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HQ 562350

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September 27, 2002

CLA-02 RR:CR:SM 562350

CATEGORY: CLASSIFICATION

Frank J. Desiderio, Esq.
Edward B. Ackerman, Esq.
Grunfeld, Desiderio, Lebowitz
Silverman & Klestadt LLP
245 Park Avenue, 33rd Floor
New York, New York 10167-3397

RE: Eligibility of certain women’s woven fabric garments assembled in Mauritius for preferential treatment under AGOA; “findings and trimmings”

Dear Mr. Desiderio and Mr. Ackerman:

This is in response to your letter of January 10, 2002, on behalf of Tommy Hilfiger Sportswear, Inc., requesting a ruling on the eligibility of certain women’s woven garments assembled in Mauritius for preferential treatment under the Africa Growth and Opportunity Act (AGOA). Samples of several garments accompanied your request.

FACTS:

At issue are three different women’s woven fabric garments, described in the following manner:

Women’s Cotton Drawstring Shorts – Style SU02

The cotton twill short has two front pockets, two back pockets, a zipper-fly front with a drawstring and metal clasp closure at the waist. The cotton twill shell fabric is utilized to make the shell as well as the drawstring, while cotton sheeting is utilized for the pocket fabric. Both the cotton twill and sheeting fabric will be entirely wholly formed and cut either in Mauritius or the United States; the garment will be completely assembled in Mauritius.

Sewn all around the exterior portion of the waistband, except at the front center of the garment, is a half-inch wide strip of striped nylon grosgrain fabric. It is secured to the waistband by stitching along the top and bottom edge to form a sheath or tunnel over the drawstring The grosgrain fabric is not the product of a beneficiary country nor is it of U.S. origin. You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the United States are made from yarns originating in the United States, and that fabrics wholly formed in Mauritius are made from yarns originating either in the United States or in a designated beneficiary sub-Saharan African country.

Women’s Cotton Trevor Twill Pant – Style SU01

The cotton Trevor twill women’s pant is a basic pant with no pleats, two front pockets, two pockets in the back, and cropped legs. The shell fabric of this pant is 100 percent cotton twill fabric that will be wholly formed and cut entirely either in the United States or Mauritius.

The submitted sample contains a 100 percent cotton blue and white striped oxford fabric that lines the inside of the waistband. The fabric is visible from the outside of the waistband by virtue of a quarter-inch channel “window” or channel around the outside of the waistband that renders a separate interior layer of the striped fabric visible. This oxford fabric will be of foreign origin.

In an alternate design, for which no sample was submitted, you propose to assemble the same pants described above, except that in lieu of the oxford fabric “window,” the waistband will be made from the same U.S. or Mauritius-origin shell fabric as the pant, and sewn to the outside of this waistband will be a half-inch strip of striped grosgrain fabric of foreign origin (the same grosgrain fabric as in the Style SU02 drawstring shorts previously referenced, but completely sewn down rather than serving as a tunnel for a drawstring).

The product will be completely assembled in Mauritius. You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the United States are made from yarns originating in the United States, and that fabrics wholly formed in Mauritius are made from yarns originating either in the United States or in a designated beneficiary sub-Saharan African country.

Cotton Twill Island Halter Dress – Style SPO2

The woven cotton twill women’s dress is a sleeveless halter-style dress with a shirt-type collar and full frontal opening with eleven-button closure. This style also features two button-flap breast pockets, a hemmed bottom and an elastic back. The shell fabric will be 100 % woven cotton twill wholly formed and cut either in Mauritius or the United States. The inside collarband, armhole/back elastic facing and two hangar straps are comprised of a 70 percent cotton/30 percent polyester blue and white striped oxford fabric that is not formed in the United States or a beneficiary country.

The product will be completely assembled in Mauritius. You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the United States are made from yarns originating in the United States, and that fabrics wholly formed in Mauritius are made from yarns originating either in the United States or in a designated beneficiary sub-Saharan African country.

No information was received regarding the country of origin of the yarn, sewing thread, embroidery thread, zippers, zipper tape, hook and bar, buttons and labels, pocketing fabric for the pants, interlining for waistband of the pants or the elastic in the back waistband of the dress.

ISSUE:

Whether certain foreign-origin materials used in the construction of the submitted garments are “findings and trimmings,” the use of which will not disqualify otherwise eligible garments, assembled in Mauritius in the manner described above, for preferential tariff and quota treatment under section 112(b)(1) or (b)(3) of the Act, when imported into the United States.

LAW AND ANALYSIS:

The Trade and Development Act of 2000 (“the Act) was signed into law on May 18, 2000 (Pub. L. 106-200, 114 Stat. 251). Title I of the Act concerns trade benefits for sub-Saharan Africa and is referred to as the African Growth and Opportunity Act (“AGOA”). Section 112 of the Act (codified at 19 U.S.C. 3721) specifies the textile and apparel articles that are eligible for duty-free and quota-free treatment when imported directly into the customs territory of the U.S. from a beneficiary sub-Saharan African country. Section 3108 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), enacted on August 6, 2002, amended the AGOA to modify the treatment accorded to textile and apparel articles imported from beneficiary sub-Saharan African countries.

