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HQ 562018




March 22, 2002

MAR-2 RR:CR:SM 562018 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.:

Beth C. Ring
Sandler, Travis & Rosenberg, P.A.
551 Fifth Avenue
New York, NY 10176

RE: U.S.-Caribbean Basin Trade Partnership Act; findings; non-textile component; brassiere; transparent polyurethane strip; polyurethane cup

Dear Ms. Ring:

This is in response to your letter of January 3, 2001, on behalf of Bestform, Inc., requesting a binding ruling on the eligibility of brassieres made with foreign polyurethane cups and strips for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted sample polyurethane brassiere cups and transparent polyurethane strips

FACTS:

The polyurethane cups are made in China. The transparent polyurethane strips are 1/2 inch in width and are made in Spain. The sample strips are brassiere straps with plastic buckles attached for adjustment. The cups and strips are assembled in qualifying Caribbean countries into brassieres.

ISSUE:

Whether the use of foreign polyurethane brassiere cups and strips in a brassiere disqualifies it for duty-free treatment under the CBTPA.

LAW AND ANALYSIS:

Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213 (b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.

Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in section 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.

Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.

The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country: (1) that is designated as a CBTPA beneficiary country; and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles.

In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000. It is noted that the issues raised in this ruling letter are outside the scope of the comments received.

As amended by section 211 of the CBTPA, 19 U.S.C. 2703(b)(2)(A)(iv)(I), provides preferential tariff treatment during the transition period for any apparel article classifiable under subheading 6212.10, HTSUS, if the article is both cut and sewn or otherwise assembled in the U.S., or one or more of the CBTPA beneficiary countries, or both.

1. Transparent polyurethane strip

As amended by section 211 of the CBTPA, 19 U.S.C. 2703(b)(2)(A)(vii)(I)(aa), permits the use of foreign origin findings or trimmings, provided that such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled article. (Also cited at U.S. Note 3(a)(i), Subchapter XX, HTSUS). As cited in 19 U.S.C. 2703(b)(2)(A)(vii)(I)(aa) and in U.S. Note 3(b), Subchapter XX, HTSUS, examples of findings and trimmings include "sewing thread, hooks and eyes, snaps, buttons, 'bow buds', decorative lace trim, elastic strips, zippers, including zipper tapes and labels, and other similar products." The exception for foreign origin elastic strips is limited to those elastic strips of less than one inch in width (2.54 cm) and used in the production of brassieres.

In the Conference Report for the CBTPA, Conf. Rep. No. 606, 106th Cong., 2nd Sess. 102 (2000), the Senate states that it:
intends that this new program of textile and apparel benefits will be administered in a manner consistent with the regulations that apply under the "Special Access Program" for textiles and apparel articles from Caribbean and Andean Trade Preference Act countries, as described in 63 Fed. Reg. 16474-16476 (April 3, 1998). Thus, the requirement that products must be assembled from fabric formed in the United States applies to all textile components of the assembled products, including linings and pocketing, subject to the exceptions that currently apply under the "Special Access Program."

Therefore, it is instructive to examine what the Committee for the Implementation of Textile Agreements ("CITA"), Department of Commerce, stated concerning the use of foreign elastic strips in the Special Access Program ("SAP") as the scope of the exception for findings, trimmings and elastic strips under SAP and the CBTPA are similar. The meaning of the language in the SAP involving elastic strip, as set forth in a CITA directive, published in 52 Fed Reg 26057, July 10, 1987, was as follows:

Elastic strips were included in recognition of the existing operations producing brassieres in Caribbean Basin countries. Because the foreign origin exception for elastic strips was intended by CITA to be limited to elastic strips for use as brassiere straps and not to include elastic fabrics such as those used in waistbands, effective October 1, 1987, the foreign origin exception for elastic strips is clarified as limited to narrow elastic fabric less than one inch in width used in the production of brassieres only. (Emphasis added.)

In short, CITA indicated that its’ intention was to limit the use of foreign-origin (not produced in the U.S. or a qualifying Caribbean country) elastic fabric in the manufacture of goods entering the U.S. under the SAP.

