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HQ 966805

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January 14, 2004

CLA-2 RR:CR:TE 966805 BAS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9819.11.12

Ms. Melissa Weiss
Barthco Trade Consultants
721 Chestnut Street
Philadelphia, PA 19106

RE: African Growth and Opportunity Act; Findings and Trimmings; Lesser Developed Country; Swaziland

Dear Ms. Weiss:

This is in response to your letter dated October 2, 2003, on behalf of your client, Leonard Feinberg, Inc., requesting a binding ruling on the eligibility of four women’s garments for preferential treatment under the African Growth and Opportunity Act (AGOA). Two of the garments have been ruled upon under NY J88419, dated October 3, 2003. The issue of the eligibility of two pairs of women’s shorts, Styles 200734 and Style 5065261, has been referred to this office for a direct response to you. Samples of the garments were submitted to our office for our consideration.

FACTS:

At issue are two samples of women’s shorts, constructed from 60 percent cotton and 40 percent polyester knit fabric. We note, however, with regard to the submitted samples, that the cardboard tag on Style 200734 reads “cotton” and the cardboard tag on Style 5065261 reads “100% polyester.”

Style 200734 is a pair of women’s shorts with an elasticized waistband and capped leg openings. The capping fabric that finishes the leg openings continues up each side, covers the side seams, and extends over the waistband. The shorts also have a cross applique in front and the word “Lifeguard” appliqued in back, in individual letters. The cross applique is approximately one and a half inches high and one and a half inches wide. The individual letters spelling out the word “Lifeguard” are approximately two and a quarter inches high and one inch wide. Small pieces of pellon

(non-woven) backing can be seen behind several of the letters. The label on the inside seam in the back of the shorts reads, “raya sun.”

Style 5065261 is a pair of fully lined women’s knit mesh shorts with a covered elasticized waistband, two front pockets, a drawstring, and hemmed leg openings. It also has two strips of fabric sewn on either side of the side seams, an applique in the form of the letter T with a star to its upper right on the left front pocket and the word, “Trouble,” formed by a heat transfer appears on the back. The label on the inside waistline in the back of the shorts reads, “Ravegirl.”

The shorts will be cut and assembled in Swaziland. For style 5065261, all the fabric and trimming will be shipped in rolls from Taiwan to Swaziland. The sewing thread, drawcord, plastic tips, elastic and heat transfers will originate in Taiwan and be sent to Swaziland in separate pieces. For style 200734, all the fabric and trimmings will be shipped in rolls from Taiwan to Swaziland. The sewing thread, embroidery thread, pellon backing, and applique fabric will originate in Taiwan in separate pieces. We assume that the elastic used in the waistband is also imported in rolls. You did not provide the origin of the labels in the back of either pair of shorts.

ISSUE:

Whether the subject apparel articles are eligible for preferential treatment under the AGOA?

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).

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.

The garments subject to this ruling letter are assembled in Swaziland from fabric that is formed in Taiwan and shipped to Swaziland in rolls. The fabric for Style 5065261 includes the body fabric, lining fabric, narrow fabric used as an overlay, drawcord and elastic fabric used in the waistband. For style 200734, the fabric includes the body fabric, narrow fabric used as a finishing for the leg openings and as trim, and elastic fabric used in the waistband.

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 shorts 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 fabrics used to make the garments originate in Taiwan does not have an affect on benefit eligibility.

The elastic fabric imported in rolls from Taiwan to make the waistband of the women’s shorts in Swaziland will not render the shorts ineligible for classification in subheading 9819.11.12, HTSUSA. See HQ 966761, dated December 15, 2003; HQ 562766, dated August 6, 2003 (the use of non-U.S. or non-beneficiary country elastic fabric imported in rolls would not render garment ineligible for classification in subheading 9819.11.12, HTSUSA). In addition, the drawcord material used in Style 5065261 would be considered non-originating fabric under the AGOA and would not preclude the completed garment from eligibility for duty free treatment under subheading 9819.11.12, HTSUSA. See HQ 966761, dated December 15, 2003; HQ 966585, dated September 24, 2003.

Provided the findings and trimmings on the garments do not exceed 25 percent of the cost of the components of the garments, they will not preclude the garments from qualifying for AGOA preferential treatment. See U.S. Note 3(a)(i), to Subchapter XIX, Chapter 98, below. Having established that the origin of the fabric is not a consideration for AGOA eligibility, we must determine whether the “Lifeguard” and cross applique on Style 200734 and the Letter “T,” star applique and heat transfer of the word “Trouble” on Style 5065261 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—
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 in pertinent part:

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. Accordingly, plastic drawstring tips and sewing thread will qualify as findings and trimmings.

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. or 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).

In HQ 559738, dated July 2, 1996, CBP 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 HQ 560520, dated September 22, 1997, and HQ 560726, dated December 12, 1997. Moreover, in HQ 965426, dated April 23, 2002, CBP held that a woven decorative patch sewn to the chest area of a sleeveless knit top is a "trimming" for purposes of the CBTPA. Moreover in HQ 562027, dated May 23, 2002, we determined that foreign-origin heat transfers, which are used to provide ornamentation to t-shirts, are "trimmings" for purposes of the CBTPA. See also HQ 966761, December 15, 2003.

The cross applique in the front and the word, “Lifeguard” appliqued on the back of Style 200734 as well as the “T” and star applique and the “Trouble” heat transfer on Style 5065261 are clearly used to provide ornamentation to the shorts and qualify as trimmings. The appliques and heat transfer are clearly ornamental in nature and serve a decorative purpose. Accordingly, we find that the cross applique on the front of Style 200734 and the word “Lifeguard” letters appliqued on the back, and the “T” and star applique on the front of Style 5065261 and the word “Trouble” heat transfer on Style 5065261 are trimmings for purposes of the AGOA.

The pellon backing used in Style 200734 is used to provide support for the application of the applique and embroidery and is then mostly removed. In this case, as the pellon backing is used to support the embroidery and applique and then substantially removed, we find it to be a “finding” necessary to create the decorative embroidery and applique.

The labels sewn into the back of the shorts, which read “raya sun,” on Style 200734 and “ravegirl” on Style 5065261 would also be considered findings. We assume that the labels are non-originating fabric.

HOLDING:

The 60 percent cotton/40 percent polyester women’s shorts, Style 200734, with a cross applique in front and the word “Lifeguard” applied on the back, and Style 5065261, with the “T” and star appliques on the front and the “Trouble” heat transfer on the back meet the requirements of subheading 9819.11.12, HTSUSA, 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 AGOA provided the value of the findings and trimmings used in the garments does not exceed the cost limitation set forth in AGOA.

The use of foreign origin sewing thread, elastic fabric, drawcord fabric, heat transfer, appliques, plastic tips and pellon backing will not render the garments ineligible for preferential treatment under the AGOA provided the garments otherwise meet the requirements for classification within an AGOA provision and provided the value of the foreign-origin findings and trimmings does not exceed 25 percent of the total cost of the components of the garments.

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.: 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