CLA-2 RR:TC:SM 559738 MLR
Ms. Erin Yeary
Daniel B. Hastings, Inc.
P.O. Box 673
Laredo, Texas 78042-0673
RE: Applicability of subheading 9802.00.90, HTSUS, to wool
jackets; Special Regime; findings; trimmings; shoulder
pads; chest piece; sleevehead; synthetic suede yoke;
Mexico; NAFTA Preference treatment; country of origin
marking; Article 509
Dear Ms. Yeary:
This is in reference to your letter of March 8, 1996,
requesting a ruling on behalf of Pendleton Woolen Mills,
regarding wool jackets assembled in Mexico. Samples of a
men's wool jacket, a shoulder pad, chest piece, sleevehead,
and synthetic suede yoke were submitted with your request.
FACTS:
The articles at issue are wool jackets stated to be
classifiable under subheading 6203.31.00, HTSUS. The
following materials will be used to make two styles of
"country coats" in Mexico:
Material Country of Origin Classification
Wool Shell USA 6217
Felt USA 5602
Acetate lining USA 5407
Fusible (Pocket and Shell) USA 5603
Interlining USA 5603
Ornamental Trim - yokes, Japan 5603
elbow patches (only used on
style D345)
Buttons Italy 9606
(USA for style D345)
Shoulder pad USA 5603
Chest Piece USA 5603
Sleeve head USA 5603
Various types of tape USA 5603 or
5806
Various types of labels USA 5810
Joker Ticket USA 5807
For purposes of this ruling request, we are presuming
that the classification headings provided to us are correct.
The ornamental trim (i.e., yokes and elbow patches) consists
of 60 percent polyamide/40 percent polyurethane. The
packaging is indicated to be of U.S. origin. The jacket
contains a label in the neck with the marking "Made in
Mexico." The sample submitted also contains labels on the
inside pocket of the jacket, one in blue with the words
"Warranted to be a Pendleton 100% Pure Virgin Wool Portland,
Oregon Since 1863," and the other in white attached to the
blue label with the marking "Made in Mexico."
ISSUES:
I. Whether the shoulder pads, chest pieces, sleeve headers,
and synthetic suede yokes and elbow patches may be
considered "findings or trimmings" for purposes of
subheading 9802.00.90, HTSUS.
II. Whether the jacket may qualify for preferential tariff
treatment under the North American Free Trade Agreement
(NAFTA) if the Japanese synthetic suede yoke and elbow
patches are cut in the U.S. or Mexico and sewn in Mexico,
and all other components originate in the U.S. and/or
Mexico.
III. Whether the white label with the country of origin
of the jacket must be placed on the inside pocket
next to the blue label with the words "Portland,
Oregon."
LAW AND ANALYSIS:
I. Findings and Trimmings
Appendix 2.4 of Annex 300-B of the NAFTA, provides that:
[o]n January 1, 1994, the U.S. shall eliminate customs
duties on textile 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 and 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, provided that such fabric components, in
whole or in part, (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 that 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.
In view of the fact that the enactment of subheading
9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods assembled in Mexico,
which previously were eligible for entry under the Special
Regime Program administered under U.S. tariff item
9802.00.8010, HTSUS, it is Customs view that all of the
policy directives implementing this program should be
considered applicable in the administration of subheading
9802.00.90, HTSUS. One such policy under the Special Regime
Program included the allowance of "findings, trimmings, and
certain elastic strips of foreign origin" to be incorporated
into the assembled good "provided they do not exceed 25
percent of the cost of the components of the assembled
product." Examples of findings and trimmings are sewing
thread, hooks and eyes, snaps, buttons, "bow buds," lace
trim, zippers, including zipper tapes, and labels. See 53 FR
15726 (May 3, 1988). We also note that "findings" have been
defined as "threads, tapes, buttons, bindings, hooks and
eyes, slide fasteners, Featherbone, belting, braids, and
other sewing essentials used in garment making,"and trimming
is defined as "decoration or ornamental parts." See M.
Picken, The Fashion Dictionary (1973). "Findings" are also
defined as "a term referring to supplementary fabrics
employed in making a garment such as zipper tapes, lining,
pocketing, and waistband." See I. Wingate, Fairchild's
Dictionary of Textiles (1970).
In this case, you question whether the shoulder pads,
chest pieces, sleeve headers, and synthetic suede yokes are
considered "findings and trimmings" as that term is used for
purposes of the policy directive regarding findings and
trimmings which implemented the Special Regime. Although the
shoulder pads, chest pieces, and sleeve headers used are
currently of U.S.-origin, you state that there is a
possibility that these may be sourced from abroad in the
future.
