CLA-2 RR:C:SM 559869 DEC
Ms. Karen Soukiasian
David Dobbs Enterprises, Incorporated
4600 U.S. 1 North
St. Augustine, Florida 32095
RE: Country of origin; 19 CFR 102.21; HRL 959203; baseball cap;
golf cap;
tennis visor; marking; 12.130(c); HRL 558708; 19 U.S.C.
1304; HRL 559760; HRL 559627; HRL 959035; 19 CFR 134.35(b)
Dear Ms. Soukiasian:
This is in response to your letter dated March 13, 1996,
requesting a ruling with respect to the country of origin and
marking requirements of baseball/golf caps and tennis visors. In
addition, you have asked for a ruling with respect to the
eligibility of the baseball/golf caps and tennis visors for a
partial duty exemption under subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS), or duty free entry
pursuant to subheading 9802.00.90, HTSUS. You submitted
additional information in letters dated October 2, 1996, and
January 28, 1997.
FACTS:
You state that your company is contemplating the manufacture
of baseball/golf caps and tennis visors. The production of the
baseball/golf caps involves the production of the visor portion
of the caps and the crown portion. The tennis visors do not
include a crown. Each of the various production scenarios are
discussed below. In your submission of January 28, 1997, you
provided tables indicating the origin of the materials and the
country in which the various operations are to be performed.
Scenario 1: BASEBALL CAPS/GOLF CAPS (5 panel)
Processes to be Performed in the U.S.
Material for the crown and visor in scenario 1 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the crown will be silkscreened
or embroidered in the U.S.
Processes to be performed in Mexico
1. Fuse buckram at 350 degrees for 90 seconds
2. Seam backs
3. Tape back
4. Bind back
5. Set panel (fronts, backs, sides sewn together)
6. Tape cover, tape inside crown
7. For golf caps, mesh stays
8. Set visor* to crown
9. Attach snap tab (sew)
10. Attach, braid, buckles, leather strap (golf cap)
11. Punch eyelets (baseball cap)
12. Assemble button
13. Attach button
14. Block (steam)
15. Pack
*processes performed in Mexico to produce the
visor:
A. Sew down
B. Stuff visor (put in board)
C. Stitch visor
D. Pink visor
Scenario 2: BASEBALL CAPS/GOLF CAPS (5 panel)
Material for the crown and visor in scenario 2 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the crown will be silkscreened
or embroidered in the U.S. Under scenario 2, the
production steps 1-15 listed above will be performed in
the U.S. The production processes with respect to the
visor listed as A-D will be performed in Mexico.
Scenario 3: BASEBALL CAPS/GOLF CAPS (5 panel)
Material for the crown and visor in scenario 3 will be
Mexican origin and the material will be cut to shape in
Mexico. In addition, the crown will be silkscreened or
embroidered in Mexico. Under scenario 3, the
production steps 1-15 listed above will be performed in
the U.S. The production processes with respect to the
visor listed as A-D will be performed in Mexico.
Scenario 4: BASEBALL CAPS/GOLF CAPS (5 panel)
Material for the crown in scenario 4 will be Mexican
origin and the material will be cut to shape in Mexico.
In addition, the crown will be silkscreened or
embroidered in Mexico. Material for the visor portion
will be U.S.-origin and the material will be cut to
shape in the U.S. Under scenario 4, the production
steps 1-15 listed above will be performed in Mexico.
The production processes with respect to the visor
listed as A-D will be performed in the U.S.
Scenario 1: BASEBALL CAPS/GOLF CAPS (6 panel)
Processes to be Performed in the U.S.
Material for the crown and visor in scenario 1 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the crown will be silkscreened
or embroidered in the U.S.
Processes to be performed in Mexico
1. Fuse buckram at 350 degrees for 90 seconds
2. Seam backs
3. Tape back
4. Bind back
5. Seam front
6. Punch 2 eyelets (front)
7. Attach braid, buckle, leather strap (golf cap)
8. Punch eyelets
9. Seam buster
10. Tape front
11. Set panels
12. Tape cover, tape inside crown
13. For golf caps, mesh stays
14. Set visor* to crown
15. Attach snap tab (sew)
16. Assemble button
17. Attach button
18. Block (steam)
19. Pack
*processes performed in Mexico to produce the
visor:
A. Sew down
B. Stuff visor (put in board)
C. Stitch visor
D. Pink visor
E. Sew down
F. Stuff visor (put in board)
G. Stitch visor
H. Pink visor
Scenario 2: BASEBALL CAPS/GOLF CAPS (6 panel)
Material for the crown and visor in scenario 2 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the crown will be silkscreened
or embroidered in the U.S. Under scenario 2, the
production steps 1-19 listed above will be performed in
the U.S. The production processes with respect to the
visor listed as A-H will be performed in Mexico.
