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HQ 560649




December 9, 1997

CLA-2 RR:TC:SM 560649 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Port Director
U.S. Customs Service
797 S. Saragosa Rd.
El Paso, Texas 79907

RE: Application for Further Review of Protest No. 2402-96-100013; Denial of duty exemption under HTSUS subheading 9802.00.90 to toys for pets; Special Regime; findings; trimmings; polyester stuffing; Mexico

Dear Madam:

This is in reference to a protest and application for further review filed by Rudolph Miles & Sons, Inc. on behalf of MFI International, Inc., ("MFI"), contesting the denial of the duty exemption under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS), to toys for pets.

FACTS:

It is indicated that MFI imported toys for pets from Mexico under subheading 9802.00.90, HTSUS, on December 14, 1995. The entry was liquidated in April 1996, and the protest was timely filed on May 7, 1996. Your office contends that the toys are classifiable under subheading 6307.90.75, HTSUS, as the toys were filled with 100 percent polyester stuffing that was not of U.S. origin.

ISSUE:

Whether toys for pets filled with 100 percent polyester stuffing of foreign origin are eligible for duty-free entry 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 (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 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.

The initial question is whether the subject toys for pets are considered "textile and apparel goods" under subheading 9802.00.90, HTSUS. The alternative classification of the toys for pets as stated by your office is subheading 6307.90.75, 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 63 of Appendix 1.1 includes among such goods "6307.90 Made up articles, of textile materials, nes, including dress patterns"). Therefore, the toys for pets qualify as "textile and apparel goods" eligible for duty-free treatment under subheading 9802.00.90, HTSUS.

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 assembled in Mexico, which previously were eligible for entry under the Special Regime Program administered under U.S. tariff item 9802.00.8010, HTSUS, it is Customs view that all of the policy directives implementing this program should be considered applicable in 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 FR 15726 (May 3, 1988).

Your office states that because the 100 percent polyester stuffing is of foreign origin and is not a finding or trimming, that the toys for pets should be classified under subheading 6307.90.75, HTSUS. Your office refers to Headquarters Ruling Letter (HRL) 559552 dated February 14, 1996, and HRL 559738 dated July 2, 1996. In HRL 559552, we found that shoulder pads and sleeve headers were not findings or trimmings, and that jackets made with foreign shoulder pads and sleeve headers were excluded from subheading 9802.00.90, HTSUS, treatment. The sleeve header was sewn between the shell fabric and the lining fabric along the outside shoulder seam where the sleeve joined the body of the garment and was designed to provide fullness along the seam to enhance the appearance of the jacket at the point where the sleeve met the shoulder. In HRL 559738, we held that shoulder pads, sleeve headers, chest pieces, and synthetic suede yokes and elbow patches were not "findings or trimmings" and that jackets made with such foreign components were excluded from subheading 9802.00.90, HTSUS, treatment.

MFI contends that the polyester stuffing is not a "fabric" as that term is used in subheading 9802.00.90, but rather is a "fiber". MFI also contends that a good may still be eligible for subheading 9802.00.90, HTSUS, treatment even if the good assembled in Mexico is composed of materials other than fabric, "findings", or "trimmings." MFI cites HRL 558708 dated June 14, 1995, where Customs considered scarves with heatable plastic packs made from U.S.-origin fabric components, rolls of velcro material, and energy packs comprised of plastic sheeting filled with a silica sand and paraffin wax substance. The velcro material rolls and energy packs were manufactured in the U.S. It was held that since the operations performed in Mexico in connection with the fabric components were acceptable assembly operations or operations incidental to assembly, the imported heatable scarves with energy packs qualified for duty-free treatment under subheading 9802.00.90, HTSUS, provided all such components were cut and formed in the U.S.

