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HQ 558982




March 3, 1995

CLA-2 CO:R:C:S 558982 WAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Diane L. Weinberg, Esq.
Sandler, Travis & Rosenberg, P.A.
505 Park Avenue
New York, N.Y. 10022-1106

RE: Applicability of the partial duty exemption available under subheading 9802.00.80, HTSUS, to trousers subjected to a washing process while abroad; 557195

Dear Ms. Weinberg:

This is in response to your letter dated December 28, 1994, on behalf of your client, Thomson Company, concerning the applicability of the partial duty exemption available under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to trousers subjected to a washing process while abroad and returned to the U.S. A sample of the merchandise was submitted for examination.

FACTS:

Your client proposes to ship U.S.-origin cut fabric components to factories located in the Dominican Republic where they will be assembled into finished woven trousers. After assembly, you state that the trousers will undergo an enzyme wash. The enzyme wash formula involves washing the garments in water with two pounds buffer each side (romene buff 45) and 2 1/4 pounds enzyme each side (romene ax special), and then rewashing the garments in water and 1/2 pound buffer per side (total one pound romene buff 45), 2 1/4 pounds silicone per side (romene soft SL50), and 2 1/4 pounds amine softener per side (romene soft SST). You state that the enzyme wash formula will not include sodium perborate or any other type of bleach. ISSUE:

Whether the trousers which are assembled from U.S.-origin components and washed abroad in an enzyme wash will be entitled to the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:

[a]rticles 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, lubricating and painting.

All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 10.14(a), Customs Regulations {19 CFR 10.14(a)}, states in part that: [t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components.

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides, in part, that:

The assembly operations performed abroad may consist of any method used to join or fit together 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 as illustrated in paragraph (b) of this section. (Emphasis added).

Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. See 19 CFR 10.16(a). For instance, section 10.16(b)(1), Customs Regulations {19 CFR 10.16(b)(1)}, provides that cleaning is an incidental operation. However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c). The Customs Regulations expressly provide that the chemical treatment of components or assembled articles to impart new characteristics, such as shower-proofing, permapressing, sanforizing, dyeing, or bleaching of textiles, is not considered incidental to the assembly process. 19 CFR 10.16(c)(4).

In United States v. Mast Industries, Inc., 515 F. Supp. 43, 1 CIT 188 (1981), aff'd, 69 CCPA 47, 668 F.2d (1981), the court, in considering the legislative history of the meaning of "incidental to the assembly process," stated that:

[t]he apparent legislative intent was to not preclude operations that provide an "independent utility" or that are not essential to the assembly process; rather, Congress intended a balancing of all relevant factors to ascertain whether an operation of a "minor nature" is incidental to the assembly process.

The court then indicated that relevant factors included:

(1) whether the relative time and cost of the operation are such that the operation may be considered minor;
(2) whether the operation is necessary to the assembly process; (3) whether the operation is so related to the assembly that it is logically performed during assembly; and,
(4) whether economic or other practical considerations dictate that the operation be performed concurrently with assembly.

We are satisfied based upon the information and sample submitted that the U.S.-origin components satisfy the requirements of subheading 9802.00.80, HTSUS, and, therefore, are entitled to the duty allowance available under this tariff provision. Sewing two or more pieces of pre-cut fabric together to create trousers is considered an acceptable assembly operation pursuant to 19 CFR 10.16(a).

You maintain that the enzyme wash treatment is to be considered an operation incidental to assembly, because it is analogous to a cleaning operation within the meaning of 19 CFR 10.16(b)(1). You further state that the enzyme treatment gives the garment a softer, smoother feel, but does not substantially change the characteristics or color of the fabric.

Customs has consistently held, pursuant to the regulations above, that operations such as ovenbaking, stone-washing, and bleaching are not incidental to the assembly process, and U.S. components subjected to such an operation are precluded from receiving subheading 9802.00.80, HTSUS, treatment. For example, see Headquarters Ruling Letter (HRL) 027763 dated September 13, 1973, (notwithstanding the question of whether or not trousers were structurally or chemically changed by being treated with synthetic resins before being oven-cured to produce a permanent press, the fact that the trousers were oven-cured introduced new characteristics by a non-assembly process, which did not exist before the heat treatment, i.e., "locking-in" the shape of the trousers, durable pleats and press creases, durable smooth seams, "locked-out" wrinkles, machine washability and dryability, and a fresh appearance without ironing), HRL 555665 dated March 11, 1991, (denim garments, assembled in the Dominican Republic and stonewashed, were ineligible for a duty allowance under subheading 9802.00.80, HTSUS; however, other components such as the buttons, zippers, and thread were eligible for the duty exemption because the stonewashing process was merely incidental to their assembly, and had no effect on their intended function), and HRL 555008 dated March 24, 1989, (U.S.-origin cloth assembled into pants in Mexico and stonewashed, which constituted washing the pants with water and a stone and no detergents or softeners, was precluded from item 807.00, Tariff Schedules of the United States (TSUS) (the predecessor provision of subheading 9802.00.80, HTSUS), treatment, because the process added characteristics that did not exist prior to assembly).