Scenario 3: BASEBALL CAPS/GOLF CAPS (6 panel)
Material for the crown and visor in scenario 3 will be
Mexican origin and the material will be cut to shape in
Mexico. In addition, the crown will be silkscreened or
embroidered in Mexico. Under scenario 3, the
production steps 1-19 listed above will be performed in
the U.S. The production processes with respect to the
visor listed as A-H will be performed in Mexico.
Scenario 4: BASEBALL CAPS/GOLF CAPS (6 panel)
Material for the crown in scenario 4 will be Mexican
origin and the material will be cut to shape in Mexico.
In addition, the crown will be silkscreened or
embroidered in Mexico. Material for the visor portion
will be U.S.-origin and the material will be cut to
shape in the U.S. Under scenario 4, the
production steps 1-19 listed above will be performed in
Mexico. The production processes with respect to the
visor listed as A-H will be performed in the U.S.
Scenario 1: TENNIS VISORS
Processes to be Performed in the U.S.
Material for the tennis visor in scenario 1 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the visor will be silkscreened
or embroidered in the U.S.
Processes to be performed in Mexico
1. Fuse buckram
2. Sew down
3. Close visor
4. Pink visor
5. Attach visor to twill and terry sweatband
6. Bind tops
7. Insert plastic
8. Bind ends, same as bind tops
9. Bar tack ends
10. Block (steam)
11. Pack
Scenario 2: TENNIS VISORS
Material for the tennis visors in scenario 2 will be
U.S. origin and the material will be cut to shape in
the U.S. In addition, the tennis visor will be
silkscreened or embroidered in the U.S. Under scenario
2, the production steps 1-9 listed above will be
performed in Mexico. The completed tennis visors will
be returned to the U.S. where they will be block-steamed and packed (step 10-11).
Scenario 3: TENNIS VISORS
Material for the tennis visors in scenario 3 will be
Mexican origin and the material will be cut to shape in
Mexico. In addition, the tennis visor will be
silkscreened or embroidered in Mexico. Under scenario
3, the production steps 1-11 listed above will be
performed in the U.S.
You request that we address the origin, country of origin
marking, and Chapter 98, HTSUS, issues for each of the four
production scenarios for the 5 and 6-panel baseball/golf caps as
well as for the three production scenarios for the tennis visors.
ISSUES:
1. What is the country of origin of the baseball/golf caps
and tennis visors subjected to the production scenarios described
above?
2. What are the country of origin marking requirements
applicable to the baseball/golf caps and tennis visors?
3. Does the processing described above with respect to the
production of baseball/golf caps and tennis visors qualify these
articles for a partial or complete duty exemption pursuant to
subheading 9802.00.80 or 9802.00.90, HTSUS?
LAW AND ANALYSIS:
Baseball/Golf Caps - Country of Origin and Marking
On December 8, 1994, the President signed into law the
Uruguay Round Agreements Act. Section 334 of that Act provides
new rules of origin for textiles and apparel entered, or
withdrawn from warehouse, for consumption, on and after July 1,
1996. On September 5, 1995, Customs published Section 102.21,
Customs Regulations (codified at 19 CFR 102.21), in the Federal
Register, implementing Section 334 (60 FR 46188).
Thus, effective July 1, 1996, the country of origin of a
textile or apparel product shall be determined by sequential
application of the general rules set forth in paragraphs (c)(1)
through (5) of Section 102.21.
Paragraph (c)(1) states that "The country of origin of a
textile or apparel product is the single country, territory, or
insular possession in which the good was wholly obtained or
produced." As the subject merchandise is not wholly obtained or
produced in a single country, territory or insular possession,
paragraph (c)(1) of Section 102.21 is inapplicable.
Paragraph (c)(2) states that "Where the country of origin of
a textile or apparel product cannot be determined under paragraph
(c)(1) of this section, the country of origin of the good is the
single country, territory, or insular possession in which each
foreign material incorporated in that good underwent an
applicable change in tariff classification, and/or met any other
requirement, specified for the good in paragraph (e) of this
section."
