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HQ 559899




September 16, 1996

MAR-02 RR:TC:SM 559899 MLR

CATEGORY: MARKING

Mr. Steven C. Karp
Rik-H„mmerle, USA
470 Seventh Avenue
New York, NY 10018

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to blazers made with lining fabrics; 19 CFR 10.25

Dear Mr. Karp:

This is in reference to your letter of May 8, 1996, forwarded to us from Customs in New York, requesting a ruling concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to blazers made with certain lining fabric.

FACTS:

It is stated that Rik H„mmerle, USA, is a converter of lining fabrics. The company plans to import greige goods woven in Lithuania. In the U.S., you plan to dye, finish, and inspect the fabric, and sell the lining to a U.S. manufacturer of ladies' blazers. It is stated that the U.S. manufacturer will cut the lining, along with shell fabric (believed to be of U.S. origin) in Miami, Florida, and export these cut components for assembly into a blazer in a Caribbean country.

ISSUE:

Whether the ladies' blazers assembled in a Caribbean country using lining fabric imported from Lithuania and cut-to-shape in the U.S. will qualify for 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).

The rules of origin for textile and apparel products, 19 U.S.C. 3592(b)(4), codifying section 334(b)(4)(A) of the Uruguay Round Agreements Act, provides that:

[t]he value of a component that is cut to shape (but not to length, width, or both) in the United States from foreign fabric and exported to another country, territory, or insular possession for assembly into an article that is then returned to the United States --

(i) shall not be included in the dutiable value of such article.

The effect of 19 U.S.C. 3592(b)(4) is to preserve the tariff treatment afforded by subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), that otherwise would no longer be available under the section 334 origin rules since cutting fabric in the U.S. will no longer result in the cut fabric being considered a "product of" the U.S.

Section 10.25, Customs Regulations (19 CFR 10.25), implements 19 U.S.C. 3592(b)(4), and incorporates by reference the same operational, valuation, and documentation requirements applicable to goods entered under subheading 9802.00.80, HTSUS. Therefore, imported goods entitled to a duty allowance under 19 CFR 10.25 are to be entered under subheading 9802.00.8065, HTSUS, and, solely for purposes of calculating the duty allowance under this subheading, Customs will treat the textile components cut to shape in the U.S. from foreign fabric as if they were "U.S. fabricated components."

In this case, Lithuanian lining fabric within the definition of 19 CFR 102.21(b)(5) is imported into the U.S. where it is cut to the shape of blazer components. It is also stated that the cut lining fabric and shell fabric components, also cut in the U.S., are exported to a Caribbean country for assembly into ladies' blazers. For purposes of this ruling request, we are presuming that the operations performed in the Caribbean country on the lining components conform to the requirements and examples set forth in 19 CFR 10.16. Accordingly, notwithstanding that the Lithuanian lining fabric cut to shape in the U.S. is not a "product of" the U.S., the blazer made with the Lithuanian lining components in a Caribbean country may qualify for the partial duty exemption provided for in subheading 9802.00.8065, HTSUS. We note that whether the shell fabric cut-to-shape in the U.S. was woven in the U.S. or not, will not affect this determination.

Additionally, please note that the marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported in the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

For garments, the general rules set forth in paragraphs (c)(1) through (5) of section 102.21, Customs Regulations, which implement section 334 of the Uruguay Round Agreements Act will be used to determine the country of origin for country of origin marking purposes. See 60 FR 46188 (September 5, 1995). As the blazers in this case are not wholly obtained or produced in a single country, territory, or insular possession, 19 CFR 102.21(c)(1) is not applicable.

Section 102.21(c)(2), Customs Regulations {19 CFR 102.21(c)(2)}, provides:

[w]here the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

For purposes of this ruling, we are assuming that the ladies' blazers are classified under heading 6204, HTSUS.

The rule set forth under paragraph (e) for products classifiable under heading 6204, provides:

6201-6208 (1) If the good consists of two or more components parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession....

Based upon the information provided, the blazers satisfy the rule in section 102.21(e) for 6201-6208(1) because the blazers each consist of two or more component parts, and the component parts are changed to an assembled good of heading 6204, as a result of being wholly assembled in a Caribbean country. Accordingly, pursuant to 19 CFR 102.21, the country of origin of the ladies' blazers for country of origin marking purposes will be the appropriate "Caribbean country."

Please note that section 134.43(e), Customs Regulations (19 CFR 134.43(e)), provides that:

[w]here an article is produced as a result of an assembly operation and the country of origin of such article is determined under this chapter to be the country in which the article was finally assembled, such article may be marked, as appropriate, in a manner such as the following:

(1) Assembled in (country of final assembly); (2) Assembled in (country of final assembly) from components of (name of country or countries of origin of all components); or
(3) Made in, or product of, (country of final assembly).

See 61 FR 28936 and 28957. Therefore, since the blazers will be produced as a result of an assembly operation and the country of origin of such garments is determined under 19 CFR 102.21 to be the appropriate "Caribbean country," the garments may be marked "Assembled in (or "Made in" or "Product of") [the Caribbean country]." Please note, however, that although the lining fabric is cut-to-shape in the U.S., the lining fabric will not be considered a U.S. component.

HOLDING:

On the basis of the information submitted, ladies' blazers assembled in a Caribbean country using lining fabric imported from Lithuania and cut-to-shape in the U.S. will qualify for the partial duty exemption available under subheading 9802.00.8065, HTSUS, when returned to the U.S. The country of origin for marking purposes will be "Caribbean country" pursuant to 19 CFR 102.21(c)(2), and the blazers may be marked "Assembled in (or "Made in" or "Product of") [the Caribbean country]" pursuant to 19 CFR 134.43(e). The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 177.9(b)(1), Customs Regulations {19 CFR 177.9(b)(1)}. This section States that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2). A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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
Tariff Classification Appeals

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