CLA-2 CO:R:C:S 557195 WAW
TARIFF No.: 9802.00.80
Mr. Thomas Caldecot Chubb, III
Oxford Industries, Inc.
222 Piedmont Ave., N.E.
Atlanta, GA 30308
RE: Applicability of the partial duty exemption available under
subheading 9802.00.80, HTSUS, to garments subjected to a
washing process while abroad; 554482; 554497; 554695; fabric
softener; detergent; incidental to assembly
Dear Mr. Chubb:
This is in response to your letters dated March 10, August 3,
and October 4, 1993, concerning the applicability of the partial
duty exemption available under subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS), to garments
subjected to a washing process while abroad and returned to the
U.S. A sample of the merchandise was submitted for our review.
FACTS:
You propose to import men's and women's trousers and shorts
into the U.S. from the Dominican Republic. The trousers and
shorts will be made from a variety of different fabrics. The
garments will be assembled from fabric that has been cut into
garment parts in the U.S. and then shipped abroad for assembly.
In the Dominican Republic, the garment parts will be sewn into
trousers and shorts at an offshore assembly plant. After
assembly, the garments will be washed with a detergent and enzyme
fabric softener to give the garments a softer, smoother feel. You
state that this process will not substantially alter the color of
the fabric. Upon completion of the above-described processes, the
washed trousers and shorts will be returned to the U.S.
You believe that the assembly of the U.S.-origin pre-cut
fabric pattern pieces into trousers and shorts and the subsequent
washing operations described above are proper assembly operations
and operations incidental to the assembly process and, thus, the
garments should qualify for the partial duty exemption available
under subheading 9802.00.80, HTSUS.
ISSUE:
Whether the trousers and shorts which are assembled from
U.S.-origin components and washed abroad will be entitled to the
partial duty exemption available under subheading 9802.00.80,
HTSUS, when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, provides a partial duty exemption
for:
[a]rticles assembled abroad in whole or in part of
fabricated components, the product of the United States,
which (a) were exported in condition ready for assembly
without further fabrication, (b) have not lost their
physical identity in such articles by change in form, shape
or otherwise, and (c) have not been advanced in value or
improved in condition abroad except by being assembled and
except by operations incidental to the assembly process such
as cleaning, lubricating and painting.
All three requirements of subheading 9802.00.80, HTSUS, must be
satisfied before a component may receive a duty allowance. An
article entered under subheading 9802.00.80, HTSUS, is subject to
duty upon the full value of the imported assembled article less
the cost or value of the U.S. components, upon compliance with
the documentary requirements of section 10.24, Customs
Regulations (19 CFR 10.24).
Section 10.16(a), Customs Regulations (19 CFR 10.16(a))
provides, in part, that:
The assembly operations performed abroad may consist of any
method used to join or fit together solid components, such
as welding, soldering, riveting, force fitting, gluing,
laminating, sewing, or the use of fasteners, and may be
preceded, accompanied, or followed by operations incidental
to the assembly as illustrated in paragraph (b) of this
section.
Operations incidental to the assembly process are not
considered further fabrication operations, as they are of a minor
nature and cannot always be provided for in advance of the
assembly operation. See section 10.16(a), Custom Regulations (19
CFR 10.16(a)). For instance, section 10.16(b)(1), Customs
Regulations (19 CFR 10.16(a)), provides that cleaning is an
incidental operation. However, any significant process, operation
or treatment whose primary purpose is the fabrication,
completion, physical or chemical improvement of a component
precludes the application of the exemption under HTSUS subheading
9802.00.80 to that component. See 19 CFR 10.16(c). The Customs
Regulations expressly provide that the chemical treatment of
components or assembled articles to impart new characteristics,
such as shower-proofing, permapressing, sanforizing, dyeing, or
bleaching of textiles, is not considered incidental to the
assembly process. 19 CFR 10.16(c)(4).
In United States v. Mast Industries. Inc., 515 F. Supp. 43, 1
CIT 188 (1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981), the
court, in examining the legislative history of the meaning of
"incidental to the assembly process," stated that:
[t]he apparent legislative intent was to not preclude
operations that provide an "independent utility" or that are
not essential to the assembly process; rather, Congress
intended a balancing of all relevant factors to ascertain
whether an operation of a "minor nature" is incidental to
the assembly process.
The court then indicated that relevant factors included:
(1) whether the relative cost and time required by the
operation are such that the operation may be considered
minor;
(2) whether the operation is necessary to the assembly
process;
(3) whether the operation is so related to the assembly
that it is logically performed during assembly; and
(4) whether economic or other practical considerations
dictate that the operation be performed concurrently
with assembly.
We are satisfied based on the information and sample
submitted that the U.S. components meet the requirements of
subheading 9802.00.80, HTSUS, and, therefore, are entitled to the
duty allowance available under this tariff provision. The foreign
operations that entail sewing fabric onto itself using any type
of stitch are considered acceptable assembly operations. See
L'Eggs Products. Inc. v. United States, Slip Op. 89-5, 13 CIT 40,
704 F. Supp. 1127 (CIT 1989). Sewing two or more pieces of pre-cut fabric together to create trousers or shorts is considered an
acceptable assembly operation pursuant to 19 CFR 10.16(a).
You claim that the process of washing and softening the
fabric by means of an enzyme fabric softener is in the nature of
a cleaning procedure because it does not change the
characteristics of the fabric. You submit that the primary
difference between a garment which is washed in detergent and
fabric softener and one which is washed in detergent alone, is
that the one washed with detergent and enzyme softener has a
softer, smoother feel. You claim that washing the garments in
detergent and fabric softener does not appear to change the color
of the garment. Therefore, you believe that washing the garments
with detergent and softener in hot water without any bleach is an
operation incidental to the assembly process as provided in 19
CFR 10.16(b).