While the procedures vary slightly between the production
scenarios for the five and six-panel baseball/golf cap designs
(see above), they will be discussed together since the different
processes will not result in a different origin, marking, or duty
conclusion.
For Scenario 1, the crown and visor portion of the baseball
caps/golf caps will be cut to shape from U.S. origin material
and the crown will be silkscreened or embroidered in the U.S.
The assembly operations of the crown and visor as well as the
assembly operations of the completed caps are performed in
Mexico.
The completed baseball/golf caps are classifiable in
subheading 6505.90, HTSUS. As such, section 102.21 is applicable
for determining their origin. Paragraph (e) of section 102.21
states that "The following rules shall apply for purposes of
determining the country of origin of a textile or apparel product
under paragraph (c)(2) of this section":
6505.90 (1) If the good consists of two or more
components, a change to
subheading 6505.90 from any other heading,
provided that
the change is the result of the good being
wholly assembled
in a single country, territory, or insular
possession....
The baseball/golf caps described in Scenario 1 are
completely assembled in Mexico. Since the fabric for the visor
and the embroidered fabric for the crown are not classified under
subheading 6505.90 and since the caps are wholly assembled in
Mexico, section 102.21(c)(2) is applicable to this scenario and
the country of origin is Mexico. See Headquarters Ruling Letter
(HRL) 959035, dated April 5, 1996.
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 United States shall be marked in a
conspicuous place as legibly, indelibly, and permanently as the
nature of the article (or its container) will permit, in such a
manner as to indicate to the
ultimate purchaser in the United States the name of the country
of origin of the article. Part 134 of the Customs Regulations
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304. Since the country of origin has
been determined to be Mexico, the baseball/golf caps produced
pursuant to scenario 1 must be marked with Mexico as the country
of origin.
Under scenario 2, the visor portion of the baseball/golf
caps are made from fabric that is U.S. origin and cut to shape in
the U.S. The visor portion of the caps is assembled in Mexico
and then shipped to the U.S. where it will be assembled to the
crown to create the final cap. The visor portion of the caps
when imported into the U.S. from Mexico will be classified under
heading 6507, HTSUS. Classified as such, the visor portions are
not considered to be a textile or apparel product covered by
section 102.21. Therefore, pursuant to the North American Free
Trade Agreement (NAFTA) Marking Rules (19 CFR part 102), the
following tariff shift rule set forth in section 102.20 is
applicable to goods classified under heading 6507:
6507 A change to heading 6507 from any other heading.
Since the fabric will be classified under a different
heading when imported into Mexico, the origin of the visor
portion when it is returned to the U.S. will be Mexico. After
the visor portion of the caps are imported into the U.S., they
are incorporated into a finished baseball/golf cap. As stated
previously, the completed baseball/golf caps are classifiable in
subheading 6505.90, HTSUS, and the country of origin
determination therefore is governed by section 102.21 as is the
country of origin marking for purposes of 19 U.S.C. 1304. See
Headquarter Ruling Letter (HRL) 559760, dated July 19, 1996 and
HRL 559627, dated June 27, 1996. Paragraph (e) of section 102.21
states that "The following rules shall apply for purposes of
determining the country of origin of a textile or apparel product
under paragraph (c)(2) of this section":
6505.90 (1) If the good consists of two or more
components, a change to
subheading 6505.90 from any other heading,
provided that
the change is the result of the good being
wholly assembled
in a single country, territory, or insular
possession....
Under this scenario, the imported visor portion of the caps fail
to meet the second requirement of the tariff shift rule because
the finished baseball/golf caps are not wholly assembled in
single country. The visors are assembled in Mexico while the
crown is assembled in the U.S.
Since the baseball/golf caps described in scenario 2 are not
wholly assembled in a single country, territory or insular
possession, 19 CFR 102.21(c)(2) is inapplicable to those
scenarios.
Paragraph (c)(3) states the following:
Where the country of origin of a textile or
apparel product cannot be determined under
paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the
country of origin of the good is
the single country, territory, or
insular possession in which the
good was knit; or
(ii) Except for goods of heading 5609,
5807, 5811, 6213, 6214, 6301
through 6306, and 6308, and
subheadings 6209.20.5040, 6307.10,
6307.90, and 9404.90, if the good
was not knit to shape and the good
was wholly assembled in a single
country, territory, or insular
possession, the country of origin
of the good is the country,
territory, or insular possession in
which the good was wholly
assembled.
As the subject merchandise in scenario 2 is neither knit to
shape nor wholly assembled in one country, paragraph (c)(3) is
not applicable. Section 102.21(c)(4) states, "Where the country
of origin of a textile or apparel product cannot be determined
under paragraph (c)(1), (2) or (3) of this section, the country
of origin of the good is the single country, territory or insular
possession in which the most important assembly or manufacturing
process occurred."
In the opinion of this office, the most important assembly
or manufacturing process is where the crown of the baseball/golf
caps will be sewn together. Therefore, the country of origin of
the baseball/golf caps in scenario 2 will be the U.S. Since the
importer will process the visor portion of the caps in a manner
that results in the good becoming a product of the U.S. under
section 102.21 and since 102.21 serves the same purposes as the
NAFTA Marking Rules (see 19 CFR 102.0), we find that pursuant to
19 CFR 134.35(b), neither the imported visor portion of the caps
nor its container must be marked to indicate that the visor is a
product of Mexico when imported into the U.S.
If a phrase such as "Made in the U.S.A." is proposed to be
marked on the finished articles, we advise you to contact the
Federal Trade Commission (FTC), Division of Enforcement, 6th &
Pennsylvania Avenue, NW, Washington D.C. 20508, before attempting
to mark the finished products in that fashion, since use of the
phrase "Made in U.S.A." is under the FTC's jurisdiction. The
Customs Service does not have the authority to approve such a
marking.
For scenario 3, Mexican-origin material for the crown is cut
to shape and embroidered in Mexico. The visor portion of the
caps under this scenario is wholly produced in Mexico.
Therefore, these articles when imported into the U.S. are of
Mexican origin pursuant to section 102.21(c)(1). However,
neither these articles nor their containers are required to be
marked to indicate that the articles are products of Mexico (see
19 CFR 134.35(b)) since, for the same reasons discussed under
scenario 2, both the imported fabric and the visors will be
processed by the importer so that they will become articles of
the U.S. pursuant to the rules set forth in section 102.21(c)(4).
Under scenario 4, the visor portion of the cap will be
wholly assembled in the U.S. and then exported to Mexico where it
will be attached to the Mexican-origin crown to create the
finished cap. Based on the application of the 19 CFR Part 102.21
rules as discussed previously and pursuant to 19 CFR
102.21(c)(4), the U.S.-made visor will become a product of Mexico
when it is incorporated into the finished baseball cap. Upon
importation into the U.S., the caps will be required to be marked
as a product of Mexico.
Tennis Visors - Country of Origin and Marking
Under production scenarios 1 and 2 for the tennis visors,
material of U.S. origin is cut to shape and embroidered in the
U.S. prior to being sent to Mexico where the tennis visors will
be wholly assembled. In scenario 2, the tennis visors are
steamed and packed in the U.S. whereas in scenario 1, these
processes, which have no bearing on the origin of the finished
tennis visors, are performed in Mexico. The origin of the
imported tennis visors, which are also classified under
subheading 6505.90, HTSUS, will be determined pursuant to the
rules set forth in 19 CFR 102.21(c).
Since the tennis visors are not wholly obtained or produced
in a single country, section 102.21(c)(1) is inapplicable.
Section 102.21(c)(2) instructs us to apply the applicable tariff
shift rule to the production scenarios at issue. As stated
previously, the completed tennis visors are classifiable in
subheading 6505.90, HTSUS. The applicable tariff shift rule
states the following:
6505.90 (1) If the good consists of two or more
components, a change to
subheading 6505.90 from any other heading,
provided that
the change is the result of the good being
wholly assembled
in a single country, territory, or insular
possession....
The tennis visors described in scenarios 1 and 2 are wholly
assembled in Mexico. Since the embroidered fabric for the tennis
visors is not classified under subheading 6505.90, HTSUS, and
since the tennis visors are wholly assembled in Mexico, section
102.21(c)(2) is applicable to scenarios 1 and 2 and the country
of origin is Mexico. See HRL 959035, dated April 5, 1996. When
the tennis visors are imported into the U.S., they are required
to be marked as a product of Mexico.
Under production scenario 3 for the tennis visors, material
of Mexican origin is cut to shape and embroidered in Mexico prior
to being sent to the U.S. for assembly. To determine the country
of origin of the finished tennis visors, we must apply the 19 CFR
102.21(c) rules.
The completed tennis visors are classifiable in subheading
6505.90, HTSUS. Since the imported embroidered fabric for the
tennis visors is not classified under subheading 6505.90, HTSUS,
and since the tennis visors are wholly assembled in the U.S.,
section 102.21(c)(2) is applicable to this scenario and the
country of origin is the U.S. See Headquarters Ruling Letter
(HRL) 959035, dated April 5, 1996. Since the country of origin
has been determined to be the U.S., the tennis visors produced
pursuant to scenario 3 are not subject to the country of origin
marking requirements. Pursuant to 19 CFR 134.35(b), neither the
imported fabric nor its containers must be marked if the
processing of the visors in the U.S. is performed by the importer
or on its behalf.
You did not include processing information with respect to a
fourth variation of the production of tennis visors.
Subheading 9802.00.80 & 9802.00.90, HTSUS
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, 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.
"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.
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. As distinguished from subheading 9802.00.80, HTSUS,
however, 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, in whole or in part, must satisfy the three
conditions set forth in (a) - (c) of the statute. HRL 558708,
dated June 14, 1995.
Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides that assembly operations for purposes of subheading
9802.00.80 may encompass any method used to join together solid
components such as sewing, welding, soldering, riveting, force
fitting, gluing, or the use of fasteners and may be accompanied
by operations that are incidental to the assembly as provided in
section 10.16(b).
In scenario 1 for both the baseball/golf caps as well as for
the tennis visors, all of the fabric components are U.S. origin
and the components are cut to shape in the U.S. The operations
of fusing the buckram and the various sewing operations used to
produce the baseball/golf caps and the tennis visors in Mexico as
described in scenario 1 are acceptable assembly operations.
Accordingly, the baseball/golf caps and the tennis visors that
are produced in the manner described in scenario 1 may enter
duty-free pursuant to subheading 9802.00.90, HTSUS.
The visor portion of the baseball/golf caps as described in
scenario 2 will not qualify for duty-free entry under subheading
9802.00.90, HTSUS, when imported into the U.S. Upon importation
into the U.S., the visor portion of the baseball/golf caps will
be classified under heading 6507, HTSUS, and therefore will not
be considered a "textile and apparel good" eligible for duty-free
treatment under subheading 9802.00.90, HTSUS. See Appendix 1.1
of Annex 300-B of the NAFTA. However, since the operations
performed in Mexico (sewing, stuffing, and stitching) are
assembly operations, the imported visor portion of the
baseball/golf caps will be eligible for a duty allowance for the
U.S.-origin materials pursuant to subheading 9802.00.80, HTSUS,
provided the documentary requirements of section 10.24, Customs
Regulations (19 CFR 10.24) are met. Assuming the fabric
components are wholly formed and cut in the U.S., the tennis
visors under scenario 2, however, will qualify to enter under
subheading 9802.00.90, HTSUS, since the imported visors are
classified under subheading 6505.90, HTSUS, which is listed as a
qualifying "textile and apparel good" pursuant to the NAFTA and
the operations to be performed in Mexico are qualifying assembly
operations.
With respect to the production of the baseball/golf cap
crowns in scenario 3, neither subheading 9802.00.90, HTSUS, nor
subheading 9802.00.80, HTSUS, is applicable because no assembly
operation of the crown occurs in Mexico. Neither of the Chapter
98 subheadings is available to the visor portion of the
baseball/golf caps under scenario 3 because the visor is
assembled abroad from Mexican-origin components. Similarly,
production scenario 3 of the tennis visors does not invoke the
application of either of the Chapter 98 subheadings since
Mexican-origin fabric is used and the assembly operations occur
after importation into the U.S.
The operations that will be performed as described in
scenario 4 with respect to the baseball/golf caps do not invoke
subheading 9802.00.90, HTSUS, because the finished baseball/golf
caps that will be imported into the U.S. will not be produced
from fabric components all of which are wholly formed and cut in
the U.S. However, the U.S.-made visor portion that is sent to
Mexico will undergo qualifying assembly operations in Mexico.
Accordingly, the imported baseball/golf caps will be eligible for
a duty allowance pursuant to subheading 9802.00.80, HTSUS, for
the U.S.-origin components used to produce the visor portion of
the baseball/golf caps upon compliance with the documentary
requirements of 19 CFR 10.24.
HOLDING:
The country of origin, the country of origin marking
requirements, and the eligibility for a partial duty allowance
pursuant to either subheading 9802.00.80, HTSUS, or subheading
9802.00.90, HTSUS, for the four production scenarios of the
baseball/golf caps and the three production scenarios for the
tennis visors are set forth above.
A copy of this ruling 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