CLA-02 RR:CR:SM 562349 KKV
Mr. Edward Ackerman
Grunfeld, Desiderio, Lebowitz
Silverman & Klestadt LLP
245 Park Avenue, 33rd Floor
New York, New York 10167-3397
Re: Eligibility of certain women’s woven fabric garments assembled in Mauritius for preferential treatment under AGOA; “findings and trimmings”
Dear Mr. Ackerman:
This is in response to your letter of January 11, 2002, on behalf of Tommy Hilfiger Sportswear, Inc., requesting a ruling on the eligibility of certain women’s woven garments assembled in Mauritius for preferential treatment under the Africa Growth and Opportunity Act (AGOA). A sample of each of the garments accompanied your request. We regret the delay in responding.
FACTS:
At issue are three different women’s woven fabric garments, described in the following manner:
Women’s Cotton Canvas Carpenter Shorts – Style SP02S
The cotton canvas short contains two front pockets, two rear patch pockets, a smaller patch pocket extending from the bottom rear left patch pocket and a carpenter’s loop extending down from the rear right patch pocket. The short also features a zipper fly front and front button closure at the waist and a ribbon hanger loop on the inside rear of the waistband, as well as decorative ribbon overlay on the carpenter loop. Both the cotton canvas main body fabric and the pocketing fabric will be entirely wholly formed and cut either in Mauritius or the United States; the garment will be completely assembled in Mauritius.
The carpenter loop, patch pockets and belt loops are all comprised of the same cotton canvas fabric as the main garment body. However, the “ribbon tape” carpenter loop overlay and hanger loop will be comprised of “foreign” fabric (i.e., fabric which is formed neither in the U.S. nor in an AGOA beneficiary country). You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the U.S. are made from yarns originating in the U.S., and that fabrics wholly formed in Mauritius are made from yarns originating either in the U.S. or in a designated beneficiary sub-Saharan African country.
Women’s Cotton Twill Belted Capri – Style SU02
The cotton twill belted capri contains two front pockets, two flap pockets in the back, a braided fabric belt threaded through button-hole openings around the waist and a 100-percent cotton blue and white striped oxford fabric around the inside of the waistband. Although not present on the submitted sample, we are informed that the button-hole openings on the waistband will be replaced by metal eyelets of foreign origin. The shell fabric of this pant will be 100-percent cotton twill fabric wholly formed and cut entirely either in the U.S. or Mauritius. The striped oxford fabric and braided belt are comprised of materials which are of “foreign” origin.
The product will be completely assembled in Mauritius. You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the U.S. are made from yarns originating in the U.S., and that fabrics wholly formed in Mauritius are made from yarns originating either in the U.S. or in a designated beneficiary sub-Saharan African country.
Women’s Sailor Capri Jeans – Style SP02
The sailor capri jeans contain two front and two rear patch pockets, a front button fly closure and belt loops. The shell will be 100-percent cotton denim wholly formed and cut entirely either in the U.S. or Mauritius. The jeans also feature grosgrain tape strips, of foreign origin, located inside the waistband and affixed to the front right patch pocket as a loop securing a metal D-ring holder.
The product will be completely assembled in Mauritius. You advise that the aggregate value of the non-qualifying foreign components will not exceed 25 percent of the cost of the components of the assembled product. Although not stated in your letter, we are assuming for purposes of this ruling that the fabrics wholly formed in the U.S. are made from yarns originating in the U.S., and that fabrics wholly formed in Mauritius are made from yarns originating either in the U.S. or in a designated beneficiary sub-Saharan African country.
With regard to the carpenter’s shorts (Style SP02S), you assert that the foreign components (i.e., grosgrain “ribbon tape” fabric used as a hanger loop at the waistband and an overlay on the carpenter loop) will not preclude the garment from receiving AGOA preferential treatment under subheading 9819.11.09, HTSUS, or subheading 9802.00.8042, HTSUS, because the ribbon tape qualifies as a “finding or trimming.” You make a similar assertion with regard to the blue and white striped oxford fabric and the braided belt used on the belted capri pants (Style SU02) and the grosgrain fabric used at the waistband and to hold a D-ring at the front pocket of the sailor capri jeans (Style SP02).
No information was received regarding the country of origin of the yarn, sewing thread, embroidery thread, zippers, zipper tape, D-ring, grommets, buttons, labels, pocketing fabric for both styles of pants, interlining for waistband or the binding used on the inner portion of the waistband on the twill belted capri pants. Additionally, no information was received regarding the location in which the further fabrication of the twill belted capri, to create belt loops, will take place.
