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HQ 559560





March 20, 1996

CLA-2 RR:TC:SM 559560 KBR

CATEGORY: CLASSIFICATION

Mr. Jerry Papkoff
Barinco International Corp.
5777 West Century Blvd., Suite 990
Los Angeles, CA 90634

RE: Eligibility of jewelry from the Dominican Republic for duty-free treatment under U.S. Note 2(b), Subchapter II, Chapter 98, HTSUS.

Dear Mr. Papkoff:

This is in response to your letter of November 16, 1995, on behalf of Oroamerica Inc., regarding the eligibility for duty-free treatment of jewelry to be produced in the Dominican Republic, pursuant to Section 222 of the Customs Trade Act of 1990 (Public Law 101-382), which amended U.S. Note 2, Subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States (HTSUS), ({hereinafter "Note 2(b)"). Samples were submitted with your request.

FACTS:

The articles at issue are link jewelry, rope chain and bangles. You state that the links, rope chain, pieces for the bangle, and solder paste used to produce the jewelry in the Dominican Republic, are made in the U.S.

The links are small circular items with a tiny opening at one end. In the Dominican Republic the links are woven together with other links to make a rope chain. Solder paste is used to connect the links. This continuous rope chain is sent to the U.S. where it is cleaned, cut to length and a clasp is attached.

The second item, the machine rope, is sent to the Dominican Republic for soldering only, then returned to the U.S. for cleaning, cutting to length and attachment of clasps. The graduated rope chain is created by combining three different gauges of rope chain. The three gauges are cut to length, assembled and soldered in the Dominican Republic. This is then sent to the U.S. where it is cleaned, finished and a lock is attached.

The bangles are comprised of a snap, hinge, shell and tongue. They are assembled and soldered in the Dominican Republic. The attachment to your letter also discussed "oval patent tags" and "wax molds". Since your letter only requested a ruling on links, rope chain and bangles, this ruling does not encompass the oval patent tags or wax molds.

ISSUES:

Whether the jewelry assembled in the Dominican Republic is eligible for duty-free treatment under Note 2(b).

LAW AND ANALYSIS:

Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, Subchapter II, Chapter 98, HTSUS, to provide for the duty-free treatment of articles (other than textile and apparel articles, and petroleum and petroleum products) which are assembled or processed in a Caribbean Basin Economic Recovery Act (CBERA) beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin.

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.

To qualify for Note 2(b) duty-free treatment, an eligible article must be assembled or processed in a BC entirely of components or ingredients that are a "product of" the U.S. As used in this paragraph, the term "beneficiary country" means a country listed in General note 7(a), HTSUS, which includes the Dominican Republic.

Regarding the operations performed in the Dominican Republic, although Note 2(b)(i)(A) and (B) are separated by the word "or", it is our opinion that Congress did not intend to preclude free treatment under this provision to an article which is created in a BC both by assembling and processing U.S. fabricated components and by processing U.S. ingredients. In HRL 556487 dated April 1, 1992, footwear uppers and socks were manufactured in the Dominican Republic using materials which originated entirely in the U.S. The uppers and socks were shipped to Puerto Rico directly from the Dominican Republic where, in some instances, they were manufactured into completed footwear. We held that the footwear uppers and socks were eligible articles under Note 2(b), and could enter duty-free pursuant to Note 2(b), provided the documentation requirements set forth in Headquarters telex 9264071 dated September 28, 1990, were satisfied. See e.g. HQ 555716 (April 15, 1991)(involving jewelry imported pursuant to the Caribbean Basin Initiative).

Similarly, in this case, it is our opinion that the assembly and processing of the links, rope chains, and bangles constitute the type of operations contemplated by Note 2(b). Therefore, if all of the materials shipped directly from the U.S. to the BC are of U.S. origin and the completed jewelry pieces are shipped directly to the U.S. without entering into the commerce of any foreign country other than a BC, these articles will be entitled to duty-free treatment under Note 2(b), assuming all documentation requirements are met.

HOLDING:

The links, rope chains, and bangles, assembled entirely from U.S. materials in the Dominican Republic and imported into the U.S. to be used in the manufacture of finished jewelry may enter the U.S. duty-free pursuant to Note 2(b), provided the direct shipment requirements and the documentation requirements set forth in Headquarters telex 9264071 dated September 28, 1990, are satisfied.

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.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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