In Headquarters Ruling Letter (HRL) 559522 dated February
14, 1996, we determined that sleeve headers and shoulder pads
were not "findings or trimmings" as they were more analogous
to lining or pocketing which under the Special Regime Program
were required to be U.S. formed and cut. Therefore, in HRL
559522, jackets made with foreign shoulder pads and sleeve
headers were held to be excluded from subheading 9802.00.90,
HTSUS, treatment.
In this case, based upon HRL 559522, it is our opinion
that the shoulder pads and sleeve headers are not "findings
or trimmings." In addition, we find that the chest piece is
also not a "finding." While one of the definitions above
refers to "findings" as including supplementary fabrics,
linings, and pocketing, under the Special Regime Program,
linings and pocketings were specifically excluded from
consideration as findings and were required to be U.S. formed
and cut. Since shoulder pads, sleeve headers, and the chest
pieces appear to be analogous to lining or pocketing, it is
our opinion that the shoulder pads, sleeve headers, and the
chest pieces may not be considered "findings or trimmings."
In regard to the synthetic suede yoke and elbow patches,
these pieces protect the jackets but also ornament them.
While one of the definitions refers to "trimmings" as
"decoration or ornamental parts," and notwithstanding the
example of lace trim under the Special Regime Program as a
"trimming," in HRL 558954 dated June 30, 1995, it was held
that a 100 percent cotton velveteen upper collar woven in
China and cut in the U.S. was not a "trimming" for purposes
of subheading 9802.00.90, HTSUS, even though it was a
"trimming" for tariff classification purposes. In HRL
558954, it was stated that the exception for finding,
trimmings, etc., under the Special Regime Program, 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. It was noted that
examples of findings and trimmings are indicative of the
types of components which may be considered exceptions to the
requirement that all fabric components be formed and cut in
the U.S. and that the velveteen collar would not have been
considered a "finding" or "trimming" under the Special Regime
Program. Accordingly, HRL 558954 held that the cotton
velveteen collar was not a "finding" or a "trimming," and,
therefore, since it was a fabric component not wholly formed
and cut in the U.S., the jacket to which it was assembled was
not eligible for duty-free treatment under subheading
9802.00.90, HTSUS.
In this case, the suede yoke and elbow patches comprise a
relatively large surface area of the jacket and serve more
than just decorative purposes, unlike lace trim.
Accordingly, it is our opinion that the suede yoke and elbow
patches may not be considered "findings or trimmings" for
purposes of subheading 9802.00.90, HTSUS.
II. NAFTA
In regard to your question as to whether the jackets may
be considered NAFTA originating goods if the Japanese suede
yoke and elbow patches are cut in the U.S. or Mexico and sewn
in Mexico and all other components originate in the U.S.
and/or Mexico, General Note 12, HTSUS, incorporates Article
401 of the NAFTA, into the HTSUS. Note 12(b) provides in
pertinent part:
For the purposes of this note, goods imported into the
customs territory of the United States are eligible for
the tariff treatment and quantitative limitations set
forth in the tariff schedule as "goods originating in the
territory of a NAFTA party" only if--
(i) they are goods wholly obtained or produced
entirely in the territory of Canada, Mexico and/or
the United States; or
(ii) they have been transformed in the territory of
Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of
this note, each of the non-originating
materials used in the production of such goods
undergoes a change in tariff classification
described in subdivisions (r),(s) and (t) of
this note or the rules set forth therein, or,
(B) the goods otherwise satisfy the applicable
requirements of subdivisions (r), (s) and (t)
where no change in tariff classification is
required, and the goods satisfy all other
requirements of this note; or
(iii) they are goods produced entirely in the
territory of Canada, Mexico and/or the United States
exclusively from originating materials....
In this case, the jackets will not be wholly obtained or
produced entirely in the territory of Canada, Mexico and/or
the U.S. Therefore, we turn to the rule applicable to goods
of subheading 6203.31.00, HTSUS, where you have stated that
the jackets at issue are classifiable, which is provided for
in General Note 12(t)/62.13. It provides:
[a] change to subheading 6203.31 through 6203.33 from any
other chapter, except from headings 5106 through 5113,
5204 through 5212, 5307 through 5308 or 5310 through
5311, chapter 54, or headings 5508 through 5516, 5801
through 5802 or 6001 through 6002, provided that:
(A) the good is both cut and sewn or otherwise
assembled in the territory of one or more of the
NAFTA parties, and
(B) the visible lining fabric listed in chapter rule
1 for chapter 62 satisfies the tariff change
requirements provided therein.
