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HQ

559794

June
3, 1996

CLA-2 RR:TC:SM 559794 BLS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Port Director
9 North Grand Avenue
Nogales, AZ 85621

RE: Request for internal advice; applicability of subheading 9802.00.90,
HTSUS, to women's and men's jackets; textile drawstring cord; findings;

Dear Sir:

This is in reference to your letter dated April 4, 1996, requesting internal advice concerning the applicability of subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS), to certain women's and men's jackets imported from Mexico.

FACTS:

You state that the jacket shell, lining and fusibles are all wholly formed (i.e., woven) and cut in the U.S. with the exception of a textile drawstring cord which is formed in Canada. The components are sent to Mexico where they are sewn together to complete the garment. The finished garment is currently imported into the U.S. duty-free under subheading 9802.00.90, HTSUS.

ISSUE:

Whether the textile cord drawstring is a "finding or trimming" for purposes of determining whether the garments are eligible for duty-free treatment under subheading 9802.00.90, HTSUS.

LAW AND ANALYSIS:

Appendix 2.4 of Annex 300-B of the NAFTA, provides that:

[o]n January 1, 1994, the U.S. shall eliminate customs duties
on textile 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 and 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, provided that such fabric components, in whole or in part, (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 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 that 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.

In view of the fact that the enactment of subheading 9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods which previously were eligible for entry under the Special Regime Program, it is Customs view that all of the policy directives implementing this program should be considered applicable for the administration of subheading 9802.00.90, HTSUS. One such policy under the Special Regime Program included the allowance of "findings, trimmings, and certain elastic strips of foreign origin" to be incorporated into the assembled good "provided they do not exceed 25 percent of the cost of the components of the assembled product." Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, "bow buds", lace trim, zippers, including zipper tapes, and labels. See 53 Fed. Reg. 15726 (May 3, 1988).

The exception for findings, trimmings, etc., under the Special Regime Program, was necessarily intended to be of a restrictive nature, as the intent of the statute was to ensure that all fabric components be formed and cut in the U.S. In this regard, it is noted, for example, that the exception for foreign-origin elastic strips was limited to strips of less than one inch in width. This exception applied to brassiere straps only, and thus could not be used for a more substantial component, such as waistbands, which are in excess of one inch in width.

While "findings and trimmings" for purposes of the Special Regime Program are not specifically defined, the examples set forth above, such as thread, lace trim and labels (as well as elastic trim less than one inch in width), are indicative of the types of components which may be considered exceptions to the requirement that all fabric components be formed and cut in the U.S. In this regard, we have previously held that fabric items such as shoulder pads, sleeve headers, and velveteen collars are not "findings or trimmings." See Headquarters Ruling Letter (HRL) 559552 dated February 14, 1996, and HRL 558954 dated June 30, 1995.

In our view, the textile drawstring cord is not analogous to the examples of "findings and trimmings" such as sewing thread, hooks and eyes, snaps and buttons, set forth in the policy directive, which are generally essential in constructing the garment. Therefore, since the textile drawstring cord is a fabric component and is not wholly formed and cut in the U.S., the jackets to which they are assembled are excluded from subheading 9802.00.90, HTSUS, treatment, upon return to the U.S.

HOLDING:

A textile drawstring cord used in the assembly of men's and women's jackets is not considered a "finding" or "trimming". Since the drawstring cord is a fabric component and is not wholly formed and cut in the U.S., the men's and women's jackets are ineligible for duty-free treatment under subheading 9802.00.90, HTSUS, upon return to the U.S.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs
personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels 60 days from the date of this decision.

Sincerely,

John

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