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HQ 966501

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August 14, 2003

CLA-2 RR:CR:TE 966501 BAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.12

Gary Kao
Unique Garments International (Pty) Ltd.
Lot No. 549, King Mswati III West
Matsapha Industrial
P.O. Box 1418
Kingdom of Swaziland

RE: African Growth and Opportunity Act; Women’s Knit Top; subheading 9819.11.12; findings and trimmings

Dear Mr. Kao:

The purpose of this correspondence is to respond to your letter dated April 7, 2003 on behalf of Unique Garments International (Pty) Ltd., concerning the eligibility of women’s knit tops for duty free treatment under the African Growth and Opportunity Act (AGOA).

FACTS

The article at issue is a women’s knit pullover garment. The pullover has a round, capped neckline; short, hemmed sleeves; a hemmed bottom and two-inch high side slits. The fiber content of the pullover is 65% polyester, 35% cotton. The knitted fabric of the pullover has more than nine stitches per two centimeters, measured in the direction in which the stitches were formed. Embroidery and three square shaped appliques decorate the chest of the pullover at its front. There is no style number assigned to the garment.

The fabric from which the pullover will be made is knit in Taiwan and subsequently cut, sewn and finished in Swaziland. The thread and appliqués for the pullover also originate in Taiwan. In a phone conversation on July 14, 2003, you provided additional information concerning the cost of the pullover and its components. You provided a sample to assist us in our determination.

ISSUE

Are women’s knit pullover garments that are cut and assembled in Swaziland from fabric that is knit in Taiwan eligible for lesser developed beneficiary country preferential tariff and quota treatment pursuant to the African Growth and Opportunity Act, under subheading 9819.11.12, Harmonized Tariff Schedule of the United States (HTSUS)?

LAW AND ANALYSIS

The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty- and quota-free benefits extended to textile and apparel articles under the Act. Swaziland was designated a beneficiary country by Presidential Proclamation 7400, published in the Federal Register on January 23, 2001, 66 Fed. Reg. 7373. It was determined to be eligible for textile benefits under the AGOA by the USTR effective July 26, 2001. See 66 Fed. Reg. 41648, dated August 8, 2001.

The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XIX, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at §§ 10.211 through 10.217 of the Customs Regulations (19 CFR 10.211 through 10.217).

Heading 9819, HTSUS provides that preferential treatment shall apply to articles imported from a designated beneficiary sub-Saharan African country enumerated in U.S. note 1 to the subchapter. U.S. Note 1 to Subchapter XIX states that the tariff treatment provided therein in shall be accorded only to textile articles that are described in such subheadings and imported directly into the customs territory of the United States from those beneficiary sub-Saharan African countries previously designated by proclamation which have subsequently been determined in a Federal Register notice issued by the USTR to have satisfied the requirements of AGOA.

U.S. Note 1 lists Swaziland as having been found by the USTR to have satisfied the requirements of AGOA.

Apparel articles wholly assembled in a sub-Saharan African lesser-developed beneficiary country (LDC) and directly imported into the U.S. are entitled to duty free status, subject to certain restrictions. Such articles are entered under subheading 9819.11.12, HTSUS, which provides as follows: “Apparel articles wholly assembled, or knit-to-shape and wholly assembled, or both, in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, regardless of the country of origin of the fabric or the yarn used to make such articles, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive.” U.S. Note 2(d) lists Swaziland as qualifying for designation as a LDC. U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, provides for a quantitative restriction for apparel articles classified in subheading 9819.11.12, HTSUS.

The specific issue CBP must resolve is whether the garment is wholly assembled, or knit to shape and wholly assembled in Swaziland and therefore qualifies for AGOA treatment or whether the fact that the knit fabric, appliqués and thread around the appliques originate in Taiwan, preclude the importer from obtaining preferential tariff treatment. The garments subject to this ruling letter are assembled in Swaziland from fabric that is knit in Taiwan. The garment also consists of three appliqués that are woven in Taiwan and thread that is from Taiwan. In Swaziland, the fabric is cut into component panels and the component panels are sewn together to form the pullovers. The appliqués are also sewn onto the garment in Swaziland. AGOA eligibility requires that the apparel articles be "[w]holly assembled in" the lesser developed beneficiary sub-Saharan African country to be eligible for lesser developed country benefits. "Wholly assembled in," for the purpose of textile and apparel articles under the AGOA, “means that all of the components of the textile or apparel article (including thread, decorative embellishments, buttons, zippers, or similar components) were joined together in one or more beneficiary countries or one or more lesser developed beneficiary countries.” 19 C.F.R. 10.212. The assembly process of the women’s knit pullover meets the regulatory definition of "[w]holly assembled in."

Subheading 9819.11.12, HTSUS, specifically provides that the country of origin of the fabric is not a consideration. Since the country of origin of the fabric is not relevant to the receipt of AGOA lesser developed beneficiary country preferential tariff and quota treatment, provided the other requirements of the Act are met, the fact that the fabric originates in Taiwan does not have an affect on benefit eligibility. But see HQ 965961 (Jan. 15, 2003) (holding that a garment assembled in a lesser developed beneficiary sub-Saharan African country from fabric and garment components formed in a country other than a lesser developed beneficiary country is not eligible for AGOA lesser developed country benefits).

FINDINGS AND TRIMMINGS

Having established that the origin of the fabric is not a consideration for AGOA eligibility, we must determine whether the appliques on the garment constitute findings and trimmings.

U.S. Note 3(a)(i), to Subchapter XIX, Chapter 98, provides that:

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; or

U.S. Note 3(b) to Subchapter XIX, Chapter 98, states:

For purposes of subdivision (a)(i) above, findings or trimmings eligible under such subdivision include 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 2.54 cm in width and used in the production of brassieres. . . .

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," CBP 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 were not "findings and trimmings" because they comprised a large surface area of the garment and served 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 965426, dated April 23, 2002, Customs held that a woven decorative patch sewn to the chest area of a sleeveless knit top is a "trimming" for purposes of the CBTPA.

In the instant case, the three appliqués each depict a different type of flower, are clearly ornamental in nature and are relatively small. The appliqués are on the front of the garment and serve a decorative purpose. Accordingly, we find that the three woven fabric appliqués are "trimmings" for purposes of the AGOA.

The value of the findings and trimmings in the instant case is approximately eight percent of the cost of the components of the assembled article. Accordingly, the findings and trimmings on the garment do not exceed 25 percent of the cost of the components of the garment and therefore do not preclude it from qualifying for AGOA preferential treatment. See U.S. Note 3(a)(i), to Subchapter XIX, Chapter 98, above.

The women’s knit pullovers meet the requirements of subheading 9819.11.12, HTSUS, as well as the U.S. Notes to Subchapter XIX and are, therefore, eligible to receive the preferential tariff and quota benefits provided for by the African Growth and Opportunity Act.

HOLDING

The women’s knit pullovers are eligible to receive the lesser developed beneficiary country preferential tariff and quota benefits of the African Growth and Opportunity Act.

They are classified in subheading 9819.11.12, Harmonized Tariff Schedule of the United States.

They should be entered under Preference Group E and Visa Group 5.

Statistical reporting of the merchandise should be in accordance with Chapter 98, Subchapter XIX, U.S. Statistical Note 1.

The Column 1 Special Rate of Duty is FREE.

Sincerely,

Myles B. Harmon, Director

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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.
• Tariff No.: 9819.11.12 - AGOA goods: Apparel articles assembled in a lesser developed AGOA and subject to quota in US note 2 to this subchapter entered til 9/30/2012