In this case, the submitted polyurethane strip sample clearly is not elastic fabric. As previously indicated, the "elastic strip" exception and the language limiting the scope of that exception to strips less than one inch (2.54 cm) in width used in the manufacture of brassieres concerned only elastic fabric. Therefore, we conclude that the polyurethane strip at issue here does not fall within the "elastic strip" definition.

While "findings and trimmings" for purposes of the CBTPA were not specifically defined, the examples set forth above, such as zippers, buttons, decorative lace trim and labels are indicative of the types of components which are considered to be within the purview of this provision. The exception for findings and trimmings was necessarily intended to be of a restrictive nature, as the intent of the statute, as discussed above, was to ensure that all fabric components be formed and cut in the U.S. and CBTPA beneficiary countries.

In this regard, Customs has previously held under subheading 9802.00.90, HTSUS, that fabric items such as shoulder pads, sleeve headers, and velveteen collars are not "findings and trimmings." See HRL 559552, dated February 14, 1996, and HRL 558954, dated June 30, 1995.

In HRL 561868, dated July 10, 2001, Custom held that rubber tape used in the assembly of bathing suits was considered a "finding" for the purposes of subheading 9802.00.90, HTSUS. Customs held in HRL 559552, dated February 14, 1996, that reinforcing tape, "which purpose is to add strength to the armhole seam," is considered a "finding" under the subheading 9802.00.90 provision as "it is analogous to zipper tape, and is more of a necessity in constructing the garment such as the use of buttons, hooks, etc." In HRL 560458, dated March 6, 1998, Customs held that embroidery thread, cotton bias tape and button tacks are considered "findings" under subheading 9802.00.90, HTSUS, because those items are analogous to the listed examples and do not hinder the intent of the statute to ensure that all fabric components are formed and cut in the U.S.

In this case, the foreign origin polyurethane strip is not a supplementary element used to construct the garment but, rather, is a brassiere strap, a major component of the brassiere. The polyurethane strip is not analogous to the examples of "findings and trimmings" set forth above. Based on the above, we conclude that the polyurethane strip is not considered a "finding or trimming" under the CBTPA.

In HRL 557875, dated May 4, 1995, Customs held that soft-sided luggage was eligible for subheading 9802.00.90, HTSUS, treatment although it had foreign components (not of U.S. origin). This conclusion was reached because the foreign components were neither textiles, nor findings and trimmings. Consistent with this ruling, in HRL 560649, dated December 9, 1997, Customs held that toys filled with foreign polyester stuffing were eligible for duty-free entry under subheading 9802.00.90, HTSUS. Customs determined that the polyester stuffing was neither a fabric nor a "finding" but rather, a non-textile component. Those rulings are similar to this case because the polyurethane strip is not a textile component of the brassieres and also is not considered a "finding or trimming." Based on the above, we find that the brassieres would not be ineligible for CBTPA treatment because of the use of foreign non-textile polyurethane strips.

2. Polyurethane cup

You state that the polyurethane brassiere cups are classifiable in chapter 39, HTSUS, as articles of plastics. You contend that they are neither a fabric nor a finding or a trimming, but rather a non-textile component of the brassieres that has no bearing on the duty-free eligibility of the finished garments.

For the purposes of this ruling, we will assume that the classification of the polyurethane cups in Chapter 39, HTSUS, which includes plastics and articles thereof, is correct. The cups give form and shape to the finished brassieres. As discussed above, they are classified in the provision for plastics and are not a textile. Because the cups give the shape and form to the finished brassiere, they would not be analagous to the examples of finding or trimmings set forth in U.S. Note 3(b), Subchapter XX, HTSUS, and would not be considered a finding or trimming. Based on HRL 557875 and 560649 and the above analysis, we find that the use of the foreign-origin polyurethane cups in the production of the brassieres does not exclude them from eligibility under the CBTPA.

We note that interim regulations to implement those provisions within the CBTPA that establish standards for preferential treatment for brassieres imported from CBTPA beneficiary countries were published in T.D. 01-74, dated October 2, 2001, and published in the Federal Register, October 4, 2001 (66 FR 50534).

HOLDING:

The foreign-origin polyurethane strip and the foreign-origin polyurethane cups are neither fabrics nor findings or trimmings and therefore, their use in the production of brassieres does not render the brassieres ineligible for the CBTPA.

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

Sincerely,

John Durant, Director
Commercial Rulings Division

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