ISSUE:
Whether certain foreign-origin materials used in the construction of the submitted garments are “findings and trimmings,” the use of which will not disqualify otherwise eligible garments, assembled in Mauritius in the manner described above, for preferential tariff and quota treatment under section 112(b)(1) or (b)(3) of the Act, when imported into the U.S.
LAW AND ANALYSIS:
The Trade and Development Act of 2000 (“the Act) was signed into law on May 18, 2000 (Pub. L. 106-200, 114 Stat. 251). Title I of the Act concerns trade benefits for sub-Saharan Africa and is referred to as the African Growth and Opportunity Act (“AGOA”). Section 112 of the Act (codified at 19 U.S.C. 3721) specifies the textile and apparel articles that are eligible for duty-free and quota-free treatment when imported directly into the customs territory of the U.S. from a beneficiary sub-Saharan African country. Section 3108 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 933), enacted on August 6, 2002, amended the AGOA to modify the treatment accorded to textile and apparel articles imported from beneficiary sub-Saharan African countries.
Presidential Proclamation 7350 dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 FR 59321), implemented the AGOA by designating the eligible beneficiary sub-Saharan African countries and amending Chapter 98, Harmonized Tariff of the U.S. (HTSUS) (including the creation of new subchapter XIX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the AGOA. See also, Presidential Proclamation 7626, dated November 13, 2002, published in the Federal Register on November 18, 2002 (67 FR 69459), which implemented the changes made by section 3108 of the Trade Act of 2002. The textile and apparel trade benefits provided by the AGOA are available to eligible articles imported from countries that the President designates as beneficiary sub-Saharan African countries, provided that the U.S. Trade Representative (“USTR”) has determined that these countries (1) have adopted an effective visa system and related procedures to prevent unlawful transshipment and use of counterfeit documents, and (2) have implemented and follow, or are making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles.
Mauritius is among the countries designated by the President as beneficiary sub-Saharan African countries in Presidential Proclamation 7350. In addition, effective January 19, 2001, the USTR determined that Mauritius satisfies the two criteria set forth above (see notice published in the Federal Register on January 31, 2001 (66 FR 8440)).
Interim Customs Regulations to implement the trade benefit provisions of the AGOA were published in the Federal Register as Treasury Decision (T.D.) 00-67 on October 5, 2000 (65 FR 59668). Public comments were invited on the Interim Regulations for submission by December 4, 2000.
Section 112(b)(1) of the Act, as recently amended by section 3108 of the Trade Act of 2002, provides, in pertinent part, that preferential treatment applies to –
Apparel articles sewn or otherwise assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut, or from components knit-to-shape, in the United States, from yarns wholly formed in the United States, (including fabrics not formed from yarns, if such fabrics are classifiable under heading 5602 or 5603 of the Harmonized Tariff Schedule of the United States and are wholly formed in the United States) that are –
entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or
entered under chapter 61 or 62 of the Harmonized Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States but for the fact that the articles were embroidered or subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, screen printing, or other similar processes.
Articles meeting the requirements of section 112(b)(1) of the Act are eligible for duty-free and quota-free entry.
Section 112(b)(3) of the Act, as recently amended by section 3108 of the Trade Act of 2002, provides, in pertinent part, that preferential treatment applies to –
Apparel articles wholly assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub-Saharan African countries from yarn originating either in the United States or one or more beneficiary sub-Saharan African countries…
Articles meeting the requirements of section 112(b)(3) of the Act are eligible for duty-free and quota-free entry.
Section 112(d)(1)(A) of the Act provides that:
An article otherwise eligible for preferential treatment under this section shall not be ineligible for such treatment because the article contains findings or trimmings of foreign origin, if the value of such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled article. Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, “bow buds”, decorative lace trim, elastic strips, and zippers, including zipper tapes and labels. Elastic strips are considered findings or trimmings only if they are each less than 1 inch in width and used in the production of brassieres.
See also U.S. Note 3(a)(i) and 3(b), subchapter XIX, Chapter 98, HTSUS, and 19 CFR 10.213(b)(1)(i).
