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` HQ 960892


December 21, 1999

CLA2 RR:CR:TE 960892 SG

CATEGORY: CLASSIFICATION

Mr. Steve S. L. Siu c/o Timeamerica, Inc.
1458 W. 240th Street
Harbour City, CA 90710

RE: Country of origin determination for a baseball cap; Caribbean Basin Economic Recovery Act; 19 CFR 102.21

Dear Mr. Siu:

This is in reply to your letter dated April 15, 1997, requesting a country of origin determination for a baseball cap which will be imported into the United States. You also request a determination regarding eligibility for this merchandise under the Caribbean Basin Economic Recovery Act (CBERA). A sample was submitted to this office for examination.

FACTS:

The submitted merchandise consists of a baseball cap composed of 100 percent cotton fabric. The manufacturing operations are as follows:

China

woven cotton fabric is made;
-fabric cut into six panels for the cap body and peak; -six panels joined together;
-piping attached to the six panels;
-peak panels are joined together along with polyurethane insert; -button is attached to top of cap body;
-sweatband insert is attached to sweatband.

Panama

-peak is attached to cap body;
-sweatband is attached to cap;
-adjustable plastic strap is attached;
-embroidery at front of cap body

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ISSUE:

What is the country of origin of the subject merchandise? Is it eligible for duty-free treatment under CBERA?

LAW AND ANALYSIS:

I. Caribbean Basin Economic Recovery Act

Section 222 of the Customs and Trade Act of 1990 (Public Law 101382) amended U.S. Note 2, Subchapter II, Chapter 98, HTSUS, to provide for the dutyfree treatment of articles, other than specified products, which are assembled or processed in a Caribbean Basin Economic Recovery Act (ACBERA@) beneficiary country (ABC@) in whole of fabricated components or ingredients (except water) of U.S. origin.

Specifically, Note 2(b) provides as follows:

(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if

(i) the article is

(A) assembled or processed in whole of fabricated components that are a product of the United States,
or

(B) processed in whole of ingredients (other than water) that are a product of the United States, in a beneficiary country; and

(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

As used in this paragraph, the term Abeneficiary country@ means a country listed in General Note 7(a), HTSUS.

Pursuant to General Note 7(a), HTSUS, Panama has been designated as a BC for CBERA purposes. Although U.S. Note 2(b)(i)(A) and (B), Subchapter II, Chapter 98, HTSUS, are separated by the word Aor,@ it is our opinion that Congress did not intend to preclude dutyfree treatment under this provision to an article which is created in a BC both by assembling and processing U.S. fabricated components and by processing U.S. ingredients.

U.S. Note 2(b), however, specifically excludes textiles and textile articles from dutyfree treatment under CBERA. In Treasury Decision (AT.D.@) 9188, 25 Cust. Bull. 45 (1991), Customs determined that only those articles classified in HTSUS provisions which include a textile category number should be considered Atextile@ and Aapparel@ articles for purposes of U.S. Note 2(b), Subchapter II, Chapter 98, HTSUS.

As the classification of the cap, subheading 6505.90.2060 HTSUSA, is a provision which includes a textile category number, the caps are considered textile or apparel articles for purposes of Note 2(b). Accordingly, the subject cap does not qualify for duty-free treatment.

II. Country of Origin

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act 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 AThe 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 AWhere 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@.

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Paragraph (e) states that AThe 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@:

6505.90 (1) If the good consists of two or more components, a change to subheading 6505.90 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

The subject baseball cap is classifiable in subheading 6505.90.2060, HTSUSA. As the baseball cap is not wholly assembled in a single country, the terms of the tariff shift are not met and paragraph (c)(2) of Section 102.21 is inapplicable.

Paragraph (c)(3) states that AWhere the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section@:

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is neither knit to shape nor wholly assembled in one country, paragraph (c)(3) is not applicable.

Section 102.21 (c)(4) states, AWhere the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred@. In the opinion of this office country of origin is conferred in China, where the crown is sewn and the peak, crown and sweatband are each individually assembled into components.

HOLDING:

Based on the above, the baseball cap is a textile article excluded from eligibility for duty-free treatment under CBERA. Additionally, we conclude that the baseball cap will be considered to be a Aproduct of@ China and will therefore not receive dutyfree treatment under CBERA even if it is Aimported directly@ into the U.S. from Panama.

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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). That section states that a 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 the country of origin and application of the CBERA. 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.

Sincerely,

John Durant, Director

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