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 > 2002 HQ Rulings > HQ 965435 - HQ 965511 > HQ 965500

Previous Ruling Next Ruling
HQ 965500

---

July 5, 2002

CLA-2 RR:CR:TE 965500 JFS

CATEGORY: CLASSIFICATION

TARIFF NO.: 5607.50.3500; 5609.00.3000; 5808.10.7000; 6307.90.5010

Mr. Michael Dancausse
Braidme, Inc.
6123 Harbor View Lane
Greensboro, NC 27410

RE: Caribbean Basin Trade Partnership Act; Drawstrings; Not Findings

Dear Mr. Dancausse:

This is in response to your letter dated March 23, 2002, requesting a binding ruling on the eligibility of apparel that incorporates certain drawstrings for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). You submitted six samples for our examination.

FACTS:

Six styles of drawstrings are under consideration. You request that Customs provide two different classification scenarios for the articles, (1) in the piece, i.e., unfinished drawstrings stored on a bolt or spool, and (2) finished, i.e., cut to length and finished so that the ends will not fray. You propose several manufacturing scenarios wherein the articles will be manufactured in Costa Rica and/or the United States. You also request that Customs consider the eligibility for preferential tariff treatment of footwear manufactured in a beneficiary country that incorporates laces manufactured in Costa Rica from U.S. yarns.

The drawstrings are manufactured on braiding machines using either nylon, polyester or cotton yarns. In all cases the yarns are manufactured in the United States. You state that you intend to sell the drawstrings to apparel manufacturers in CBTPA beneficiary countries that export apparel articles to the United States.

Sample #1 is constructed of a narrow woven braid, measuring approximately 7/16th’s of an inch in width. It appears to be manufactured from red and white cotton yarns. It is classified in subheading 5808.10.7000, HTSUSA, which provides, in pertinent part, for "Braids in the piece; Braids in the piece: Other: Of cotton or man-made fibers." The column one general rate of duty is 7.6 percent ad valorem and the textile restraint category is 229.

Sample #2 is a tubular narrow woven braid with a textile core. The woven braid appears to be manufactured from cotton yarns that are gray and white. The textile core consists of two white multifilament yarns. It is classified in subheading 5808.10.7000, HTSUSA, which provides, in pertinent part, for "Braids in the piece; Braids in the piece: Other: Of cotton or man-made fibers." The column one general rate of duty is 7.6 percent ad valorem and the textile restraint category is 229.

Sample #3 is constructed of three plies of multifilament yarns of man-made fibers. Each ply is constructed of numerous yellow yarns. The three plys are twisted to form one yarn or cord. The sample appears to be greater than 10,000 decitex. It is classified in subheading 5607.50.3500, HTSUSA, which provides for: "Twine, cordage, ropes and cables, whether or not plaited or braided and whether or not impregnated, coated, covered or sheathed with rubber or plastics: Of other synthetic fibers: Not braided or plaited: Other." The general column one rate of duty is 21.4 cents per kilogram plus 11.6 percent ad valorem. The textile restraint category is 201.

Sample #4 is constructed of eight plies of multifilament man-made fiber. Each ply is constructed of numerous yellow yarns. The eight plies are braided to form one cord. The sample appears to be greater than 10,000 decitex. The article is classified in subheading 5607.50.3500, HTSUSA, which provides for: "Twine, cordage, ropes and cables, whether or not plaited or braided and whether or not impregnated, coated, covered or sheathed with rubber or plastics: Of other synthetic fibers: Not braided or plaited: Other." The general column one rate of duty is 21.4 cents per kilogram plus 11.6 percent ad valorem. The textile restraint category is 201.

Sample #5 is constructed of a flat braid. The yarns appear to be of cotton and are dark gray. The article is classified in subheading 5808.10.7000, HTSUSA, which provides, in pertinent part, for "Braids in the piece; Braids in the piece: Other: Of cotton or man-made fibers." The column one general rate of duty is 7.6 percent ad valorem and the textile restraint category is 229.

Sample #6 is constructed of a hollow tubular braid. The yarns appear to be man-made and are white. The article is classified in subheading 5607.50.3500, HTSUSA, which provides for: "Twine, cordage, ropes and cables, whether or not plaited or braided and whether or not impregnated, coated, covered or sheathed with rubber or plastics: Of other synthetic fibers: Not braided or plaited: Other." The general column one rate of duty is 21.4 cents per kilogram plus 11.6 percent ad valorem. The textile restraint category is 201. Once samples 1, 2, and 5, are finished, i.e., cut and tipped, assuming they are manufactured from cotton yarns, they are classified in subheading 6307.90.5010, HTSUSA, which provides for: “Other made up articles, including dress patterns: Other: Corset lacings, footwear lacings or similar lacings, Of cotton. The general column one rate of duty is 1.6 percent ad valorem. The textile restraint category is 369.

