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first page of your letter beginning on the next line. (This red text will not print.)> HQ 966639

October 22, 2003

CLA-2 RR:CR:TE 966639 TMF

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.12

Paul Ryberg, Jr.
Ryberg and Smith, LLP
Canal Square
1054 Thirty-Fifth Street, N.W.
Washington, DC 20007

RE: Eligibility of girls’ cotton Bedford corduroy shorts with accommodating foreign-origin textile belt under the African Growth and Opportunity Act (AGOA)

Dear Mr. Ryberg:

This is in response to your letter dated July 17, 2003, on behalf of your client, China Garments Manufacturing (Pty) Ltd. (CGM), in which you requested a binding ruling on the eligibility of certain girls’ shorts and textile belt under the African Growth and Opportunity Act (AGOA). Your request along with one sample was sent to our office.

FACTS:

You state that your client has offices in South Africa and maintains four apparel manufacturing factories located in Lesotho. Your client proposes to manufacture at one or more of its Lesotho factories the subject shorts which will be ultimately exported to the United States with a textile belt that is described below.

The subject shorts will be made for girls from 7 oz. 100 percent cotton Bedford corduroy fabric that is produced in China. You state that the corduroy fabric will be light blue in color, however the sample that you submitted to our office arrived in tan color. The subject shorts will also include a belt which will be made of 100 percent cotton webbing of light khaki color and will include a nickel buckle, nickel eyelets and a nickel slider. The subject belt will be inserted through belt loops on the shorts, but not attached to the shorts. It will be sourced from Taiwan already completely manufactured. You also indicated that the belt is of a standard style that is suitable for use with other shorts or trousers.

ISSUE: Whether the subject shorts are eligible for AGOA preference.

Whether the short’s eligibility under the AGOA would be affected by the inclusion of the textile belt, assuming all other AGOA eligibility requirements are met.

Whether the belt would be subject to a separate duty rate (assuming the shorts are eligible for AGOA preference).

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. Lesotho was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59321). It was determined to be eligible for textile benefits under the AGOA by the USTR effective March 7, 2001 (66 Fed. Reg. 14425).

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).

Classification of the Shorts and Textile Belt

If imported separately, the belt would be classified in subheading 6217.10.9510 HTSUSA, which provides, among other things, for other made up clothing accessories; Of cotton. The shorts, if imported separately, would be classified in subheading 6204.62, HTSUSA, which provides, in pertinent part, for girls’ cotton shorts.

As the tariff does not contain a heading that specifically provides for shorts and belts, together, classification cannot be based on GRI 1. GRI 3 applies to goods that are prima facie classifiable under two or more headings. GRI 3 states, in pertinent part, the following:

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

We note that prior to application of GRI 3(b), we must determine if the pants and shorts constitute a composite good or goods put up in a set. While this distinction will not affect the essential character determination, it will affect the quota/visa requirements for the goods. See Headquarters Ruling Letter (HQ) 953069, dated April 5, 1993 (discussing the distinction between goods put up in a set versus composite good in the classification of a girls’ romper with textile string tie as a composite good and romper with a western style plastic belt as a set).

CBP (formerly, U.S. Customs Service) has issued numerous rulings on the classification of garments with accommodating non-textile belts that are classified as goods put up as sets for retail sale. We refer you to HQ 557366 dated October 6, 1993 classifying men’s cotton pants containing a vinyl belt as a set; New York Ruling Letter (NY) I85652, dated September 20, 2002, classifying cotton woven denim women’s shorts and accommodating belt made of braided suede leather; see also HQ 084423, dated August 3, 1989, HQ 084184, dated July 28, 1989, and HQ 083988, date June 15, 1989, all which classify garments (shorts, trousers and shorts) that have accommodating non-textile belts as sets rather than a composite good; but see HQ 083853, dated May 17, 1989, classifying boys’ trousers and woven acrylic belt as a composite good.

With regard to goods put up in sets for retail sale, we refer you to the Explanatory Notes to the Harmonized Commodity Description and Coding System (EN). Although not legally binding, the ENs are the official interpretation of the tariff at the international level. Explanatory Notes (IX) to GRI 3(b) define composite goods made up of different components as:
not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

For goods put up in sets for retail sale, the ENs define sets as goods which:
consist of at least two different articles which are, prima facie, classifiable in different headings; consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking.

