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HQ 558708




June 14, 1995

CLA-2 R:C:S 558708 AT

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Teresa A. Gleason, Esq.
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

RE: Applicability of subheading 9802.00.90, HTSUS, to scarves with heatable plastic packs; Special Regime Program; Article 509; assembly

Dear Mrs. Gleason:

This is in reference to your letter dated August 19, 1994, on behalf of R.G. Barry Corporation ("RG Barry"), requesting a ruling that certain scarves with heatable plastic packs ("energy packs") to be imported from Mexico will be eligible for duty-free treatment under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS). We regret the delay in responding.

FACTS:

R.G Barry exports fabric components (consisting of cut-to-shape pieces of polyester fabric measuring approximately 55" x 9" and non fabric components (rolls of velcro material that are approximately 1" wide and energy packs comprised of plastic sheeting filled with a silica sand and paraffin wax substance), to Mexico to be used in the assembling of heatable scarves. The heatable scarves are designed to be used by an individual during the colder months of the year, in the same manner as a traditional scarf. The energy pack is designed to be placed in a microwave oven for a certain period of time and heated. Thereafter, the pack will retain and radiate heat for a number of hours.

You state that the fabric is "wholly formed" in the U.S. and will be cut-to-shape (i.e., cut to length and width, and cut with fringes at the ends) in the U.S. The velcro material rolls and energy packs will also be manufactured in the U.S. and shipped to Mexico. According to your submission, the assembly process for the scarf with its energy pack is as follows: 1) The U.S. origin cut-to-shape fabric will be folded in half along its length. Thereafter, the material will be stitched widthwise approximately 17" from one end. The operator will then turn the material 90 degrees and stitch up the length of the scarf for approximately 20" to close this portion of the side of the scarf. This will complete the stitching of the scarf and leave a "pocket" into which the energy pack will later be inserted.

2) The U.S. origin velcro material will be unspooled from the rolls and cut to length, creating velcro pieces that are approximately 1" square. The operator will stitch a velcro piece to one side of the interior surface of the scarf, just above the open end of the pocket. A mating piece of velcro will then be positioned directly opposite the first piece and stitched into place.

3) The U.S. origin energy pack will be inserted into the pocket and secured therein by pressing the velcro pieces together.

4) The resulting scarf with its energy pack will be packaged for retail sale and exported from Mexico into the United States.

You assert that the subject scarves with energy packs imported from Mexico are eligible for duty-free treatment under item 9802.00.80, HTSUS, "NAFTA Special Regime Program".

ISSUE:

Whether the heatable scarves with energy packs will be eligible for duty-free treatment under subheading 9802.00.90, HTSUS, upon importation into the U.S.

LAW AND ANALYSIS:

Annex 300-B of the North American Free Trade Agreement ("NAFTA") is applicable to textile and apparel goods. Appendix 2.4 of Annex 300-B provides that:

[o]n January 1, 1994, the U.S. shall eliminate customs duties on textiles and apparel goods that are assembled in Mexico from fabrics wholly formed and cut in the United States and exported from and reimported into the United States under: (a) U.S. tariff item 9802.00.80.10; or

(b) Chapter 61, 62, or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing.

Thereafter, the U.S. shall not adopt or maintain any customs duty on textile or apparel goods of Mexico that satisfy the requirements of subparagraph (a) or (b) or the requirements of any successor provision to U.S. tariff item 9802.00.80.10.

Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:

Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in 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; provided the goods classifiable in chapters 61, 62, or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein.

"Textile and Apparel Goods"

The initial question we must address is whether the subject scarf with energy pack is considered a "textile and apparel good" under subheading 9802.00.90, HTSUS.

"Textile and apparel goods" eligible for duty-free treatment under subheading 9802.00.90, HTSUS, are listed in Appendix 1.1 of Annex 300-B of the NAFTA. Chapter 62 of Appendix 1.1 includes among such goods "6214.30 (shawls, scarves, veils and the like, of synthetic fibers, not knitted or crocheted)". Thus, the subject scarf will qualify as a "textile and apparel good" if it is classified under subheading 6214.30.00, HTSUS, and is not knitted or crocheted. After inspection of the submitted sample, we find that the article is a scarf made up of synthetic fibers which are not knitted or crocheted, and is classifiable under subheading 6214.30.00, which provides in part for "shawls, scarves, mufflers, mantillas, veils and the like of synthetic fibers ..". Therefore, the subject scarf is a "textile and apparel good" eligible for duty-free treatment under subheading 9802.00.90, HTSUS. FABRICATION AND ASSEMBLY

Since subheading 9802.00.90, HTSUS, was intended as a successor provision to subheading 9802.00.80, HTSUS, with respect to certain textile and apparel goods assembled in Mexico, the regulations under subheading 9802.00.80, HTSUS, may be instructive in determining whether a good is eligible for the beneficial duty treatment accorded by subheading 9802.00.90, HTSUS. (In this regard, however, as distinguished from subheading 9802.00.80, HTSUS, it is noted that the new statute requires only that all fabric components be formed and cut in the U.S., and that only such components need be exported from the U.S. in condition ready for assembly without further fabrication.)

Under section 10.14(a), Customs Regulations (19 CFR 10.14(a)), components will not lose their entitlement to the benefits of subheading 9802.00.80, HTSUS, by being subjected to operations incidental to the assembly before, during, or after the assembly with other components. Pursuant to section 10.16(a) of the Regulations (19 CFR 10.16(a)), the assembly operations performed abroad may consist of any method used to join or fit solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners, and may be preceded, accompanied, or followed by operations incidental to the assembly process. Examples of operations incidental to the assembly process include trimming, filing, or cutting off of small amounts of excess materials, and cutting to length of wire, thread, tape, foil and similar products exported in similar length. (19 CFR 10.16(b)(4) and

In the instant case, the sewing operations used to join the fabric components to make the scarf body are acceptable assembly operations. See, L'eggs Products, Inc v. United States, 704 F. sup. 1127, 1134 (CIT 1989) (the joining of fabric and thread constitutes and assembly of two separate components).

Accordingly, the heatable scarves with energy packs that are assembled in Mexico may be entered free of duty, provided all fabric components are wholly formed (i.e., the fabric is woven or milled in the U.S.) and cut in the U.S.

HOLDING:

1) Heatable scarves with energy packs made up of synthetic fibers which are not knitted or crocheted, are classifiable under subheading 6214.30.00, which provides in part for "shawls, scarves, mufflers, mantillas, veils and the like of synthetic fibers ..". Therefore, the subject scarves are considered to be "textiles and apparel goods" for purposes of determining its eligibility under subheading 9802.00.90, HTSUS. 2) Since the operations performed in Mexico in connection with the fabric components are acceptable assembly operations or operations incidental to such assembly, the imported heatable scarves with energy packs will qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided all such components are cut and formed in the U.S.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. 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,

John Durant, Director

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