United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2001 HQ Rulings > HQ 562039 - HQ 961103 > HQ 562263

Previous Ruling Next Ruling
HQ 562263




November 27, 2001

CLA-2 RR:CR:sm 562263 tjm

Category: CLASSIFICATION

Mr. Shelly Cohen
Magid Glove and
Safety Manufacturing Co, LLC
2060 North Kolmar Ave
Chicago IL 60639-3483

RE: Partial Duty Exemption; Foreign Assembly of U.S. Components; 9802.00.80, HTSUS; Kevlar Gloves; Incidental to the Assembly Process; China; Canada; 19 C.F.R. § 10.17; 19 C.F.R. § 10.18; 19 C.F.R. § 10.16; 19 C.F.R. § 102.21(e)

Dear Mr. Cohen:

This is in reply to your letter dated October 5, 2001, requesting a ruling on the applicability of subheading 9802.00.80, HTSUS, to Kevlar gloves. Please find our response below.

FACTS:

The article at issue, Kevlar gloves, will be knit in the United States with U.S.-made yarn. The cuff end for the wrist area is over-edged with thread. The glove is then shipped to the People’s Republic of China where Chinese-origin leather is sewn onto the palm area. You submitted a sample of the finished glove as imported.

You request a ruling on whether the value of the base knit Kevlar glove would qualify for the partial duty exemption allowed under subheading 9802.00.80, HTSUS.

If, in addition to sewing the leather palm onto the glove, the over-edge thread were to be sewn to the cuff end in China, you ask whether the sewing of the over-edge thread would be considered an operation incidental to the assembly process.

You also ask whether the partial duty exemption provided under subheading 9802.00.80, HTSUS, would apply if the Kevlar yarn were made in Canada and the base gloves were knit in the U.S.

ISSUE:

Whether the Kevlar gloves assembled in China as described above qualify for entry under the provisions of subheading 9802.00.80, HTSUS.

LAW AND ANALYSIS:

A. Partial Duty Exemption: 9802.00.80, HTSUS

Subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) (19 U.S.C. § 1202), provides for a partial duty exemption when certain criteria are met:

Articles, except goods of heading 9802.00.90 and goods imported under provisions of subchapter XIX of this chapter and goods imported under provisions of subchapter XX, 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.

Furthermore, section 10.16(a), Customs Regulations (19 C.F.R. § 10.16(a)), defines assembly operations as:

The assembly operations performed abroad may consist of any method used to join or fit together solid components, such as. . .sewing. . .and may be preceded, accompanied, or followed by operations incidental to the assembly. . . .(Emphasis added)

If the article meets the requirements above, then the duty upon the full value of the imported article, less the cost or value of such products of the United States, will be levied upon entry. See 19 C.F.R. § 10.17 and 19 C.F.R. § 10.18.

From the facts presented, it is our opinion that the Kevlar glove, if knit in the United States from U.S.-origin yarn would qualify as a U.S. fabricated component. If the glove is knit to shape and the over edge thread is sewn in the U.S., the glove qualifies as being in a condition ready for assembly in China with the Chinese-origin leather palm component. The glove does not lose its physical identity by change in form, shape or otherwise. The assembly operation of sewing the leather palm onto the glove qualifies as an assembly under 19 C.F.R. § 10.16(a). Therefore, pursuant to the provisions of subheading 9802.00.80, HTSUS, upon importation, the cost or value of the U.S. component may be deducted from the full value of the imported article.

Assembly/Operations Incidental to the Assembly

You inquire whether the sewing of an over-edge thread in China would be considered an operation incidental to the assembly process. However, previous court decisions and Customs rulings have held that certain sewing of thread under similar circumstances qualifies as an acceptable assembly of components. In L’Eggs Products Inc. v. United States, 704 F. Supp. 1127 (Ct. Int’l Trade 1989), the Court held that thread used as a binding agent to join material to itself qualified as a component and was therefore eligible for a duty allowance under subheading 9802.00.80, HTSUS. In Peg Bandage v. United States, 19 Ct. Intl Trade 1337 (1993), elastic bandages of U.S. origin were shipped to Haiti where the ends were sewn with thread to prevent unraveling. The Court found that such an operation amounted to an assembly under the precursor to HTSUS subheading 9082.00.80, as it involved the joinder of the unsewn bandage “with another fully fabricated component, i.e. sewing thread.” See also, Headquarters Rulings Letter (HRL) 555648, dated July 16, 1991 (U.S.-origin fabric pieces cut in the U.S. and subjected to hemming qualified for a duty allowance under subheading 9802.00.80, HTSUS) and HRL 560409, dated June 24, 1997 (stitching around the edges of the belt material is an acceptable assembly operation under subheading 9802.00.80, HTSUS, as it involves the joinder of the thread and belt material).

Similarly, considering judicial precedence and previous Customs rulings on this issue, we find in the instant case that the sewing of the over-edge thread onto the cuff area of the glove, presumably to prevent unraveling of the knitted glove fabric, constitutes an assembly of components – U.S. origin thread and U.S. knit-to-shape glove. Therefore, pursuant to subheading 9802.00.80, HTSUS, if the Chinese assembly were to involve sewing the leather palm and the over-edge thread onto the knitted glove, the cost or value of U.S. components – U.S. knit glove and U.S. thread – may be deducted from the full value of the imported article.

C. Partial Duty Exemption if Canadian Yarn/U.S. Knitting

You also inquire whether knitting the glove in the United States from yarn formed in Canada, then exporting the glove to China for assembly with the leather palm would still qualify the imported glove for the partial duty exemption under subheading 9802.00.80, HTSUS.

Assuming that the classification of the glove is in heading 6116, the hierarchy of rules of origin for textile and apparel articles for most purposes is stipulated in 19 C.F.R. § 102.21. The first level in the rule of origin hierarchy provides 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. See 19 C.F.R. § 102.21(c)(1). In this scenario, because the yarn would be Canadian and the knitting would be performed in the U.S., this rule would not apply. The next level in the hierarchy of rules provides that the country of origin of a textile or apparel product is the single country, territory, or insular possession in which each foreign material incorporated in that good undergoes an applicable change in tariff classification specified in 19 C.F.R. § 102.21(e). For heading 6116, the change in tariff classification rule as set forth in 19 C.F.R. § 102.21(e) 6101-6117 (3), states, in pertinent part, that:

If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.

You asserted that the knitting to shape of the Canadian yarn would take place in the United States. Assuming that the yarn is classified in a heading other than 6101 to 6117, the production process in the United States would qualify the knit glove as a product of the United States. If the finished glove meets all the other requirements of 9802.00.80, HTSUS, the imported glove would qualify for the partial duty exemption.

HOLDING:

Based on the foregoing reasons, the assembly process in China, where a leather palm is sewn on the Kevlar glove knit in the United States from U.S. origin yarn would qualify as an acceptable assembly, rendering the glove eligible for the partial duty exemption under the terms of subheading 9802.00.80, HTSUS. Furthermore, in the scenario in which the over-edge thread is sewn in China, the imported glove would still qualify for the partial duty exemption. Lastly, if the glove was knit in the U.S. from Canadian-origin yarn, the glove would still be considered a product of the U.S. and upon meeting the requirements of 9802.00.80, HTSUS, the imported article from China would qualify for the partial duty exemption. The foregoing conclusions presume compliance with the documentation requirements of 19 C.F.R. § 10.24.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents are filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant
Director

Previous Ruling Next Ruling

See also: