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HQ 562455




August 7, 2002

MAR-2 RR:CR:SM 562455 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9820.11.06

Alan R. Klestadt, Esq.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP 245 Park Avenue
33rd Floor
New York, NY 10167-3397

RE: U.S.-Caribbean Basin Trade Partnership Act; subheading 9820.11.06; findings and trimmings

Dear Mr. Klestadt:

This is in response to your letter dated May 17, 2002, on behalf of Mast Industries, Inc., requesting a binding ruling on the eligibility of certain women's dresses for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted a sample for our examination.

FACTS:

This case involves a women's woven sleeveless dress. The fabric used to make the dress is made in the U.S. from yarn wholly formed in the U.S. The dress is cut, sewn and wholly assembled in El Salvador. The dress features a "bra loop" above each shoulder to fasten the wearer's bra to the dress. The bra loop is composed of ribbon with a small metal snap, measuring approximately two inches in length and 1/4 inch in width. The bra loop is made in South Korea. The sample has a belt sewn into it, which is not the subject of this ruling. We assume for the purposes of this ruling that U.S. sewing thread is used to manufacture the dresses. We also assume for the purposes of this ruling that the cost of the bra loops is less than 25% of the cost of the components of the dress.

ISSUE:

Whether the women's dresses, manufactured as described above, are eligible 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 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. El Salvador is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351, dated October 2, 2000, 65 Fed. Reg. 59329) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).

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 is outside the scope of the comments received.

Subheading 9820.11.06, HTSUS, provides for the duty-free entry of:

Apparel articles cut in one or more such countries from fabric wholly formed in the United States from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 and are wholly formed in the United States), if such articles are assembled in one or more such countries with thread formed in the United States.

In this case, the fabric and yarn are wholly formed in the U.S. The dresses are cut and assembled in El Salvador, a designated beneficiary country under the CBTPA. Assuming that U.S.-origin sewing thread is used to manufacture the dress, the dresses would be eligible for preferential treatment under subheading 9820.11.06, HTSUS, if the foreign-origin bra loops are considered "findings or trimmings."

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 (2.54 cm) in width and used in the production of brassieres.

While "findings and trimmings" for purposes of the CBTPA are 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 bra loop, composed of ribbon with a small metal snap, is considered a "finding." The snap is similar to a zipper or button and does not hinder the intent of the statute. Since the bra loop is considered a "finding" for the purposes of the CBTPA, the dresses are eligible for preferential treatment under the CBTPA.

HOLDING:

Based on the information provided, the women’s dresses, manufactured as described in this case, are eligible for duty free/quota free treatment under subheading 9820.11.06, HTSUS, provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country.

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,

Myles B. Harmon, Acting Director
Commercial Rulings Division


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