CLA-2 R:C:S 558708 AT
Teresa A. Gleason, Esq.
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078
RE: Applicability of subheading 9802.00.90, HTSUS, to scarves
with heatable plastic packs; Special Regime Program; Article
509; assembly
Dear Mrs. Gleason:
This is in reference to your letter dated August 19, 1994,
on behalf of R.G. Barry Corporation ("RG Barry"), requesting a
ruling that certain scarves with heatable plastic packs ("energy
packs") to be imported from Mexico will be eligible for duty-free
treatment under subheading 9802.00.90, Harmonized Tariff Schedule
of the United States (HTSUS). We regret the delay in responding.
FACTS:
R.G Barry exports fabric components (consisting of cut-to-shape pieces of polyester fabric measuring approximately 55" x 9"
and non fabric components (rolls of velcro material that are
approximately 1" wide and energy packs comprised of plastic
sheeting filled with a silica sand and paraffin wax substance),
to Mexico to be used in the assembling of heatable scarves. The
heatable scarves are designed to be used by an individual during
the colder months of the year, in the same manner as a
traditional scarf. The energy pack is designed to be placed in a
microwave oven for a certain period of time and heated.
Thereafter, the pack will retain and radiate heat for a number of
hours.
You state that the fabric is "wholly formed" in the U.S. and
will be cut-to-shape (i.e., cut to length and width, and cut with
fringes at the ends) in the U.S. The velcro material rolls and
energy packs will also be manufactured in the U.S. and shipped to
Mexico. According to your submission, the assembly process for
the scarf with its energy pack is as follows: 1) The U.S. origin cut-to-shape fabric will be folded
in half along its length. Thereafter, the material
will be stitched widthwise approximately 17" from one
end. The operator will then turn the material 90
degrees and stitch up the length of the scarf for
approximately 20" to close this portion of the side of
the scarf. This will complete the stitching of the
scarf and leave a "pocket" into which the energy pack
will later be inserted.
2) The U.S. origin velcro material will be unspooled
from the rolls and cut to length, creating velcro
pieces that are approximately 1" square. The operator
will stitch a velcro piece to one side of the interior
surface of the scarf, just above the open end of the
pocket. A mating piece of velcro will then be
positioned directly opposite the first piece and
stitched into place.
3) The U.S. origin energy pack will be inserted into
the pocket and secured therein by pressing the velcro
pieces together.
4) The resulting scarf with its energy pack will be
packaged for retail sale and exported from Mexico into
the United States.
You assert that the subject scarves with energy packs
imported from Mexico are eligible for duty-free treatment under
item 9802.00.80, HTSUS, "NAFTA Special Regime Program".
ISSUE:
Whether the heatable scarves with energy packs will be
eligible for duty-free treatment under subheading 9802.00.90,
HTSUS, upon importation into the U.S.
LAW AND ANALYSIS:
Annex 300-B of the North American Free Trade Agreement
("NAFTA") is applicable to textile and apparel goods. Appendix
2.4 of Annex 300-B provides that:
[o]n January 1, 1994, the U.S. shall eliminate
customs duties on textiles and apparel goods that
are assembled in Mexico from fabrics wholly formed
and cut in the United States and exported from and
reimported into the United States under: (a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such assembly,
those goods that would have qualified for treatment
under 9802.00.80.10 have been subject to bleaching,
garment dyeing, stone-washing, acid-washing or
perma-pressing.
Thereafter, the U.S. shall not adopt or maintain any
customs duty on textile or apparel goods of Mexico that
satisfy the requirements of subparagraph (a) or (b) or
the requirements of any successor provision to U.S.
tariff item 9802.00.80.10.
Consequently, subheading 9802.00.90, HTSUS, was created to
provide for the duty-free entry of:
Textile and apparel goods, assembled in Mexico in which
all fabric components were wholly formed and cut in 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; provided the goods classifiable
in chapters 61, 62, or 63 may have been subject to
bleaching, garment dyeing, stone-washing, acid-washing
or perma-pressing after assembly as provided for herein.
"Textile and Apparel Goods"
The initial question we must address is whether the subject
scarf with energy pack is considered a "textile and apparel good"
under subheading 9802.00.90, HTSUS.
"Textile and apparel goods" eligible for duty-free treatment
under subheading 9802.00.90, HTSUS, are listed in Appendix 1.1 of
Annex 300-B of the NAFTA. Chapter 62 of Appendix 1.1 includes
among such goods "6214.30 (shawls, scarves, veils and the like,
of synthetic fibers, not knitted or crocheted)". Thus, the
subject scarf will qualify as a "textile and apparel good" if it
is classified under subheading 6214.30.00, HTSUS, and is not
knitted or crocheted. After inspection of the submitted sample,
we find that the article is a scarf made up of synthetic fibers
which are not knitted or crocheted, and is classifiable under
subheading 6214.30.00, which provides in part for "shawls,
scarves, mufflers, mantillas, veils and the like of synthetic
fibers ..". Therefore, the subject scarf is a "textile and
apparel good" eligible for duty-free treatment under subheading
9802.00.90, HTSUS. FABRICATION AND ASSEMBLY
Since subheading 9802.00.90, HTSUS, was intended as a
successor provision to subheading 9802.00.80, HTSUS, with respect
to certain textile and apparel goods assembled in Mexico, the
regulations under subheading 9802.00.80, HTSUS, may be
instructive in determining whether a good is eligible for the
beneficial duty treatment accorded by subheading 9802.00.90,
HTSUS. (In this regard, however, as distinguished from
subheading 9802.00.80, HTSUS, it is noted that the new statute
requires only that all fabric components be formed and cut in the
U.S., and that only such components need be exported from the
U.S. in condition ready for assembly without further
fabrication.)
Under section 10.14(a), Customs Regulations (19 CFR
10.14(a)), components will not lose their entitlement to the
benefits of subheading 9802.00.80, HTSUS, by being subjected to
operations incidental to the assembly before, during, or after
the assembly with other components. Pursuant to section
10.16(a) of the Regulations (19 CFR 10.16(a)), the assembly
operations performed abroad may consist of any method used to
join or fit 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 process. Examples of
operations incidental to the assembly process include trimming,
filing, or cutting off of small amounts of excess materials, and
cutting to length of wire, thread, tape, foil and similar
products exported in similar length. (19 CFR 10.16(b)(4) and
(b)(6)).
In the instant case, the sewing operations used to join the
fabric components to make the scarf body are acceptable assembly
operations. See, L'eggs Products, Inc v. United States, 704 F.
sup. 1127, 1134 (CIT 1989) (the joining of fabric and thread
constitutes and assembly of two separate components).
Accordingly, the heatable scarves with energy packs that are
assembled in Mexico may be entered free of duty, provided all
fabric components are wholly formed (i.e., the fabric is woven or
milled in the U.S.) and cut in the U.S.
HOLDING:
1) Heatable scarves with energy packs made up of synthetic
fibers which are not knitted or crocheted, are classifiable under
subheading 6214.30.00, which provides in part for "shawls,
scarves, mufflers, mantillas, veils and the like of synthetic
fibers ..". Therefore, the subject scarves are considered to be
"textiles and apparel goods" for purposes of determining its
eligibility under subheading 9802.00.90, HTSUS. 2) Since the operations performed in Mexico in connection
with the fabric components are acceptable assembly operations or
operations incidental to such assembly, the imported heatable
scarves with energy packs will qualify for duty-free treatment
under subheading 9802.00.90, HTSUS, provided all such components
are cut and formed in the U.S.
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,
John Durant, Director
Commercial Rulings Division