Customs has consistently held that operations such as
ovenbaking, stone-washing, and bleaching are not incidental to
the assembly process, and U.S. components subjected to such an
operation are precluded from receiving subheading 9802.00.80,
HTSUS, treatment. For example, see HRL 027763 dated September 13,
1973, (notwithstanding the question of whether or not trousers
were structurally or chemically changed by being treated with
synthetic resins before being oven-cured to produce a permanent
press, the fact that the trousers were oven-cured introduced new
characteristics by a non-assembly process, which did not exist
before the heat treatment, i.e., "locking-in" the shape of the
trousers, durable pleats and press creases, durable smooth seams,
"locked-out" wrinkles, machine washability and dryability, and a
fresh appearance without ironing), HRL 555665 dated March 11,
1991 (denim garments, assembled in the Dominican Republic and
stonewashed, were ineligible for a duty allowance under
subheading 9802.00.80, HTSUS; however, other components such as
the buttons, zippers, and thread were eligible for the duty
exemption because the stonewashing process was merely incidental
to their assembly, and had no effect on their intended function),
and HRL 555008 dated March 24, 1989 (U.S.-origin cloth assembled
into pants in Mexico and stonewashed, which constituted washing
the pants with water and a stone and no detergents or softeners,
were precluded from item 807.00, Tariff Schedules of the United
States (TSUS) (the precursor provision of subheading 9802.00.80,
HTSUS), treatment because the process added characteristics that
did not exist prior to assembly).
In HRL 554676 dated November 23, 1987, dyed denim fabric was
assembled into wearing apparel articles in the Dominican
Republic, and then washed in a washing machine. It was stated
that the washing not only cleaned the newly assembled garments of
dust and dirt but also of the excess dye, which would prevent the
dye from running and staining other garments during the first
washing. The detergents used in the foreign washing cycle were
either plain high strength detergent or high strength detergent
containing about 10 percent bleach substance. It was held that
washing the textile articles with high strength detergent was a
process analogous to cleaning, and considered incidental to
assembly; however, washing with a high strength detergent
containing a 10 percent bleach was regarded as too substantial to
be treated as merely incidental. The bleaching changed the color
of the exported fabric, similar to dyeing fabric, and was not
considered an incidental operation. In HRL 554232 dated August
25, 1986, bleaching and softening exported fabric was also
regarded as too substantial to be treated as merely incidental
because there was not only a change in color, but a change in
texture as well.
The foregoing rulings are distinguished from HRL 554695 dated
June 16, 1989, which held that washing of assembled garments made
from U.S.-origin fabricated components abroad with a detergent
and fabric softener in hot water without any bleach is a "minor
procedure with minimal expense which results in little change in
color." We held in HRL 554695 that washing assembled garments
with detergent and fabric softener abroad is considered
"incidental to assembly" and an allowance in duty may be made
under subheading 9802.00.80, HTSUS, for the cost or value of the
U.S. components. See also HRL 554497 dated March 18, 1987
(holding that washing assembled garments of U.S.-origin
components in a standard detergent and softener, tumble drying,
and lightly pressing abroad, are considered operations incidental
to assembly as they are minor in nature, related to the assembly,
and represent a small portion of the total assembly cost); and
HRL 554482 dated March 12, 1987 (holding that washing with an
alkaline detergent and fabric softener, drying, and pressing of
assembled garments of U.S.-origin components are considered
incidental to the assembly operations and an allowance in duty
may be made under item 807.00, Tariff Schedules of the United
States (TSUS) (the precursor to subheading 9802.00.80, HTSUS),
for the cost or value of the U.S. components).
Therefore, at issue is whether the washing and softening
process is more analogous to a cleaning operation, or an
operation which adds new characteristics to the garments, thereby
precluding the fabric from subheading 9802.00.80, HTSUS,
treatment. We are of the opinion that the instant case is more
analogous to those cases which have held that washing in
detergent and fabric softener are operations incidental to
assembly. See HRL 554599; 554497; and 554582. Unlike those cases
involving washing assembled garments with a detergent containing
bleach, as well as ovenbaking and stone-washing, which have been
found not to constitute acceptable incidental operations, the
addition of an enzyme in fabric softener does not alter the color
of the fabric or change its texture. To the extent that there is
any color change at all, it is caused by the washing process
itself and not the enzyme. In addition, the use of an enzyme
fabric softener does not result in a change in the surface
composition of the fabric, which usually occurs in situations
where a garment is washed with a high strength detergent
containing bleach or in a stone-washing operation. Furthermore,
based on information supplied by the importer, the cost of
washing the garments in detergent and fabric softener constitutes
less than five percent of the value of the U.S. components
imported into the Dominican Republic. This clearly represents an
operation which is only minor in nature and incidental to the
assembly process. Therefore, washing the assembled U.S.-origin
garment parts in the Dominican Republic with detergent and an
enzyme fabric softener constitutes an operation which is
incidental to the assembly of the trousers and shorts.
HOLDING:
On the basis of the information provided, it is our opinion
that the foreign operations performed to the U.S.-origin pre-cut
fabric components which include sewing the components together,
and washing in hot water, detergent and an enzyme fabric softener
are considered proper assembly operations and operations
incidental to the assembly process. Therefore, the imported
trousers and shorts maybe entered under subheading 9802.00.80,
HTSUS, with allowances in duty for the cost or value of the U.S.
components incorporated therein, upon compliance with the
documentary requirements of 19 CFR 10.24.
Sincerely,
John Durant, Director
Commercial Rulings Division