Once samples 3, 4 and 6 are finished, i.e., cut and tipped, they are classified in subheading 5609.00.3000, HTUSA, which provides for "Articles of yarn, strip or the like of heading 5404 or 5405, twine, cordage, rope or cables, not elsewhere specified or included: Of man-made fibers." The general column one rate of duty is 5.4 percent ad valorem.

ISSUE:

Whether wearing apparel that incorporates the subject drawstrings is eligible for preferential tariff 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.

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. “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. Costa Rica 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).

I. Classification Under the HTSUSA

Garments meeting the description contained in subheading 9820.11.06, HTSUSA, are eligible for preferential tariff treatment as provided for in Subchapter XX, U.S. Note 2(a), HTSUSA, which provides:

Except as provided in this note, textile and apparel articles described in subheading 9820.11.03 through 9820.11.30, inclusive, of this subchapter that are imported directly into the custom territory of the United States from a designated beneficiary CBTPA country enumerated in general note 17(a) to the tariff schedule shall be eligible to enter free of duty and free of any quantitative limitations, except as provided in this subchapter, under the terms of the provisions set forth in such subheadings and applicable legal notes, as indicated by the rate of duty of “Free” in the Special rates of duty subcolumn for such provisions.

Subheading 9820.11.06, HTSUSA, allows for 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.

Emphasis added. Accordingly, pursuant to subheading 9820.11.06, HTSUSA, in order to qualify for preferential duty treatment, apparel articles must be assembled from fabric that is wholly formed in the U.S.

The subject drawstrings that are classified in heading 5808, HTSUSA, the provision for “braids in the piece, other than knitted or crocheted,” and in heading 6307, HTSUSA, the provision for “Other made up articles . . . Corset lacings, footwear lacings or similar lacings,” are considered fabric. Legal Note 1 to Chapter 59, HTSUSA, is instructional as to the scope of the term “fabric.” It provides:

Except where the context otherwise requires, for the purposes of this chapter the expression "textile fabrics" applies only to the woven fabrics of chapters 50 to 55 and headings 5803 and 5806, the braids and ornamental trimmings in the piece of heading 5808 and the knitted or crocheted fabrics of headings 6002 to 6006. See, HQ 559794, dated June 3, 1996 (finding that a “textile drawstring cord” was a “fabric component”). Subheading 9820.11.06, HTSUSA, mandates that apparel articles be made from fabric wholly formed in the U.S., from yarns wholly formed in the U.S. Therefore, the instant fabric drawstrings, i.e., those that are classified in heading 5808, HTSUSA, and heading 6307, HTSUSA, that are formed in Costa Rica, will prevent otherwise eligible apparel articles from qualifying for preferential treatment under the CBTPA.

However, drawstrings that are classified in heading 5607, HTSUSA, the provision for “Twine, cordage, ropes and cables,” and heading 5609, HTSUSA, the provision for “Articles of . . . twine, cordage, rope or cables,” are not considered to be fabric. See, supra, Legal Note 1 to Chapter 59, HTSUSA. In HRL 557875, dated May 4, 1995, Customs held that soft-sided luggage was eligible for subheading 9802.00.90, HTSUSA, 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, HTSUSA. This decision was made, in part, because the polyester stuffing was not a fabric. Similarly, the subject drawstrings that are classified in headings 5607, and heading 5609, HTSUSA, are not fabric and should not effect CBTPA eligibility.

II. Findings and Trimmings Provisions under the CBTPA

Subchapter XX, U.S. Note 3(a), HTSUSA, provides:

An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains— (i) findings or trimmings of foreign origin, if the value of such findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article[.]

The Interim Regulations, regarding findings and trimmings further provide:

An article otherwise described under paragraph (a) of this section will not be ineligible for the preferential treatment referred to in [19 C.F.R.] § 10.221 because the article contains: (A) Findings and trimmings of foreign origin, if the value of those findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. For purposes of this section "findings and trimmings" include, but are not limited to, hooks and eyes, snaps, buttons, "bow buds", decorative lace trim, elastic strips (but only if they are each less than 1 inch in width and are used in the production of brassieres), zippers (including zipper tapes), labels, and sewing thread except in the case of an article described in paragraph (a)(3) or (a)(12) of this section.

19 C.F.R. § 10.223(b)(1)(i)(A). Thus, if the drawstrings are “findings,” and provided the total costs of findings and trimmings does not exceed 25% of the value of the apparel article, their country of manufacture is immaterial.

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. While "findings and trimmings" for purposes of the CBTPA are not specifically defined, the examples set forth above are indicative of the types of components that are considered to be within the purview of this provision.

