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NY 881518




January 27, 1993

CLA-2-65:S:N:N5:353 881518

CATEGORY: CLASSIFICATION

TARIFF NO.: 6505.90.2060

Ms. Carol Frechette
Watership Trading Companie
1025 Fraser Street
Bellingham, WA 98226

RE: The tariff classification of headwear assembled in Canada.

Dear Ms. Frechette:

In your letter dated December 15, 1992, received in this office on December 29, 1992, you requested a tariff classification ruling.

Your inquiry concerns the classification of woven cotton canvas hats. The hats will be made from fabric of US origin. The fabric will be cut into components in the US and shipped to Canada where the parts will be sewn together into completed hats. The hats will be returned to the US for finishing operations such as the addition of grommets in the crown, installation of a chin strap and a leather button and a hangtag. From the information provided the hats are totally produced in the territory of Canada and the US. The samples submitted will be returned to you, as requested.

The applicable subheading for the hats will be 6505.90.2060, Harmonized Tariff Schedule of the United States (HTS), which provides for Hats and other headgear...Other: Of cotton, flax or both: Not knitted: Other. The duty will be 8 percent ad valorem.

Goods classifiable under subheading 6505.90.2060, HTS, which have originated in the territory of Canada, will be entitled to a 4 percent rate of duty under the United States-Canada Free Trade Agreement (FTA) upon compliance with all applicable regulations.

Your inquiry raises the question of whether heading 9802, Harmonized Tariff Schedules of the United States (HTS), is applicable to this merchandise. Subbheading 9802.00.80, HTS, provides for articles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process such as cleaning, lubrication, and painting. The provision levies a duty upon the full value of the imported article, less the cost or value of the components which are products of the United States, at the same rate that would apply to the imported article were it not subject to subheading 9802.00.80, HTS. All three of the above requirements must be met to receive the partial duty exemption.

You have stated in your letter that the cut components are merely sewn together in Canada before the item is imported into the United States. In this case, it is our opinion that the hats may be entered under subheading 9802.00.80, HTS, with allowances in duty for the cost or value of the U.S. components incorporated therein, upon compliance with the documentary requirements of 19 CFR 10.24. The information substantiating 9802.00.80, HTS, must be submitted at time of entry.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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