CLA-2 RR:CR:SM 560914 KSG
Port Director
U.S. Customs Service
San Juan, Puerto Rico
ATTN: CST- 455
RE: Internal Advice 32/97; Sutures; U.S. Note 2(b),
subchapter II, Chapter 98;
Dear Port Director:
This is in reference to your Request for Internal
Advice (I.A. 32/97) dated March 23, 1998, asking if non-sterile surgical sutures with needles are eligible for a
duty preference under U.S. Note 2(b), subchapter II, Chapter
98, of the Harmonized Tariff Schedule of the United States
("HTSUS").
FACTS:
According to information you have provided, surgical
sutures with needles (non-sterile) are being imported into
the Port of San Juan by Davis & Gech, Inc. and by U.S.
Surgical Corporation. In your fax of October 5, 1998, you
indicate that both the silk and man-made yarns from which
the sutures are made may be of U.S. or foreign origin. You
also state that the needles may be of U.S. or foreign
origin. The different type of yarns used include: catgut;
man-made absorbable gut; nylon dacron and silk. You state
that the yarns are cut to length and dressed in Puerto Rico.
You also state that the yarns are sent to the Dominican
Republic for assembly with the needles (by threading) and
retail packaging. The assembled sutures and needles are
returned non-sterilized.
Your office takes the position that the sutures are
textile articles and therefore, not eligible for duty-free
treatment under U.S. Note 2(b), subchapter II, Chapter 98,
HTSUS.
ISSUE:
Whether the assembled sutures and needles are eligible
for duty-free treatment under U.S. Note 2(b), subchapter II,
Chapter 98, HTSUS.
LAW AND ANALYSIS:
Section 222 of the Customs and Trade Act of 1990
(Public Law 101-382) amended U.S. Note 2, subchapter II,
Chapter 98, HTSUS ("U.S. Note 2(b)"), to provide for the
duty-free treatment of articles (other than textile and
apparel articles, and petroleum and petroleum products)
which are assembled or processed in a Caribbean Basin
Economic Recovery Act beneficiary country wholly of
fabricated components or ingredients (except water) of U.S.
origin.
U.S. Note 2(b), provides as follows:
(b) No article (except a textile article, apparel
article, or petroleum, or any product derived from
petroleum, provided for in heading 2709 or 2710)
may be treated as a foreign article, or as subject
to duty, if--
(i) the article is--
(A) assembled or processed in whole of fabricated
components that are a product of the United States,
or
(B) processed in whole of ingredients (other than
water) that are a product of the United States, in
a beneficiary country; and
(ii) neither the fabricated components, materials or
ingredients, after exportation from the United
States, nor the article itself,
before importation into the
United States, enters the
commerce of any foreign country
other than a beneficiary
country.
As used in the note, the term "beneficiary country"
means a country listed in General Note 7(a), HTSUS. The
Dominican Republic is listed in General Note 7(a), HTSUS, as
a designated beneficiary country ("B.C.").
You indicate that both the yarn and the needles may be
of U.S. or foreign origin. As clearly set forth in the
language of U.S. Note 2(b), a good is entitled to duty-free
treatment only if all the components or ingredients are of
U.S. origin. We note that under the textile rules of origin
set forth in section 102.21, Customs Regulations (19 CFR
102.21), if the sutures are produced in the U.S. from
foreign -origin yarn sourced from one country, the origin of
the sutures would be the country of origin of the yarn. In
such circumstances, the sutures would not be of U.S. origin
and therefore, would be ineligible for U.S. Note 2(b)
treatment.
The issue presented is whether the sutures which are of
U.S. origin are considered textiles articles which are
expressly precluded from receiving duty-free treatment under
U.S. Note 2(b). Customs stated in Treasury Decision
("T.D.") 91-88, dated October 18, 1991, that
It is Customs position that the controlling factor
in determining whether articles constitutes
"textile" and "apparel" articles for purposes of
Note 2(b) is whether such articles (other than
footwear and parts of footwear) are subject to
textile agreements.
If an article is subject to a textile agreement, it is
indicated in the HTSUS by the inclusion of a textile
category number in the applicable tariff provision.
The non-sterile sutures made from man-made yarn are
classified at subheading 5609.00.30.00, HTSUS, which
provides for articles of yarn, strip or the like of heading
5404 or 5405, twine, cordage, rope or cables, not elsewhere
specified or included: of man-made fibers. The non-sterile
sutures made from silk yarn are classified at subheading
5609.00.40.00, HTSUS, which provides for articles of yarn,
strip or the like of heading 5404 or 5405, twine, cordage,
rope or cables, not elsewhere specified or included: other.
Neither of these tariff provisions includes a textile
category number. Therefore, the non-sterile sutures are not
subject to textile agreements and are not excluded from
duty-free treatment under U.S. Note 2(b) as textile
articles.
HOLDING:
The imported sutures with needles are eligible for
duty-free treatment under U.S. Note 2(b), subchapter II,
Chapter 98, HTSUS, provided all the components and materials
thereof are of U.S. origin and the materials were exported
directly from the U.S. to the B.C. and the assembled goods
were imported directly to the U.S. from the B.C. The
documentation requirements set forth in telex 9264071 (copy
enclosed) also must be met.
This decision should be mailed by your office to the
internal advice requester no later than 60 days from the
date of this letter. On that date the Office of Regulations
and Rulings will take steps to make the decision available
to Customs personnel via the Customs Rulings Module in ACS
and the public via the Diskette Subscription Service,
Freedom of Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division