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NY D82643




October 6, 1998

CLA-2-RR:NC:TA:N3:358 D82643

CATEGORY: CLASSIFICATION

TARIFF NO.:6110.20.2075

Mr. Michael R. Doram
CRESKOFF & DORAM LLP
1028 North Lake Avenue Suite 202
Pasadena, California 91104

RE: Classification, country of origin determination and applicability of 9802.00.80 partial duty exemption for girl's knit pullover; 19 CFR 102.21(c)(2), 19 CFR 10.16(c)

Dear Mr. Doram:

This is in reply to your letter dated September 17, 1998, on behalf of your client, requesting a tariff classification, country of origin determination and applicability of 9802.00.80, partial duty exemption for a girl's cotton knit pullover, Style 10398, which will be imported into the United States.

FACTS:

The subject sleeveless pullover is made of finely knit cotton jersey fabric. It features rib knit fabric with picot edging at the neckline and armhole openings, and a hemmed bottom. An embroidered name, approximately 1 and 1/2 inches wide by 1/4 inches high is embroidered to the right front chest area. The submitted sample is a size medium, which according to the sewn fabric label is intended for wear by a young girl, ages 3 to 4.

The manufacturing operations for the sleeveless pullover, according to your submission, are as follows:

The merchandise is made from knitted cotton jersey fabric which is manufactured in the United States. The fabric is cut from rolls in the U.S and then cut into specific shapes and patterns constituting the front and back panels of a child's T-shirt.

The panels are shipped to El Salvador where assembly operations take place. Also shipped to El Salvador are rolls of ribbed cotton fabric which are used to make the neckband and armholes. For purposes of this reply, we assume the rolls of ribbed fabric are cut to length only and are not also cut to width. Also shipped to El Salvador, according to a telephone conversation with you on October 5, 1998, is cut-to-shape pellon backing.

In El Salvador, picot edging is added to the ribbed fabric, completing the neckband and armholes. The trademarked name of the customer is then embroidered to the front panel and cut-to- shape pellon backing in one operation. Finally, the goods are cleaned, inspected and packed for shipment to the United States.

ISSUE:

What is the classification, country of origin, and applicability of the 9802.0080 partial duty exemption of the subject merchandise?

CLASSIFICATION:

The applicable subheading for the girl's cotton knit sleeveless pullover, Style 10398, will be 6110.20.2075, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for sweaters, pullovers and similar articles, knitted or crocheted, of cotton, other, other, women's or girls'. The rate of duty will be 19 per cent ad valorem.

Girls' cotton knit pullovers fall within textile category designation 339. The designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes. To obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where 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 of the foreign materials 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:"

Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section":

HTSUSA Tariff shift and/or other requirements

6101-6117 If the good is not knit shape and consists of two or more component parts, a change to an assembled good of heading 6101 through 6117 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession

Accordingly, as the subject merchandise undergoes assembly operations in El Salvador, it qualifies as "wholly assembled" in a single country. As such, Section 102.21(c)(2) is applicable.

APPLICABILITY OF 9802.00.80 - LAW AND ANALYSIS:

At issue is whether the embroidery stitching to the front shirt panel and pellon backing, and the separate picot edging stitching applied to the ribbed fabric at the neckband and armhole constitute operations incidental to the assembly process as provided for in 19 CFR 10.16(b).

Subheading 9802.00.80, HTSUSA, 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, HTSUSA, 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 that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, lamination, sewing, or the use of fasteners.

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. 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, HTSUSA, to that component. See, 19 CFR 10.16(c).

Under the facts presented, we find that the picot edging stitching applied to the rib knit fabric serves only as decoration, and as such, renders this component ineligible for a partial duty exemption under subheading 9802.00.80, HTSUSA. The rib knit fabric rolls have been advanced in value and improved in condition as a result of the application of the picot edging stitching.

Because the embroidery stitching will be used to join the front shirt panel and the pellon backing together, it is an acceptable assembly operation within the meaning of subheading 9802.00.80 HTSUSA.

HOLDING:

On the basis of the information submitted, the picot edging operation is not considered an acceptable assembly operation and the rib knit fabric rolls are ineligible for a partial duty allowance under subheading 9802.00.80, HTSUSA.

The remaining shirt components, including the cut-to-shape front and back shirt panels and the cut-to-shape pellon backing are eligible for a partial duty allowance under subheading 9802.00.80, HTSUSA.

The country of origin of the girl's pullover, Style 10398, is El Salvador. Based upon international textile trade agreements products of El Salvador are not currently subject to quota or the requirements of a visa.

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 19 CFR 177.9(b)(1). This sections states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Bruce Kirschner at 212-466-5865.

Sincerely,

Robert B. Swierupski
Director,

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