In HRL 554676 dated November 23, 1987, dyed denim fabric was assembled into wearing apparel articles in the Dominican Republic, and then washed in a washing machine. It was stated that the washing not only cleaned the newly assembled garments of dust and dirt but also of the excess dye, which would prevent the dye from running and staining other garments during the first washing. The detergents used in the foreign washing cycle were either plain high strength detergent or high strength detergent containing about 10 percent bleach substance. It was held that washing the textile articles with high strength detergent was a process analogous to cleaning, and considered incidental to assembly; however, washing with a high strength detergent containing a 10 percent bleach was regarded as too substantial to be treated as merely incidental. The bleaching changed the color of the exported fabric, similar to dyeing fabric, and was not considered an incidental operation. In HRL 554232 dated August 25, 1986, bleaching and softening exported fabric was also regarded as too substantial to be treated as merely incidental because there was not only a change in color, but a change in texture as well. See also HRL 557115 dated May 28, 1993 (garments subjected to a "classic wash" process in which sodium perborate, a bleaching agent and disinfectant, was added to the wash cycle was too substantial to be considered an acceptable operation incidental to the assembly process pursuant to subheading 9802.00.80, HTSUS).

The foregoing rulings can be distinguished from HRL 554695 dated June 16, 1989, which held that washing of assembled garments made from U.S.-origin fabricated components abroad with a detergent and fabric softener in hot water without any bleach is a "minor procedure with minimal expense which results in little change in color." We held in HRL 554695 that washing assembled garments with detergent and fabric softener abroad is considered "incidental to assembly" and an allowance in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. components. See also HRL 554497 dated March 18, 1987 (holding that washing assembled garments of U.S.-origin components in a standard detergent and softener, tumble drying, and lightly pressing abroad, are considered operations incidental to assembly as they are minor in nature, related to the assembly, and represent a small portion of the total assembly cost); and HRL 554482 dated March 12, 1987 (holding that washing with an alkaline detergent and fabric softener, drying, and pressing of assembled garments of U.S.-origin components are considered incidental to the assembly operations and an allowance in duty may be made under item 807.00, Tariff Schedules of the United States (TSUS) (the precursor to subheading 9802.00.80, HTSUS), for the cost of value of the U.S. components).

In HRL 557195 dated October 14, 1993, we held that an enzyme wash treatment which contained no bleach was an operation incidental to assembly. In HRL 557195, Customs found that the washing and softening operation was more analogous to a cleaning operation, rather than an operation which adds new characteristics to the garment. Customs distinguished washing operations which contained bleach in the following manner:

Unlike those cases involving washing assembled garments with a detergent containing bleach, as well as ovenbaking and stone-washing, which have been found not to constitute acceptable incidental operations, the addition of an enzyme in fabric softener does not alter the color of the fabric or change its texture. To the extent that there is any color change at all, it is caused by the washing process itself and not the enzyme. In addition, the use of an enzyme fabric softener does not result in a change in the surface composition of the fabric, which usually occurs in situations where a garment is washed with a high strength detergent containing bleach or in a stone-washing operation.

It is our opinion that the facts in the instant case are virtually identical to the facts in HRL 557195. After the garment parts are assembled, they are subject to an enzyme wash treatment which does not contain chlorine bleaching agents, sodium perborate or hydrogen peroxide. As we found in HRL 557195, in the instant case, the addition of the enzyme in the wash formula does not appear to alter the color of the fabric, change its texture, or result in a change in the surface composition of the fabric. Accordingly, washing the assembled U.S.-origin garments parts in the Dominican Republic with an enzyme wash constitutes an operation which is incidental to the assembly of the trousers.

HOLDING:

On the basis of the information and sample provided, it is our opinion that the foreign operations performed to the U.S.-origin cut fabric components which include sewing the components together, and washing in an enzyme wash are considered proper assembly operations and operations incidental to the assembly process. Therefore, the imported trousers may be entered under subheading 9802.00.80, HTSUS, 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.

Sincerely,

John Durant, Director

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