While “findings and trimmings” for purposes of the AGOA were 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 sub-Saharan African 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,” Customs has previously held under subheading 9802.00.90, HTSUS, that fabric items such as shoulder pads, sleeve headers, and velveteen collars are not “findings and trimmings.” See Headquarters Ruling Letter (HRL) 559552, dated February 14, 1996, and HRL 558954, dated June 30, 1995. In HRL 559738, dated July 2, 1996, Customs held that a synthetic suede yoke and elbow patches are not “findings and trimmings” because they comprise a large surface area 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, HTSUS (formerly the Special Regime Program) and the Special Access Program. See HRL 560520, dated September 22, 1997, and HRL 560726, dated December 12, 1997. Moreover, in HRL 956426, dated April 23, 2002, Customs held that a woven decorative patch sewn to the chest area of a sleeveless knit is a “trimming” for purposes of the CBTPA. Similar to the patches in 560520 and 560726, supra, the patch was considered to add ornamentation to the garment.
Upon examination of the submitted samples, we find that the ribbon tape used on the carpenter short (Style SP02S) at the waistband and on the hanger loops, as well as the grosgrain ribbon used on the denim sailor capris (Style SP02) at the inside waistband and on the left patch pocket to hold the D-ring are not necessary structural components incorporated into garments, nor do they comprise a large surface area of the garments, but rather are small items which have been applied on top of the existing garment as a decorative item. Accordingly, we find that the ribbon tape and grosgrain ribbon used on these garments in the manner described above constitute “trimmings” for purposes of the AGOA, the use of which will not disqualify garments otherwise eligible for duty preference under section 112(b)(1) or (b)(3) of the Act, provided that their value does not exceed the 25% limitation for these foreign-origin items.
With regard to the blue and white striped oxford fabric used in the inside waistband of the twill belted capri pants (Style SU02) however, we note that while the fabric adds a minimal stylistic element by virtue of its contrasting color, its primary purpose is structural rather than ornamental. Therefore, the fabric is not a “trimming.” Nor is it a “finding.” Unlike the reinforcing tape at issue in HRL 559552, supra, the blue and white oxford fabric is not sewn between the shell of the garment and the lining to strengthen a seam; instead, the fabric is used to finish the pants at the top of the waistband and to cover the holes that will be created to hold the belt. Used in this manner, the fabric operates as a lining. While the term “findings” has also been defined as “a term referring to supplementary fabrics employed in making a garment such as zipper tapes, lining, pocketing, and waistband” (See I. Wingate, Fairchild's Dictionary of Textiles (1970), CITA has specifically excluded linings and pocketings from consideration as “findings” for purposes of the Special Regime and Special Access programs by requiring them to be U.S. formed and cut (See, HRL 559552, dated February 14, 1996, where Customs stated that, “[t]he Committee for the Implementation of Textile Agreements (CITA) defines “U.S. formed and cut parts” as all fabric components, including linings and pocketing, with the exception of findings and trimmings). Accordingly, the blue and white oxford fabric is a component, and does not constitute a “finding” or “trimming” for purposes of the AGOA.
Nor is the braided fabric belt a “finding” or “trimming.” As previously indicated, the exception for findings and trimmings was necessarily intended to be of a restrictive nature – for a foreign textile to fall within the terms of the exception, it must either be named in the examples of findings or trimmings, or be substantially similar to those articles. The braided belt does not meet this criterion. Upon examination of the submitted sample, we note that because the braided fabric belt is specifically sized for the particular openings on the garment (regardless of whether the current button-hole design or proposed metal rivets are used to finish the openings), the belt and the capri pants are adapted to each other. The two components are mutually complimentary in their use, are packed together and would not normally be offered for sale as separate articles. Therefore, the articles are considered to be a composite good for tariff classification purposes, pursuant to General Rule of Interpretation (GRI) 3(b) and are classifiable together as a single product. See HRL 955523, dated June 23, 1994. Consequently, the fact that the belt is made from foreign fabric will disqualify the pants from receiving AGOA treatment if the two are imported together.
HOLDING:
Based on the information submitted, the ribbon tape and grosgrain ribbon used on the carpenter short (Style SP02S) and the denim sailor capris (Style SP02) in the manner described constitute “trimmings” for purposes of the AGOA, the use of which will not disqualify garments otherwise eligible for duty preference under section 112(b)(1) or (b)(3) of the Act, provided that their value does not exceed the 25% limitation for these foreign-origin items.
The blue and white striped oxford fabric and the woven braided belt used in the twill belted capri pants (Style SU02), are fabric components which do not qualify as “findings” or “trimmings” for purposes of the AGOA. However, because the capri pants and woven fabric belt are considered to be a composite good pursuant to GRI 3(b), the fact that the belt is made from foreign fabric will disqualify the garment from receiving AGOA treatment if the two articles are imported together.
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,
Myles B. Harmon
Director
Commercial Rulings Division