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NY A81855

APRIL 4, 1996

CLA-2-62:RR:NC:WA:358 A81855

CATEGORY: CLASSIFICATION

TARIFF NO.: 6204.42.3060; 9802.00.9000; 9802.00.8055; 9802.00.8065

Mr. Dennis Heck

Tower Group International

2400 Marine avenue

Redondo Beach, CA 90278-1103

RE: The tariff classification and 9802 eligibility of girls' dresses from Mexico

Dear Heck:

In your letter dated March 22, 1996, you requested a classification ruling on behalf of your client May Apparel.

Four identical dresses are submitted with the request. The dresses, style number 86-4406, are included for illustrative purposes only. They have princess styling, puffed short sleeves and mock bolero type panels at the bodice. The dresses are made of woven cotton printed fabric and are sized 7-16.

The applicable subheading for the girls' dresses will be 6204.42.3060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for girls' dresses, of cotton, other, other.

May Apparel exports U.S. formed and cut dress components (made from both U.S. and foreign fabric) and appliques (die cut in the U.S. from both U.S. and foreign fabric) to Mexico to be assembled and embroidered and/or appliqued.

Two types of embroidery operations are proposed. Embroidery only operations and embroidery with applique operations. Both embroidery operations will use U.S. made pellon backing. After completion of embroidery and appliquework, the pellon backing is removed in Mexico or the U.S.

The embroidery only operation is as follow:

1. The U.S. formed and cut garment components or fabric pieces (yoke, bodice, collar, etc.) and the U.S. made pellon backing are placed into an embroidery hoop. (Pellon backing was used to stabilize the fabric while the stitches are being formed in the embroidery process, to ensure that the thread does not become entangled in the embroidery machine, and to also prevent the embroidery stitch from unraveling.)

2. The embroidery hoop (with U.S. formed and cut garment components or fabric pieces and the U.S. made pellon backing) is placed into an embroidery machine and the design is stitched using non-U.S. thread. This process causes two layers of fabric to be assembled - the garment components or fabric pieces and the pellon backing.

The embroidery/applique operation is as follows:

1. The U.S. formed and cut garment components or fabric pieces (yoke, bodice, collar,etc.) and the U.S. made pellon backing are placed into an embroidery hoop.

2. The embroidery hoop (with the U.S. formed and cut garment components fabric pieces, U.S. formed and cut applique and the Mexican pellon backing) are placed in an embroidery machine and the pellon backing is stitched, with non-U.S. thread, onto the fabric piece in the shape of the applique to hold the pellon backing during the embroidery operation. The U.S. formed and cut applique (from both U.S. and foreign fabric) is then ironed or glued onto the fabric piece. The embroidery machine is restarted and the embroidery is stitched with thread, around the perimeter of the applique. This process causes three layers of fabric to be assembled- the applique, the garment component or fabric piece, and the pellon backing.

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 HTSUS subheading 9802.00.80 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 value of the imported assembled article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentary requirements of 19 C.F.R. §10.24.

On the basis of the information and sample submitted, the embroidery/applique operation used to join the garment components and the pellon together is considered an acceptable assembly operation. However, the removal of the pellon backing, in Mexico, is not incidental to the embroidery operation. Therefore, the garments subjected to the embroidery operation may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components (except the pellon backing), provided the documentary requirements of 19 C.F.R. §10.24 are satisfied and the garments otherwise qualify for subheading 9802.00.80, HTSUS, treatment.

One of the special provisions contained in Annex 300-B of the North American Free Trade Agreement ("NAFTA") is Appendix 2.4, which provides for the elimination of customs duties on textile and apparel goods that are assembled in Mexico from fabrics wholly formed and cut in the U.S. To implement this provision, a new tariff item was created in subheading 9802.00.90, HTSUS.

Subheading 9802.00.90, HTSUS, provides as follows:

Textile and apparel goods, assembled in Mexico in whole of
fabrics wholly formed and cut in 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;
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 subject dresses are "textiles and apparel goods" for purposes of determining its eligibility under subheading 9802.00.90, HTSUS. Since the operations performed in Mexico in connection with the fabric components, except for removal of the pellon backing, are acceptable assembly operations or operations incidental to such assembly, the imported dresses (except for the pellon backing removed in Mexico), will qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided all such components are cut and formed in the U.S.

Cotton dresses fall within textile category designation 336. Based upon international textile trade agreements products of Mexico are subject to quota and the requirement of a visa. They will not be subject to quota or visa requirements if they qualify as "Special Regime" products, Subheading 9802.00.90, HTSUS.

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.

Dresses qualifying for Subheading 9802.00.9000, HTSUS, are free of duty, upon compliance with applicable laws and regulations.

Dresses qualifying for Subheading 9802.00.8055, HTSUS, are eligible for duty at the reduced rate of 6.6 per cent ad valorem, up to the annual quantities specified Subdivision (g)(ii), Additional Note 3(c), Section XI, HTSUS. Dresses imported in quantities exceeding these specified limits are dutiable at 11.8 per cent ad valorem, in accordance with Subheading 9802.00.8065, HTSUS.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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 * at 212-466-*.

Sincerely,


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See also:

• Tariff No.: 6204.42.30 - Women's or girls' dresses, not knitted or crocheted, of cotton, nesoi
• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9802.00.90 - Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, etc.