CLA-2 RR:CR:SM 561427 BLS
Bruce Schiller, Vice President/General Manager
Fashion Logistics and Customs Brokerage
MSAS Global Logistics Inc.
10205 N.W. 19th Street
Miami, Florida 33172
RE: Applicability of subheading 9802.00.80, HTSUS, to men’s shorts imported
from the Dominican Republic
Dear Mr. Schiller:
This is in reference to your letter dated May 17, 1999, on behalf of Tropical Sportswear International, requesting a ruling concerning the eligibility for the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), of certain men’s woven shorts subject to certain processing in the Dominican Republic. Samples of the garments before and after the processing have been submitted with the ruling request. We regret the delay in our response.
FACTS:
In the Dominican Republic, the subject garments are assembled by operations that include sewing of fabric cut to pattern in the U.S. Subsequent to the assembly operations, the garments will be subject to a process which consists of a wash with a cellulose enzyme and silicone, followed by a wash with an alkaline detergent, rinse, and finished with a silicon and buffer wash. You state that the purpose of these operations is to remove excess sizing (starch) and soften the feel of the fabric.
ISSUE:
Whether men’s shorts assembled and subjected to the above-described processing in the Dominican Republic are eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, when returned to the U.S.
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LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
[a]rticles ... assembled abroad in whole or in part of fabricated components, the product of the United States, which (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, such as cleaning, lubricating and painting.
All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).
Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states in part that:
[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components.
Operations incidental to the assembly process are not considered further fabrication operations, as they cannot always be provided for in advance of the assembly operations. See 19 CFR 10.16(a).
Section 10.16(b)(1), Customs Regulations (19 CFR 10.16(b)(1)), provides that “cleaning” is an example of an incidental operation. However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c). Section 10.16(c)(4) specifically provides that the chemical treatment of components or assembled articles to impart new
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characteristics, such as shower-proofing, permapressing, sanforizing, dyeing, or bleaching of textiles, is not considered incidental to the assembly process.
As requested, we will address only the processing performed in the Dominican Republic subsequent to the assembly operation. For purposes of this ruling, we are assuming that the U.S.-origin components otherwise qualify for subheading 9802.00.80, HTSUS, treatment.
In Headquarters Ruling Letter (HRL) 554676 dated November 23, 1987, denim fabric dyed in the U.S. was assembled into wearing apparel articles in the Dominican Republic, and then processed in a washing machine. It was stated that this processing not only cleaned the newly assembled garments of dust and dirt but also of the excess dye, which would prevent the dye from running and staining other garments during the first washing by the consumer. Customs held that subjecting the textile articles to high strength detergent (without bleach) was a process analogous to cleaning and considered incidental to assembly. In HRL 554599 dated June 8, 1987, it was held that subjecting assembled garments to detergent and a fabric softener and then pressing them were operations incidental to assembly, because the inclusion of a softener was considered a part of the cleaning process. The softener was also comparable to commercial softeners available to consumers. Furthermore, in HRL 554695, dated June 16, 1989, it was held that processing garments, which were assembled in the Dominican Republic or Costa Rica, with a detergent and softener in hot water without any bleach constituted a cleaning operation which was incidental to assembly. It was stated that the process removed excess pigment from the fabric with only a minimal change in the fabric's color.
In HRL 557195 dated October 14, 1993, Customs considered trousers and shorts made from a variety of fabrics that were washed with a detergent and enzyme fabric softener to give the garments a softer, smoother feel. Customs found in that case that the addition of an enzyme in the fabric softener did not alter the color of the fabric or change its texture, and, therefore, was more analogous to those cases which have held that washing in detergent and fabric softener are operations incidental to assembly. Accordingly, we held that, in regard to the specific facts of that case, washing the garments in hot water, detergent and an enzyme fabric softener constituted an operation incidental to the assembly process. See also HRL’s 560361 dated September 4, 1997; 554599 dated June 8, 1987; 554497 dated March 18, 1987; and 554582 dated March 12, 1987.
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However, where an enzyme washing operation was used to impart a stonewashing effect to boys’ jeans, Customs found that the process imparted new characteristics to the apparel and thus was not considered incidental to assembly as it fell within the parameters of 19 CFR 10.16(c)(4). In Levi Strauss & Co. v. United States, No. 97-1536, decided July 27, 2000, the United States Court of Appeals for the Federal Circuit, upon remand from the Supreme Court, reversed the Court of International Trade and held that Customs correctly applied 19 CFR 10.16(c) in that case to cover the enzyme washed jeans, thus precluding classification under subheading 9802.00.80, HTSUS. See also Haggar Apparel v. United States, No. 97-1002, a companion case also upon remand from the Supreme Court (decided July 27, 2000), where the Court of Appeals held that Customs properly applied 19 CFR 10.16(c) in finding that “permapressing” of men’s pants was not incidental to assembly.
In the instant case, visual examination of the samples indicates that the sample marked “Before Wash” is slightly darker in shade than the sample
marked “After Wash.” However, laboratory analysis discloses no substantial differences between the “Before” and “After” samples such as fiber breakage and ruptures, surface fuzziness or any other physical damage. As distinguished from the “stonewashing” and “permapressing” processes in Levi Strauss and Haggar,
respectively, we find that the processing involved in this case is not a significant operation which imparts new characteristics to the men’s shorts.
Accordingly, on the basis of the information submitted, and consistent with the rulings discussed above, it is our opinion that the subject processing is encompassed by “cleaning” within the meaning of 19 CFR 10.16(b)(1), and therefore is considered incidental to the assembly process. Therefore, assuming the assembly operation otherwise complies with the requirements of HTSUS subheading 9802.00.80, the imported men’s shorts may be entered under subheading 9802.00.80, with allowances in duty for the cost or value of the U.S. components incorporated therein, upon compliance with the documentary requirements of 19 CFR 10.24.
HOLDING:
On the basis of the information submitted, it is our opinion that the above-described processing is incidental to the assembly operation, pursuant to 19 CFR 10.16(b)(1). Therefore, assuming the assembly operation otherwise complies with the requirements of HTSUS subheading 9802.00.80, the imported men’s shorts may be entered under subheading 9802.00.80, with allowances in
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duty for the cost or value of the U.S. components incorporated therein, upon compliance with the documentary requirements of 19 CFR 10.24.
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
Commercial Rulings Division