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HQ 556580

June 29, 1992
CLA-2 CO:R:C:S 556580 SER

CATEGORY: CLASSIFICATION

TARIFF NO.: 9021.19.8000, 3005.90.5090

District Director of Customs
La Puntillo #1
Old San Juan, Puerto Rico 00903

RE: Internal Advice 29/91; Section 215 and 222 Customs and Trade Act of 1990; classification; CBERA; Puerto Rico, Haiti; medical products

Dear Sir:

This is in reference to your memorandum, dated May 8, 1991, received by this office on March 2, 1992, forwarding a request for internal advice from Fermin R. Morales, Inc., on behalf of Bauer and Black, concerning eligibility under the Caribbean Basin Economic Recovery Act (CBERA)(19 U.S.C. 2701-2706) for rigid wrist braces, wristlets, hernia belts and sacro-iliac belts for men and women.

FACTS:

The articles at issue are rigid wrist braces, hernia belts, wristlets and sacro-iliac belts for men and women. The rigid wrist brace is used to immobilize an injured wrist joint and protect the injured wrist from sudden movements which would aggravate the injury. The provided sample (large size) is approximately six inches long and is made of a soft stretch knit fabric. It has three velcro tab closures, an adjustable velcro strap and loop, and a removable bent aluminum splint. It is stated to fit either the left or right wrists.

The hernia belt is used by individuals who have suffered from an inguinal rupture. The belt is approximately four inches wide and is made of tightly woven fabric with two side elastic panels to fit the contour of the hips, two adjustable leg straps, hook and eye fasteners in the front, and adjustable buckles and lace closure in the back. The belt also has two movable pads for precise positioning over the hernia.

The wristlet is a wrist band made of a lightweight elastic textile material with a velcro fasteners. It is approximately nine inches long and three inches wide. It is stated that the article reduces swelling, supports weakened muscles and helps minimize pain in the wrists.n

The sacro-iliac belt for men and women is stated to help relieve lower back pain and spasms. In addition, they also are stated to provide support and may be used as a posture aid. They are made of a tightly woven rigid fabric that is doubled the whole length of the belt. They are approximately six inches wide and a minimum of approximately four inches long. The belts have adjustable hook and eye fasteners in the front, adjustable straps and buckles in the back, four flexible stays, a removable reinforced foam rubber pad in a back pouch, and two half-moon shaped elastic panels that fit the contour of the hips.

The manufacture of all these articles is done by Bauer & Black, Inc., and is stated to use components "wholly the product of the U.S. (Mainland U.S.A. and Puerto Rico)." Based on the importer's submission, it appears that U.S.-origin yarn is manufactured into fabric in Puerto Rico. In Puerto Rico the fabric is then cut to shape, and exported in a condition ready for assembly, by sewing, to Haiti. Other parts and accessories, stated to be wholly of U.S.-origin, and used in the manufacture of the articles at issue, are also sent with the cut fabric to Haiti. It is stated that no materials of non-U.S. origin are added in Haiti. These articles are then to be directly imported to Puerto Rico.

ISSUE:

1. What is the proper classification of the articles at issue?

2. Whether the merchandise at issue is entitled to duty-free treatment under the CBERA or under U.S. Note 2(b), subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

LAW AND ANALYSIS:

1. Classification

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 9021, HTSUSA, provides for "orthopedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances" ...." The Explanatory Notes, which constitute the official interpretation of the HTSUSA at the international level, state that this provision encompasses trusses used for inguinal support purposes, corset trusses with various special features used for posture purposes, and appliances with splints for the arms. The sacro-iliac belt, the hernia belt and the rigid wrist brace would fall withinn-3-
subheading 9021.19.8000, HTSUSA. In Headquarters Ruling Letter (HRL) 083995 dated May 1, 1989, Customs ruled that similar articles are properly classified in heading 9021, HTSUSA.

Subheading 3005.90.5090, HTSUSA, provides for wadding, gauze bandages and similar articles, ... put up in forms or packing for retail sale for medical, ... [or] surgical purposes .... The wristlets would be properly classified in this tariff provision.

2. Sections 215 and 222 of the Customs and Trade Act of 1990

There are two alternative statutory provisions which may be applicable for the products at issue in this case. Section 215 of the Customs and Trade Act of 1990 (Public Law 101-382) amended section 213(a) of the CBERA (19 U.S.C. 2703(a)) to provide for the duty-free treatment of articles (other than those ineligible for CBERA treatment), which are the growth, product, or manufacture of Puerto Rico and which subsequently are processed in a CBERA beneficiary country (BC). The duty-free treatment provided under 19 U.S.C. 2703(a)(5) applies to an article which is the growth, product, or manufacture of Puerto Rico, if:

(A) the article is imported directly from the beneficiary country into the customs territory of the United States,

(B) the article was by any means advanced in value or improved in condition in a beneficiary country, and

(C) if any materials are added to the article in a beneficiary country, such materials are a product of a beneficiary country or the United States.

