United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0545133 - HQ 0556194 > HQ 0555934

Previous Ruling Next Ruling


HQ 555934


November 4, 1991
CLA-2 CO:R:C:S 555934 SER

CATEGORY: CLASSIFICATION

Mr. Howard Greenstein
Carnivale Bag Co., Inc.
544 Park Avenue
Brooklyn, NY 11205

RE: Duty-free treatment of vinyl carrying bags from the Dominican Republic under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA

Dear Mr. Greenstein:

This is in reference to your letter of March 13, 1991, requesting duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States Annotated (HTSUSA)("Note 2(b)"), for vinyl carrying bags from the Dominican Republic.

FACTS:

In your submission, you referenced a letter from Customs (555803 dated March 8, 1991), which you state encompassed articles similar to those at issue here. In letter 555803, the articles at issue were ladies handbags comprised exclusively of vinyl. The production of the vinyl bags involved shipping rolls of expanded vinyl and vinyl sheeting; thread; zippers; polybags; and all other necessary accessories, all of U.S.-origin, to the Dominican Republic where they were to be used to produce several styles of ladies handbags. The operations necessary to produce the vinyl ladies handbags in the Dominican Republic involved cutting the vinyl to shape; sewing and/or gluing the pieces of vinyl together; and adding zippers and other accessories.

The article at issue here is a carrying bag of the type generally associated with use as a carry-on bag for air travel. These bags are stated to be virtually the samed as the vinyl ladies handbags and consist of all vinyl materials except for a cotton webbed shoulder strap.

ISSUE:

Whether the vinyl carrying bags at issue are entitled to duty-free treatment under Note 2(b) when imported into the U.S.

LAW AND ANALYSIS:

Section 222 of the Customs and Trade Act of 1990 (P.L. 101- 382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUS, ("Note 2(b)") to provide for duty-free treatment of articles, other than certain specified products, which are assembled or processed in a Caribbean Basin Initiative beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.

Specifically Note 2(b) provides as follows:

(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if-

(i) the article is--

(A) assembled or processed in whole of fabricated components that are a product of the United States, or

(B) processed in whole of ingredients (other than water) that are a product of the United
States, in a beneficiary country; and

(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

As used in this paragraph, the term "beneficiary country" means a country listed in General Note 3(c)(v)(A), HTSUSA. The Dominican Republic is a designated BC.

As stated above, Note 2(b) specifies four categories of products which are excluded from duty-free treatment under this provision: textile articles; apparel articles; petroleum; and certain petroleum products. The issue presented here concerns whether the camera bags are included in the "textile articles" exclusion for purposes of Note 2(b) and, therefore, precluded from receiving duty-free treatment under this provision. In a letter dated August 28, 1991 (555886) to the Office of Textiles and Apparel, International Trade Administration, U.S. Department of Commerce (copy enclosed), we stated:

... as a general rule, we believe that those articles (other than footwear and parts of footwear) classified in HTSUS provisions which include a textile category number should be considered "textile and apparel articles" for purposes of U.S. Note 2(b) and, therefore, precluded from receiving duty-free treatment under this provision. Conversely, those articles (except petroleum and certain petroleum products) classified in tariff provisions not containing a textile category number should be entitled to such treatment, assuming compliance with the requirements of U.S. Note 2(b).

Based on the information provided, it is our opinion that the vinyl bags would be properly classified in subheading 4202.92.4500, HTSUSA. Since these bags are not classified in a provision which include a textile category number, they are eligible for duty-free treatment under this note, assuming all other conditions are fulfilled.

As stated above, to qualify for duty-free treatment under Note 2(b), an article must be assembled or processed in a BC entirely of components or ingredients that are a "product of" the U.S. An article manufactured within the customs territory of the U.S. is considered a "product of" the U.S. You state in your submission that all of the materials used to produce the bags are products of the U.S.

In regard to the operations performed in the Dominican Republic, we believe that the cutting and assembly of the U.S. materials are encompassed by the operations specified in Note 2(b). See HRL 555742 dated November 5, 1990. Therefore, if all the components are of U.S. origin and the finished articles are shipped directly to the U.S. without entering into the commerce of any foreign country other than a BC, and the applicable documentation requirements are satisfied, the vinyl bags will be entitled to duty-free treatment under this provision.

HOLDING:

On the basis of the information submitted, we conclude that the vinyl bags, classified in subheading 4202.92.4500, HTSUSA, and made in the Dominican Republic wholly from materials of U.S. origin, are entitled to duty-free treatment under Note 2(b), upon compliance with the documentation requirements set forth in Headquarters telex 9264071 dated September 28, 1990.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: