CLA-2 RR:CR:TE 965426 mbg
Ms. Linda Moyer
Customs Manager
Associated Merchandising Corporation
500 Seventh Avenue
New York, NY 10018
RE: CBTPA; girl’s knit top with embroidery; subheading 9820.11.18; headings 6109 and 6111, HTSUSA
Dear Ms. Moyer:
This is in response to your letter of January 15, 2002, requesting a binding ruling on the eligibility of girls’ and toddlers’ knit tops for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”).
FACTS:
You are requesting classification for two knit tops which claim are identical except for size and you submitted one sample for our examination. Style number 65549 is a sleeveless girl’s knit top constructed of 100 percent cotton fabric. Style number 65548 is a sleeveless toddler’s knit top constructed of 100 percent cotton fabric. The tank tops have embroidery work in the form of a zigzag design on the capping of the neckline and armhole openings. A woven decorative patch in the form of an American flag made up of two fabric pieces is sewn to the chest area.
You have provided that the tank tops are manufactured in Honduras from fabric wholly formed in the United States from yarns wholly formed in the United States. You have further stated that the fabric is cut in Honduras and sewing thread formed in the United States is used in assembling the garment. You have inquired about using foreign embroidery thread for the zigzag stitching as well as using US formed thread for the zigzag stitching. The woven decorative patch is constructed of fabric from China which is printed in Malaysia and then sewn to the knit top in Honduras with US thread. The girl’s knit top is classified in subheading 6109.10.0065, HTSUSA. The toddler girl’s knit top is classified in subheading 6111.20.2000, HTSUSA.
Garments meeting the description contained in subheading 9820.11.18, HTSUSA, are eligible for preferential tariff treatment as provided for in Subchapter XX, U.S. Note 2(a) HTSUSA, which provides:
Except as provided in this note, textile and apparel articles described in subheading 9820.11.03 through 9820.11.30, inclusive, of this subchapter that are imported directly into the custom territory of the United States from a designated beneficiary CBTPA country enumerated in general note 17(a) to the tariff schedule shall be eligible to enter free of duty and free of any quantitative limitations, except as provided in this subchapter, under the terms of the provisions set forth in such subheadings and applicable legal notes, as indicated by the rate of duty of “Free” in the Special rates of duty subcolumn for such provisions.
ISSUE:
Whether the subject knit tops with embroidery and woven patch decoration are eligible for preferential tariff treatment under the CBTPA?
LAW AND ANALYSIS:
Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213 (b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.
Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.
Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.
The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country (1) that is designated as a CBTPA beneficiary country and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles. Honduras is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351, dated October 2, 2000, 65 Fed. Reg. 59329) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).
I. Applicable Apparel Provisions under the CBTPA
Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000.
The subject toddler girl’s knit top is eo nomine classified in subheading 6111.20.2000, HTSUSA, which provides for “Babies’ garments and clothing accessories, knitted or crocheted: Of cotton: T-shirts, singlets and similar garments, except those imported as parts of sets.” The subject girl’s knit top is eo nomine classified in subheading 6109.10.0065, HTSUSA, which provides for “T-shirts, singlets, tank tops and similar garments, knitted or crocheted: Of cotton: Women’s or girls’: Tank tops; Girls’.”
Subheading 9820.11.18, HTSUSA, provides for the duty-free entry of:
Articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule: Knitted or crocheted apparel articles (except T-shirts, other than underwear, classifiable in subheadings 6109.10.00 and 6109.90.10 and described in subheadings 9820.11.12) cut and assembled in one or more such countries from fabrics wholly formed in the United States from yarns wholly formed in the United States (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 of the tariff schedule and are formed wholly in the United States), if such assembly is with thread formed in the United States.
Therefore, in regard to the facts of this case, the subject knit tops are said to be cut and assembled in Honduras from fabrics produced in the United States with sewing thread produced in the United States.
II. Findings and Trimmings Provisions under the CBTPA
Subchapter XX, U.S. Note 3(a), HTSUSA, provides:
An article otherwise eligible for preferential treatment under any provision of this subchapter shall not be ineligible for such treatment because the article contains—
(i) findings and 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[.]
The Interim Regulations, regarding findings and trimmings further provide:
An article otherwise described under paragraph (a) of this section will not be ineligible for the preferential treatment referred to in [19 C.F.R.] § 10.221 because the article contains:
(A) Findings and trimmings of foreign origin, if the value of those findings and trimmings does not exceed 25 percent of the cost of the components of the assembled article. For the purposes of this section “findings and trimmings” include, but are not limited to, hooks and eyes, snaps, buttons, “bow buds”, decorative lace trim, elastic strips (but only if they are each less than 1 inch in width and are used in the production of brassieres), zippers (including zipper tapes), labels, and sewing thread except in the case of an article described in paragraph (a)(3) or (a)(12) of this section.
See 19 C.F.R. §10.223(b)(1)(i)(A).
Of particular importance in the subject case, the Interim Regulations also provide:
If any fibers or yarns not wholly formed in the United States or one or more beneficiary countries are used in an article as a finding or trimming described in paragraph (b)(1)(i)(A) of this section, the fibers or
yarns will be considered to be a finding or trimming for purposes of paragraph (b)(1)(i) of this section.
See 19 C.F.R. § 10.223(b)(ii).
“Findings” are generally accepted to be sewing essentials used in textile goods while “trimmings” are decorative or ornamental parts. See, for example, Headquarters Ruling Letter (“HQ”) 559552, dated February 14, 1996; HQ 560398, dated July 29, 1997; HQ 560458, dated March 6, 1998; HQ 559780, dated May 19, 1997 and HQ 560520, dated September 22, 1997, for examples of what qualifies as a finding or trimming. See also, HQ 558954, dated June 30, 1995; HQ 559522, dated February 14, 1996; HQ 559738, dated July 2, 1996; HQ 559794, dated June 3, 1996; and HQ 559738, dated July 2, 1996, for examples of what does not qualify as a finding or trimming.
Therefore, in regard to the facts of this case, the subject knit tops with embroidery classified in subheadings 6109.10.0065 and 6111.20.2000, HTSUSA, are said to be cut and assembled in Honduras from fabric produced in the U.S. with sewing thread produced in the US. The zigzag stitching is also considered to be a trim and, as stated in your submission, is done using US thread. However, Customs notes that the zigzag embroidery stitching can be done using either US thread or foreign thread under the provisions of the CBTPA.
The woven fabric patch on the subject knit tank tops is made of Chinese fabric but is also considered to be a trimming. Customs has previously classified woven fabrics used as decorative patches as trimmings in Headquarters Ruling Letter (“HQ”) 560726, dated December 12, 1997 and HQ 560520, dated September 22, 1997. As with the subject merchandise, in both of these HQ decisions the patch was considered to add ornamentation to the garments yet not to exceed the 25 percent limitation for findings and trimmings.
The imported article will be eligible for preferential treatment under subheading 9820.11.18, HTSUSA, provided the value of the foreign woven patch and, if applicable any foreign embroidery thread, does not exceed 25 percent of the cost of the components of the assembled tank tops and the articles are assembled in Honduras from fabric wholly formed in the US from yarns wholly formed in the US.
HOLDING:
Provided the cost of the foreign findings and trimmings is less than 25 percent of the cost of the components of the assembled knit tops and if constructed of fabrics wholly formed in the US from yarns wholly formed in the US, the subject girls’ infant and toddlers knit tank tops, Styles 65548 and 65549, as described above, are eligible for duty free/quota free treatment under subheading 9820.11.18, HTSUSA, provided they are imported directly into the customs territory of the U.S. from a CBTPA beneficiary country.
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