In this instance, the subject shorts and belt are separable components that will be made in different colors and different styles of cotton fabric. The shorts will be made in a light blue color of cotton Bedford corduroy and the accommodating belt will be made of khaki-colored, webbed cotton. You also stated that the subject belt is a standard type of belt suitable for use with other shorts and trousers. It is our opinion that the subject belt and shorts meet the definition of goods put up in sets for retail sale. We refer you to HQ 953069, supra, stating, in pertinent part:

While it is true that textile belts sold with garments may be treated as composite goods CBP has issued rulings that address whether garments with accompanying textile belts are classifiable as a set or composite good under GRI 3(b). We refer you to review HQ 956123, dated July 14, 1994, which modified PC 893190 dated December 20, 1993, by reclassifying a woman’s romper and textile belt as a GRI 3b composite good rather than the original classification as separates in PC 893190 on the basis that the goods were mutually complementary in their use and not normally offered for sale as separate articles. (HQ 956123 also noted that it was issuing the determination in accordance with two Headquarters’ decisions, HQ 081619 dated October 6, 1988 and HQ 083853 dated May 17, 1989.) It also stated in dicta: “It is Customs view that generally when a textile belt is imported with a garment and it is intended to be sold at the wholesale and retail level as a single unit, the articles will be considered composite goods for tariff classification purposes.” Id.; referring also to HQ 954073, dated September 23, 1993 which classified a dress and textile belt as a composite good. For more rulings which follow this view, see also HQ 955523, dated June 23, 1994 which modified NY 891355, dated October 26, 1993 and reclassified a women’s woven pants with a jute belt as a composite good; HQ 956540, dated September 7, 1994; NY J85601, dated June 25, 2003, determined that a textile belt and pants were a composite good with the pants determining the classification within the Israeli Free Trade Agreement; HQ 081619, dated October 6, 1988, classifying men’s trousers with cotton twill belt as composite goods; HQ 956540, dated September 7, 1994, classifying women’s shorts with a textile belt as a composite good.

However, in this instance, the position taken by HQ 956123 that garments with textile belts are classifiable as composite goods is inapplicable. For further details see above., the sample belt is of a different material that (sic) the garment (PVC to the garment's 100 % cotton), is a completely different color than the garment (brown to the garment's primary blue), and could easily be sold separately to match an indeterminable number of clothing articles.

We find this analysis to be equally applicable in the instant case as the subject shorts and belt are not mutually complementary in their use because like the romper and belt of HQ 953069, the subject unit may be “sold separately to match an indeterminable number of clothing articles.” Further, although the subject short and the accommodating textile belt are adapted to each other in that the loops are sized to accommodate the belt, we do not find these two articles to be composite goods as defined by EN IX to GRI 3(b) because of their vast coloration and textual distinctions, as well the importer’s statement that the subject belt is a standard belt of a kind that is suitable for use with other shorts and trousers. The shorts and belt are of a type normally sold separately. Thus, it is our opinion that in this particular case, the subject articles are not composite goods. They are GRI 3(b) goods put up in set for retail sale because they are put up in a manner suitable for sale directly to users without repacking and also because they serve a particular purpose together as the belt further secures the shorts around the wearer’s waist.

Finally, in determining the essential character of the subject merchandise in accordance with GRI 3(b), CBP looks to various factors for guidance. Such factors include, but are not limited to, the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods. In this instance, the shorts impart the essential character of the unit while the cotton-webbing belt is merely an accessory that accents the shorts.

AGOA Eligibility of the Shorts Under Subheading 9819.11.12, HTSUSA

You requested whether the subject shorts that will be manufactured in Lesotho, a lesser-developed country, are eligible for AGOA preference and whether their eligibility would be affected by the inclusion of the textile belt, assuming all other AGOA eligibility requirements are met. Subheading 9819.11.12, HTSUSA, provides:

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.

The fabric used in the shorts is imported from a third (non-beneficiary) country and is cut into components which are wholly assembled in Lesotho into the girls’ shorts. Thus, the subject shorts alone qualify for preferential treatment under the AGOA under subheading 9819.11.12, HTSUSA.

Inclusion of the Textile Belt with the Shorts and AGOA Eligibility

With regard to the inclusion of the foreign-origin textile belt, CBP has issued rulings on whether a foreign-origin textile belt that is imported with a garment is eligible for AGOA preference. We refer you to HQ 562349, dated September 12, 2003, which addressed this issue. In HQ 562349, CBP determined that a pair of women’s cotton twill belted capris, identified as Style SU02, which contained a foreign-origin braided fabric belt threaded through button-hole openings around the waist were determined to be a composite good under GRI 3(b) on the basis that they were mutually complementary in their use, packed together and would not normally be offered for sale as separate articles. CBP also determined that the foreign-origin belt was not a “finding” or “trimming” and consequently the belt would disqualify the garment from receiving AGOA preference if the two articles were imported together. The same analysis applies to the instant case.