In applying the above cited rule, Note 12(t)/62, Chapter
rule 3, must also be applied. That rule states:
For purposes of determining the origin of a good of this
chapter, the rule applicable to that good shall only
apply to the component that determines the tariff
classification of the good and such component must
satisfy the tariff change requirements set out in the
rule for that good. If the rule requires that the good
must also satisfy the tariff change requirements for
visible lining fabrics listed in chapter rule 1 for this
chapter, such requirement shall only apply to the visible
lining fabric in the main body of the garment, excluding
sleeves, which covers the largest surface area, and shall
not apply to removable linings.
For purposes of this ruling request, we will assume that
other than the Japanese suede material, all other materials
are NAFTA originating. Although you state that the Japanese
suede material is classifiable under heading 5603 which is a
heading from which a tariff shift is allowed, and you state
that the suede will be both cut in the U.S. or Mexico and
that it will be sewn in Mexico, the suede components may be
disregarded in determining whether the blazer is eligible for
NAFTA preferential tariff treatment. As provided by Chapter
rule 3, General Note 12(t)/62.13 only applies to the
component that determines the tariff classification of the
good. As the suede components do not determine the tariff
classification of the blazer, they may be disregarded.
Accordingly, we find that the jacket will qualify for NAFTA
preferential treatment.
III. Country of Origin Marking
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides that, unless excepted, every article
of foreign origin imported into the U.S. shall be marked in a
conspicuous place as legibly, indelibly, and permanently as
the nature of the article (or container) will permit, in such
a manner as to indicate to the ultimate purchaser in the U.S.
the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of
19 U.S.C. 1304.
In ORR ruling 638-69 (January 2, 1979), Customs held that
suit jackets, overcoats, and sport coats may be marked with a
label affixed over or below the inside pocket if such marking
is included on or is in close proximity to the brand name
label affixed to the coat in that area. Accordingly, such
jackets or coats need not be marked at the nape of the neck.
Based upon the sample submitted, the jackets at issue need
only be marked by placing a label on the inside pocket since
the jackets have an inside pocket and the brand name of the
jacket is also at this location. Therefore, for purposes of
the marking statute, Customs will not require that the
jackets at issue contain a label with their country of origin
at the nape of the neck. On the other hand, it will be
acceptable to only place the country of origin marking at the
nape of the neck alone without the blue and white labels on
the inside pocket of the sample submitted. However, to the
extent that you place a label on the inside pocket with the
reference "Portland, Oregon," we find that the requirements
of 19 CFR 134.46 are triggered.
Section 134.46, Customs Regulations (19 CFR 134.46),
requires the name of the country of origin to appear legibly,
permanently, in close proximity, and in at least comparable
size, preceded by the additional words "Made in," "Product
of," or other words of similar meaning to the name, when any
city or locality in the U.S. or the name of any foreign
country or locality which is not the country of origin
appears on the imported article or its container. The
purpose of this section is to prevent the possibility of
misleading or deceiving the ultimate purchaser.
In HRL 732085 dated January 17, 1989, Customs considered
the country of origin marking placed on a small tag stitched
into a coat's inside side seam. The coat also contained a
manufacturer's label bearing the importer's name and the
words "Fine Furs For Four Generations, New York, Montgomery,"
which was attached to the inner breast pocket, midway between
the side hem of the coat and the seam bearing the country of
origin tag. A hangtag was also attached to the sleeve of
the coat indicating the type of fur, the origin of the fur,
the color of the fur, and the words "Made In Korea." Customs
held that the names of the two domestic cities on the brand
label affixed to the inside pocket triggered 19 CFR 134.46,
and stated that neither the small fabric tag stitched to the
inner seam nor the hangtag attached to the sleeve satisfied
the close proximity requirement.
Based upon HRL 732085, we find that the words "Portland,
Oregon" on the inside pocket label may mislead the ultimate
purchaser. Accordingly, in order to satisfy the requirements
of 19 CFR 134.46, we find that the white label attached to
the inside pocket with the country of origin will be
necessary.
HOLDING:
Based upon the information provided, it is our opinion
that the shoulder pads, sleeve headers, chest pieces, and
synthetic suede yokes and elbow patches are not "findings or
trimmings." Therefore, jackets made with such foreign
components will be excluded from subheading 9802.00.90,
HTSUS, treatment. However, the jackets will be eligible for
NAFTA preferential treatment under the facts presented
pursuant to General Note 12(t)/62.13 and Chapter rule 3, that
is all materials, except the synthetic suede material, are
originating materials. Furthermore, the words "Portland,
Oregon" on the inside pocket label trigger the requirements
of 19 CFR 134.46; therefore, the white label with the country
of origin of the jacket in close proximity to the words
"Portland, Oregon" will be necessary.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are 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
Tariff Classification Appeals
Division