The exception for findings and trimmings was intended to be of a restrictive nature, as the intent of the statute was to ensure that all fabric components be formed and cut in the U.S. and CBTPA beneficiary countries. See HQ 562018, dated March 22, 2002. "Findings" are generally accepted to be sewing essentials used in textile goods while "trimmings" are decorative or ornamental parts. See, for example, Headquarters Ruling Letter ("HQ") 559552, dated February 14, 1996; HQ 560398, dated July 29, 1997; HQ 560458, dated March 6, 1998; HQ 559780, dated May 19, 1997 and HQ 560520, dated September 22, 1997, for examples of what qualifies as a finding or trimming. See also, HQ 558954, dated June 30, 1995; HQ 559522, dated February 14, 1996; HQ 559738, dated July 2, 1996; HQ 559794, dated June 3, 1996; and HQ 559738, dated July 2, 1996, for examples of what does not qualify as a finding or trimming.

In HQ 559794, supra, Customs ruled that a “textile drawstring cord” was not a finding or a trimming. The basis for the ruling was that a “drawstring cord” is not analogous to the examples of findings, which are generally sewing essentials used in constructing the garment. Accordingly, pursuant to HQ 559794, the instant drawstrings are not findings. As a result, otherwise eligible apparel articles that incorporate foreign drawstrings that are considered fabric under the HTSUSA, will be disqualified from receiving preferential tariff treatment under the CBTPA.

III. Additional Manufacturing Scenarios

You request that Customs consider CBTPA eligibility for apparel articles that contain drawstrings that are braided in the U.S. from U.S. yarns, and then shipped to Costa Rica where they are cut, tipped, dyed and/or printed. The issue of whether dying and printing can occur in a beneficiary country and not the U.S. is currently pending before Congress. Accordingly, this aspect of the manufacturing process will not be addressed at this time. The drawstrings classified under heading 5808, HTSUSA, are “fabric,” and are wholly formed in the U.S., from U.S. yarns. Accordingly, cutting and tipping of the drawstrings in Costa Rica will not disqualify an otherwise qualifying article for preferential treatment under the CBTPA.

Additionally, you request that Customs consider what benefits are available to drawstrings that are wholly formed in Costa Rica from U.S. yarn and then imported directly into the U.S. Drawstrings are not “apparel articles” as defined in the CBTPA. See, 19 CFR § 10.222. Therefore, they are not eligible for preferential treatment under the CBTPA.

Lastly, you request that Customs consider the eligibility for preferential tariff treatment of footwear manufactured in a beneficiary country that incorporates laces wholly formed from U.S. yarns, which are manufactured in Costa Rica. Footwear originating in a CBTPA country is eligible for the same tariff treatment accorded to Mexican footwear products under NAFTA, provided the CBTPA footwear meets the applicable NAFTA rules of origin set forth in General Note 12, HTSUS, and the Appendix to Part 181, Customs Regulations (19 CFR Part 181). You have not provided sufficient facts to allow Customs to respond to your request. However, if after receiving this ruling, you need an additional ruling concerning CBTPA eligibility of footwear incorporating your product, please submit a detailed request to Customs.

HOLDING:

Provided that the subject drawstrings, as described herein, are classified in heading 5808, HTSUSA, or heading 6307, HTSUSA, and are formed in Costa Rica, apparel articles that utilize such drawstrings will not qualify for preferential tariff treatment under the CBTPA.

Provided the subject drawstrings, as described herein, are classified in heading 5808, HTSUSA, and heading 6307, HTSUSA, and are manufactured in the U.S. and then finished in Costa Rica, apparel articles that utilize the subject drawstrings may be eligible for duty free and quota free treatment under subheading 9820.11.06, HTSUSA, provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country and the apparel articles meet the requirements of the subheading.

Provided the subject drawstrings are manufactured as described above, apparel articles that utilize the drawstrings manufactured in Costa Rica and classified in heading 5607, HTSUSA, or heading 5609, HTSUSA, may be eligible for duty free and quota free treatment under the provisions of the CBTPA, provided the apparel articles are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country and the apparel articles meet the requirements of the relevant HTSUSA subheading.

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 E Elkins,
Chief, Textiles Classification Branch

Previous Ruling Next Ruling

See also:

• Tariff No.: 5607.50.35 - Twine nesoi, cordage, rope and cables of synthetic fibers, other than of polyethylene or polypropylene, not braided or plaited
• Tariff No.: 5609.00.30 - Articles of yarn, strip, twine, cordage, rope or cables nesoi, of man-made fibers
• Tariff No.: 5808.10.70 - Braids in the piece, not suitable for making or ornamenting headwear, of cotton or man-made fibers
• Tariff No.: 6307.90.50 - Corset lacings, footwear lacings or similar lacings of textile materials
• 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.
• Tariff No.: 9820.11.03 - CBTPA goods: Apparel article of chapter 61/62 assembled one or more CBTPA country under certain conditions from fabrics formed and cut in US
• Tariff No.: 9820.11.06 - CBTPA goods: Apparel articles cut in one or more CBTPA from US formed fabric of US formed yarn assembed in CBTPA with US yarn
• Tariff No.: 9820.11.30 - CBTPA goods: Handloomed, handmade or folklore textile and apparel goods, under terms of US note 4 to this subchapter