CLA-2 RR:CR:TE 966696 TMF
Bruce Schiller, Vice President
Customs Brokerage & Compliance
Excel Global Logistics, Inc.
10205 NW 19th Street
Suite 101
Miami, Florida 33172
RE: hook and loop fastener tape as a finding used in carpenter jeans under the Caribbean Basin Trade Partnership Act (CBTPA)
Dear Mr. Schiller:
This is in response to your letter dated July 30, 2003, on behalf of your client, Reed Manufacturing Company, in which you requested a binding ruling on the status of certain woven nylon hook and loop fastener tape that will be used in men’s denim carpenter jeans under the Caribbean Basin Trade Partnership Act (CBTPA). Your request along with one sample was sent to our office.
FACTS:
The subject garment is a pair of men’s woven denim carpenter jeans constructed from 100 percent cotton indigo denim. The pants have a waistband which fastens with one button, seven belt loops, a zippered front fly, two front pockets, a front watch pocket, two back patch pockets and two side patch pockets, one of which fastens shut by use of hook and loop fastener tape.
The pants will be produced in adult sizes. The garment will be made using denim fabric woven and finished in the United States, using yarns of U.S. origin. The finished denim will be exported from the U.S. to the Dominican Republic, where the fabric will be cut-to-pattern and assembled (by sewing) to form the pant. The pant will then be washed and finished in the Dominican Republic and imported directly to the U.S.
The thread and all of the trim materials, except for the hook and loop closure on the pocket, will be of U.S. origin. You stated that the hook and loop fastener tape will be sourced from China, Korea or Taiwan.
ISSUE: Whether the subject woven hook and loop fastener tape that is to be used in the subject men’s denim carpenter jeans is considered a “finding” under the CBTPA.
Whether the subject denim carpenter jeans are eligible for CBTPA benefits.
LAW AND ANALYSIS:
The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty-free and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA. The Dominican Republic was designated a beneficiary country by Presidential Proclamation 7351 of October 2, 2000, published in the Federal Register (65 Fed. Reg. 59329). It was determined to have met the second criteria concerning customs procedures by the USTR and thus eligible for benefits under the CBTPA effective October 2, 2000.
The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§10.221 through 10.228 of the Customs Regulations (19 CFR 10.221 through 10.228).
You requested that CBP determine that the subject hook and loop fastener tape, as used in the sample jeans before us, qualifies as a “finding” under the CBTPA. Subheading 9820.11.06, HTSUSA, provides, in pertinent part, for:
Apparel articles sewn or otherwise assembled in one or more such countries with thread formed in the United States from fabrics wholly formed in the United States and cut in one or more such countries from yarns wholly formed in the United States, or from components knit-to-shape in the United States from yarns wholly formed in the United States, or both…under the terms of U.S. note 2(a) to this subchapter.
You state that the subject denim carpenter jeans will be assembled in the Dominican Republic from denim fabric that is woven and finished in the U.S. from U.S. yarns. You do not indicate whether the yarns are wholly formed in the U.S. The term “wholly-formed” when used with reference to yarns, means:
[A]ll of the production processes, starting with the extrusion of filament strip, film, or sheet and including slitting a film or sheet into strip, or the spinning of all fibers into yarn or both and ending with a yarn or plied yarn, took place in a single country… See 19 C.F.R. 10.222.
For purposes of this case, we assume that the yarns are wholly formed in the U.S. Based upon the provided description of the yarns and fabrics, the subject garment may be eligible for CBTPA benefits.
Finding and Trimming
Note 3, Subchapter XX, Chapter 98, provides, in relevant part, that:
[a]n 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 or 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;
* * *
(b) For purposes of subdivision (a)(i) above, findings and trimmings eligible under such subdivision include sewing thread, hooks and eyes, snaps, buttons, "bow buds", decorative lace trim, elastic strips, zippers (including zipper tapes) and labels and other similar products. Elastic strips are considered findings or trimmings only if they are each less than 2.54 cm in width and used in the production of brassieres. For purposes of articles described in subheading 9820.11.06, 9820.11.18 and 9820.11.33, sewing thread shall not be considered to be findings or trimmings.
While "findings and trimmings" for purposes of CBTPA was not specifically defined, the examples set forth above, such as zippers, buttons, decorative lace trim and labels are indicative of the types of components which are considered to be within the purview of this provision. The exception for findings and trimmings 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. and CBTPA beneficiary countries. "Findings" are generally accepted to be sewing essentials used in textile goods while "trimmings" have been defined as "decoration or ornamental parts." See M. Picken, The Fashion Dictionary (1973).
With regard to what items constitute "findings" or "trimmings," CBP has previously held under subheading 9802.00.90, HTSUSA, that fabric items such as shoulder pads, sleeve headers, and velveteen collars are not "findings and trimmings." See Headquarters Ruling Letter (HQ) 559552, dated February 14, 1996, and HQ 558954, dated June 30, 1995. In HQ 559738, dated July 2, 1996, CBP held that a synthetic suede yoke and elbow patches are not "findings and trimmings" because they comprise a large surface area of the garment and serve more than decorative purposes. However, embroidered patch labels which indicate or symbolize the brand name and provide ornamentation have been held to be "findings and trimmings" for purposes of subheading 9802.00.90, HTSUSA (formerly known as the “Special Regime Program”) and the Special Access Program. See HQ 560520, dated September 22, 1997, and HQ 560726, dated December 12, 1997. Moreover, in HQ 956426, dated April 23, 2002, CBP held that a woven decorative patch sewn to the chest area of a sleeveless knit is a "trimming" for purposes of the CBTPA.
Upon examination of the sample hook and loop fastener tape, it is our opinion that by fastening the top portion of the side pocket of the subject carpenter jeans, it is a “finding” because it is used in the same manner as buttons or zippers, which are examples of findings because they fasten garments together. Further, the subject tape is displayed and marketed in sewing notion departments of retailers as findings.
Accordingly, we find that the subject woven nylon hook and loop fastener tape, used in the manner previously described, is a “finding” for purposes of the CBTPA.
HOLDING:
The foreign origin hook and loop fastener tape, as used in the subject carpenter jeans is considered a "finding" for purposes of the CBTPA. The use of the foreign origin hook and loop fastener tape in the garment will not render the jeans ineligible for preferential treatment under the CBTPA provided the jeans otherwise meet the requirements for classification within a CBTPA provision and the value of the hook and loop fastener tape and all other foreign findings and trimmings, if any, used in the jeans combined does not exceed 25 percent of the total cost of the components of the garment.
The subject men’s denim carpenter jeans are eligible for CBTPA benefits under subheading 9820.11.06, HTSUSA.
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,
Myles B. Harmon, Director
Commercial Rulings Division