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HQ 966806




January 7, 2004

CLA-2 RR:CR:TE 966806 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 September 5, 2003, on behalf of your client, Leonard Feinberg, Inc., requesting a binding ruling on the eligibility of five women’s garments for preferential treatment under the African Growth and Opportunity Act (AGOA). Four of the garments have been ruled upon under NY J88417, dated October 3, 2003. The issue of the eligibility of the women’s shorts with embroidery on the back panels has been referred to this office for a direct response to you. A sample garment was submitted to our office for our consideration.

FACTS:

At issue is a pair of women’s shorts constructed from 60 percent cotton and 40 percent polyester knit fabric. The shorts, style number 50230, have an elasticized waistband with a drawstring, overlock stitching finishing the leg openings and an embroidered floral design across the back panels. The shorts contain a label sewn in at the waistline that reads, “Instant Action.”

The knit fabric for the body of the garment, drawstring fabric and elastic fabric in the waistband will be shipped in rolls from Taiwan to Swaziland. The sewing thread, embroidery thread, plastic tips for the drawstring and pellon (non-woven) backing material will originate in Taiwan and be sent to Swaziland. The fabric will be cut, sewn, embroidered and fully assembled into shorts in Swaziland. Your submission did not mention the origin of the label that is sewn on the inside waistline in the back of the 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. The fabric includes the fabric for the body of the garment, the waistband and the drawstring.

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 garment 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 drawstring material in the instant case 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 embroidery on the shorts and the pellon backing material used in forming the embroidery 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.

The embroidery on the back of the shorts is clearly used to provide ornamentation to the shorts and therefore the embroidery thread used to create the embroidery qualifies as a trimming. The thread is sewn in the shape of flowers and is clearly ornamental in nature and merely serves a decorative purpose. The pellon backing is used for the backing of the embroidery and then mostly removed. In this case, as the pellon backing is used to support the embroidery and then substantially removed, we find it to be a “finding” necessary to create the decorative embroidery.

The label sewn into the back of the shorts, which reads, “Instant Action,” would also be considered a finding. We assume that the label is of a non-originating fabric.

HOLDING:

The women’s shorts with embroidery on the back panels 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.

The use of foreign origin sewing thread, elastic fabric, drawstring fabric, embroidery thread, plastic tips and pellon backing will not render the garment 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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