While "findings and trimmings" for purposes of the AGOA was not specifically defined Note 3, Subchapter XIX, Chapter 98, provides, in relevant part, that:

[a]n article otherwise eligible for preferential treatment under any provision of [subchapter XIX] 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;

For purposes of subdivision (a)(i) above, findings and 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 and trimmings only if they are each less than 2.54 cm in width and used in the production of brassieres. For purposes of articles described in subheading 9819.11.06 and 9819.11.30, sewing thread shall not be considered to be findings or trimmings., the examples set forth, 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. With regard to what items constitute "findings" or "trimmings," Customs has previously held under subheading 9802.00.90, HTSUSA, that fabric items such as shoulder pads, sleeve headers, and velveteen collars are not "findings and trimmings." See Headquarters Ruling Letter (HQ) 559552, dated February 14, 1996, and HQ 558954, dated June 30, 1995. In HQ 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, HTSUSA (formerly known as the “Special Regime Program”) and the Special Access Program. See HQ 560520, dated September 22, 1997, and HQ 560726, dated December 12, 1997. Moreover, in HQ 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. 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).

Thus, upon examination of the submitted woven textile belt, it is our opinion that this article is designed to be used to accessorize the shorts, not to function in a manner as buttons or zippers, which are used to fasten or close garments. Although the subject shorts and foreign-origin belt are a GRI 3(b) set in that they are designed for a particular use (the use being that the belt accents the shorts and further secures the shorts around the wears waist), this is not controlling with regard to the goods’ preferential treatment under the AGOA. Accordingly, we find that the subject textile belt is not a “finding” or “trimming” for purposes of the AGOA, but a foreign fabric component that is an accessory which is ineligible for AGOA preference. See HQ 966495, dated July 3, 2003, which determined the inclusion of a PVC belt would not preclude the women’s polyester-cotton pants from AGOA eligibility. We note that HQ 966495 also found the PVC belt to be an accessory to pants and not a “finding” or “trimming”; see also HQ 966585, dated September 24, 2003 determining that textile drawstrings were ineligible for AGOA preference as they are considered to be fabric components and not “findings” and “trimmings” and citing to HQ 559794, which determine that textile drawstring cord was a fabric component under the NAFTA. Thus, if you include the belt with the subject shorts, the shorts will be precluded from eligibility under the AGOA and both articles will be classified together as a set pursuant to GRI 3(b) in subheading 6204.62.4065, HTSUSA.

HOLDING:

The cotton Bedford corduroy shorts, if imported with the accommodating cotton webbing, foreign-origin belt, will be ineligible for AGOA benefits. Pursuant to GRI 3(b), the shorts and belt, if imported together, will be classified as a set with the essential character determined by the shorts, classifiable in subheading 6204.62.4065, HTSUSA, which provides, in pertinent part, for girls’ cotton shorts, dutiable at 16.7 percent ad valorem, quota category 348. Whether or not the belt is imported separately, it remains subject to quota and visa requirements. If the belt is imported separately, it will be classified in subheading 6217.10.9510, HTSUSA, which provides, in pertinent part, for other made up clothing accessories, dutiable at 14.7 percent ad valorem, quota category 359.

The designated textile and apparel category may be subdivided into parts. If so, the visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, previously available on the Customs Electronic Bulletin Board (CEBB), which is available on the CPB website at www.customs.gov.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements

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, Director
Commercial Rulings Division

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See also:

• Tariff No.: 6204.62.40 - Women's or girls' trousers, breeches and shorts, not knitted or crocheted, of cotton, nesoi
• Tariff No.: 6217.10.95 - Made up clothing accessories (excl of heading 6212 or headbands, ponytail holders & like), containing < 70% wgt of silk, not knit/crochet
• 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.: 9819.11.06 - AGOA goods: Apparel articles cut in one or more AGOA from US formed fabric of US formed yarn assembed in AGOA with US thread
• 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
• Tariff No.: 9819.11.30 - AGOA goods: Apparel articles sewn/assembled in AGOA country with US thread and any combination of certain cutting or knit-to-shape operation