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HQ 546040

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August 9, 1995
VAL R:C:M: 546040 KCC

CATEGORY: VALUATION

Mr. Darryl Wm. Golden
Norman Krieger, Inc.
P.O. Box 92599
Los Angeles, California 90045

RE: Cotton Fee assessment to sets containing non-cotton components

Dear Mr. Golden:

This is in regards to your letters dated January 19, and May 24, 1995, to Customs in New York, on behalf of Joni Blair, concerning the method of calculating the Cotton Fee to cotton and non-cotton garments classified as sets. We regret the delay in responding to your request.

FACTS:

Your client, Joni Blair, imports cotton garments with belts which are classified as sets under the Harmonized Tariff Schedule of the United States (HTSUS). Although the belts do not contain cotton, you state that the value of the belts is being added to the value of the cotton garments for purposes of calculating the Cotton Fee. Additionally, you state that the invoices for the sets list the value and weights separately for the cotton garments and non-cotton belts. You contend that the value of the belts should be deducted before the Cotton Fee is calculated.

ISSUE:

Does the Cotton Fee apply to non-cotton components of a set which does contain some cotton components?

LAW AND ANALYSIS:

The U.S. Customs Service is charged with implementing over 400 laws and regulations of various Agencies and Departments of the United States Government including collecting the Cotton Fee for the Department of Agriculture, Agricultural Marketing Service, for the Cotton Research and Promotion Program. As promulgated by Department of Agriculture, certain HTSUS classifications of imported cotton and cotton-containing products are subject to the Cotton Fee assessment.

In this case, the article imported is a set composed of cotton and non-cotton components. We assume that the set is classifiable pursuant to General Rule of Interpretation 3(b) or 3(c), HTSUS. Customs e-mail message #3131011 dated May 11, 1993, sets forth the reporting requirements for sets classifiable pursuant to GRI 3(b) or 3(c), HTSUS. In general, the reporting requirements state that the first line describe the entire set which should be marked with a "X." The description should include the set's classification, total value, quantity and charges, duties, taxes and fees associated with the set. Then, on a separate line, each component of the set should be marked with a "V" and be described as if it were separately imported.. Thereafter, the reporting requirements state:

DUTY, MERCHANDISE PROCESSING FEE (MPF), AND HARBOR MAINTENANCE FEE (HMF) WILL BE CALCULATED BASED ON THE "X" LINE. ALL OTHER DUTIES INCLUDING COUNTERVAILING (CVD) AND DUMPING (ADD), FEES, AND TAXES, WILL BE CALCULATED BASED ON THE "V" LINE.

Based on this information, the Cotton Fee does not apply to non-cotton components in a set. The Cotton Fee is applied at the "V" line to cotton components, i.e., those HTSUS provisions which the Department of Agriculture has designated as cotton provisions. Since the belt does not contain cotton and assuming that its "V" line classification is not be listed among the HTSUS provisions to which the Cotton Fee applies, the Cotton Fee would not be assessed It is our opinion that the assessment of the Cotton Fee to components of a set should be performed pursuant to the requirements set forth in e-mail message #3131011.

HOLDING:

The Cotton Fee is applied at the "V" line to cotton components. Since the belt does not contain cotton, the Cotton Fee should not be applied. The assessment of the Cotton Fee to components of a set should be performed pursuant to the requirements set forth in e-mail message #3131011.

Sincerely,

John Durant, Director
Commercial Rulings Division

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