In HRL 557875 dated May 4, 1995, Customs considered whether soft-sided luggage assembled in Mexico was eligible for duty-free treatment under subheading 9802.00.90, HTSUS. The luggage was assembled, in part, using non-fabric components including metal frames, metal or plastic wheels, metal handle rings, metal rivets, plastic webbing, vinyl washers, and wood bases of both U.S. and foreign manufacture. Despite these non-U.S. origin components, it was held that the luggage was eligible for subheading 9802.00.90, HTSUS, treatment. See also HRL 559961 dated March 3, 1997, where Customs held that motor vehicle safety belts made with certain non-textile components, such as frames, supports, etc. of U.S. and foreign manufacture were eligible for subheading 9802.00.90, HTSUS, treatment. We also note that in HRL 559552 and HRL 559738, the foreign articles considered, i.e., the shoulder pads, sleeve headers, etc. were foreign and were either considered fabric themselves or composed of fabric components as to require analysis whether they were findings or trimmings.

Accordingly, based upon HRL 557875 and HRL 559961, in order to be eligible for 9802.00.90, textile and apparel articles must not necessarily be wholly made of U.S.-origin fabric components or foreign findings and trimmings up to 25 percent of the cost of the components of the assembled product, but may incorporate a component that is neither a fabric nor a foreign-origin finding or trimming. This is also consistent with Presidential Proclamation No. 6821 of September 12, 1995, which modified subheading 9802.00.90, stating that Presidential Proclamation No. 6641 of December 15, 1993, which established subheading 9802.00.90, inadvertently narrowed this tariff provision to only allow duty-free entry to textile and apparel goods assembled in Meixco "in whole of fabrics wholly formed and cut" in the U.S. Therefore, the next question is whether the 100 percent polyester stuffing is considered a "fabric".

In HRL 089387 dated August 30, 1991, polyester staple fiber was found to be classifiable under subheading 5503.20.0000, HTSUS, and in New York Ruling Letter 860936 dated March 11, 1991, it was held that 100 percent polyester stuffing to fill toys was also classifiable under subheading 5503.20.00, HTSUS. Accordingly, we find that the 100 polyester stuffing at issue in this case will be classifiable under subheading 5503.20.00, provided your office verifies that it is not carded, combed or otherwise processed for spinning. Heading 5503 provides for synthetic staple fibers. "Fabric" is defined as any cloth produced by joining fibers as by knitting, weaving, or felting". New College Edition, The American Heritage Dictionary 468 (1976). "Fiber" is defined as any slender, elongated structure; a filament or strand", or "a natural or synthetic filament, as of cotton or nylon, capable of being spun into year", or "material made of such spun filaments." Id. Therefore, we conclude that the 100 percent polyester stuffing is not a fabric. We also find that it is not a "finding" or a "trimming", and no claim thereto has been made by MFI.

Furthermore in this regard, under subheading 9802.00.90, as distinguished from 9802.00.80, HTSUS, it is noted that the new statute only requires that all fabric components be formed and cut in the U.S., and that only such components be exported from the U.S. in condition ready for assembly without further fabrication. 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.

Pursuant to section 10.16(a) of the Regulations (19 C.F.R. ?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. Under 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.

In HRL 555459 dated July 12, 1990, Customs held that creating baby toys by sewing pre-cut pieces of terry cloth together and stuffing polyester material into the form were considered acceptable assembly operations. Your office also acknowledged that the toys were assembled in Mexico and otherwise would qualify for 9802.00.90, HTSUS, treatment, but for the fact that the toys were made using polyester stuffing of foreign origin. As we find that the 100 percent polyester stuffing is not a fabric, but rather is a fiber, we find that the toys for pets are eligible for duty-free entry under subheading 9802.00.90, HTSUS.

HOLDING:

As subheading 9802.00.90 only requires that any fabric (i.e., woven and cut in the U.S.) used in the assembly of the textile and apparel article in Mexico be of U.S. origin or be considered a finding or trimming, and the 100 percent polyester is not a fabric, but a fiber, the toys for pets filled with such stuffing will not be excluded from subheading 9802.00.90, HTSUS, treatment. Therefore, the protest should be granted.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, Subject: Revised Protest Directive, this decision should be attached to Customs Form 19, Notice of Action, and be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the
decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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