Presidential Proclamation 7350 dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 FR 59321), implemented the AGOA by designating the eligible beneficiary sub-Saharan African countries and amending Chapter 98, Harmonized Tariff of the U.S. (HTSUS) (including the creation of new subchapter XIX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the AGOA. The textile and apparel trade benefits provided by the AGOA are available to eligible articles imported from countries that the President designates as beneficiary sub-Saharan African countries, provided that the U.S. Trade Representative (“USTR”) has determined that these countries (1) have adopted an effective visa system and related procedures to prevent unlawful transshipment and use of counterfeit documents, and (2) have implemented and follow, or are making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles.

Mauritius is among the countries designated by the President as beneficiary sub-Saharan African countries in Presidential Proclamation 7350. In addition, effective January 19, 2001, the USTR determined that Mauritius satisfies the two criteria set forth above (see notice published in the Federal Register on January 31, 2001 (66 FR 8440)).

Interim Customs Regulations to implement the trade benefit provisions of the AGOA were published in the Federal Register as Treasury Decision (T.D.) 00-67 on October 5, 2000 (65 FR 59668). Public comments were invited on the Interim Regulations for submission by December 4, 2000.

Section 112(b)(1) of the Act, as recently amended by section 3108 of the Trade Act of 2002, provides, in pertinent part, that preferential treatment applies to –

Apparel articles sewn or otherwise assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States, from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in the United States) that are –
entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or entered under chapter 61 or 62 of the Harmonized Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States but for the fact that the articles were embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing, or other similar processes.

Articles meeting the requirements of section 112(b)(1) of the Act are eligible for duty-free and quota-free entry.

Section 112(b)(3) of the Act, as recently amended by section 3108 of the Trade Act of 2002, provides, in pertinent part, that preferential treatment applies to –

Apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub-Saharan African countries from yarn originating either in the United States or one or more beneficiary sub-Saharan African countries

Articles meeting the requirements of section 112(b)(3) of the Act are eligible for duty-free and quota-free entry, subject to the quantitative limitations set forth in U.S. Note 2, subchapter XIX, Chapter 98, HTSUS.

Section 112(d)(1)(A) of the Act provides that:

An article otherwise eligible for preferential treatment under this section shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if the value of such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled article. Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, “bow buds”, decorative lace trim, elastic strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings or trimmings only if they are each less than 1 inch in width and used in the production of brassieres.

See also U.S. Note 3(a)(i) and 3(b), subchapter XIX, Chapter 98, HTSUS, and 19 CFR 10.213(b)(1)(i).

While “findings and trimmings” for purposes of the AGOA 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 was to ensure that all fabric components be formed and cut in the U.S. and sub-Saharan African beneficiary countries. “Findings” are generally accepted to be sewing essentials used in textile goods while “trimmings” have been defined as “decoration or ornamental parts.” See M. Picken, The Fashion Dictionary (1973).

With regard to what items constitute “findings” or “trimmings,” 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 Headquarters Ruling Letter (HRL) 559552, dated February 14, 1996, and HRL 558954, dated June 30, 1995. In HRL 559738, dated July 2, 1996, Customs held that a synthetic suede yoke and elbow patches are not “findings and trimmings” because they comprise a large surface area of the garment and serve more than decorative purposes. However, embroidered patch labels which indicate or symbolize the brand name and provide ornamentation have been held to be “findings and trimmings” for purposes of subheading 9802.00.90, HTSUS (formerly the Special Regime Program) and the Special Access Program. See HRL 560520, dated September 22, 1997, and HRL 560726, dated December 12, 1997. Moreover, in HRL 956426, dated April 23, 2002, Customs held that a woven decorative patch sewn to the chest area of a sleeveless knit is a “trimming” for purposes of the CBTPA.

Upon examination of the submitted samples, we conclude that the grosgrain fabric used in the drawstring shorts (Style SU02), the blue and white cotton oxford cloth visible through the waistband “window” of the Trevor twill pants (Style SU01), the grosgrain fabric used at the waistband in the proposed alternate Trevor twill pants design (for which no sample was submitted) and the blue and white oxford cloth used on the halter dress (Style SPO2) under the collarband, as armhole/elastic facing and hanger loops are not “findings.” None of the components are sewing essentials such as buttons, zippers, etc., or are otherwise analogous to any of the examples set forth in Subchapter XIX, U.S. Note 3(b), HTSUS. Nor are they “trimmings.” In the drawstring shorts (Style SU02), the grosgrain fabric is the component that attaches and maintains the drawstring belt. As used in the Trevor twill pants (Style SU01), the blue and white oxford cloth (or the grosgrain fabric in the proposed alternate Trevor design for which no sample was submitted), functions to join together two solid textile components to complete the waistband. In the halter dress (Style SPO2), the blue and white oxford fabric is used to finish the seams of the armhole and back elastic waistband, partially form the collarband and form the hanger loops in their entirety. Accordingly, we find that the grosgrain ribbon and blue and white oxford cloth used on these garments in the manner described are not “findings” or “trimmings” for purposes of the AGOA.

HOLDING:

Based on the information submitted, the grosgrain fabric used on the drawstring shorts (Style SU02), the blue and white striped oxford fabric used on the Trevor twill pants (Style SU01), the grosgrain fabric used in the proposed alternate Trevor design (for which no sample was submitted) and the blue and white striped oxford fabric used on the halter dress (Style SPO2) in the manner described are fabric components which do not qualify as “findings” or “trimmings” for purposes of the AGOA.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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

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See also:

• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• 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.