Based on the present information, we find that the hernia belts, wrist braces, wristlets and sacro-iliac belts at issue satisfy the above requirements. The primary component-- fabric- -used in the assembly of the articles in Haiti appears to be the product or manufacture of Puerto Rico. Any components not manufactured in Puerto Rico are stated to be the product of the U.S. In addition, as stated in General Note 3(c)(v)(A), Harmonized Tariff Schedule of the United States Annotated (HTSUSA), Haiti, the country in which the articles are subsequently processed, is a BC for purposes of the CBERA.

Moreover, these articles are CBERA-eligible articles. They are properly classified in heading 9021, HTSUSA, or subheading 3005.90.5090, HTSUSA, which are CBERA eligible provisions. It is also required that the articles be advanced in value or improved in condition by any means in a BC. The operations that are performed in Haiti clearly fulfill this requirement of the legislation.n -4-

Section 222 of the Customs and Trade Act of 1990 (P.L. 101- 382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUSA, ("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.

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" (BC) means a country listed in General Note 3(c)(v)(A), HTSUSA.

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 articles are included in the "textile and apparel article" exclusion for purposes of Note 2(b). It is the position of Customs that what constitutes "textile and apparel articles" for purposes of Note 2(b), are those articles which are subject to textile agreements as evidenced by a textile category number in the HTSUSA provision in which they are classified. See, Treasury Decision 91-88, 25 Cus.Bull. 45, p.1 (November 6, 1991). Since none of the articles at issue are subject to textile agreements, they are all eligible for duty-free treatment under this note.

Note 2(b)(i) specifies that an eligible article will be entitled to duty-free treatment if it is:n-5-

(A) assembled or processed in whole of fabricated components that are a product of the U.S., or

(B) processed in whole of ingredients (other than water) that are a product of the U.S., in a BC.

Although a detailed description of the assembly operations to be performed in Haiti was not provided, based on the information provided, sewing the cut-to-shape materials and other parts and accessories together to form the final article would be encompassed by the operations specified in Note 2(b)(i). Therefore, if, in fact, all materials are of U.S. origin and have been shipped directly to Haiti, and the articles are shipped directly to the customs territory of the U.S. without entering into the commerce of any foreign country other than a BC, the medical articles will be entitled to duty-free treatment under Note 2(b), provided all of the documentation requirements set forth in Headquarter Telex 9264071 dated September 28, 1990 (copy enclosed) are met.

HOLDING:

The articles at issue are CBERA eligible articles, which were produced from fabric, the growth, product, or manufacture of Puerto Rico and were advanced in value or improved in condition in a BC by the assembly of the fabric with components which are exclusively of U.S. origin. Therefore, assuming that the articles are imported directly to the customs territory of the United States, they are entitled to duty-free treatment under 19 U.S.C. 2703(b)(5), upon compliance with the documentation requirements set forth in Headquarters' telexes dated September 28, 1990 (9271073) and December 20, 1990 (1354071)(copies enclosed).

In addition, based on the information presented, the articles at issue would also be eligible for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA, upon compliance with the imported directly requirement and the documentation requirements as set forth in Headquarter telex of September 28, 1990 (9264071).

It should be noted that trade between the United States and Haiti has been restricted pursuant to Presidential Executive Order 12779 dated October 28, 1991, Vol. 56, Federal Register No. 210 October 30, 1991, p. 55973. Customs Headquarters has issued seven telexes concerning the trade restrictions. The most recent telex 2037113 dated February 6, 1992 (copy enclosed), states in pertinent part that, effective February 5, 1992, U.S.-origin goods, processed or assembled in Haiti may be entered and released from Customs if accompanied by an appropriate specificn-6-
license issued by the Office of Foreign Assets Control to the importer. This license, in effect, will be a blanket authorization covering all such importations from and exportations to Haiti by such firm for the time period specified in such license. Any further questions regarding the restrictions on trade with Haiti should be directed to the OFAC.

The proper classification of the sacro-iliac belt, the hernia belt and the rigid wrist brace is subheading 9021.19.8000, HTSUSA, with a rate of duty of 5.8% ad valorem. The proper classification subheading of the wristlet is 3005.90.5090, HTSUSA, with a rate of duty of 7% ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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