quota levels, including ELVIS requirements for quota products.)