CLA-2 RR:CR:TE 964521 mbg
Mr. Patrick Gill, Esq.
Rode & Qualey
295 Madison Avenue
New York, NY 10017
RE: CBTPA; woman’s knit top with embroidery; subheading 9820.11.18; heading 6109, HTSUS
Dear Mr. Gill:
This is in response to your letter of August 23, 2000, on behalf of your client, Capital-Mercury Apparel, Ltd., requesting a binding ruling on the eligibility of a woman’s knit tank top, style number 8-19423, for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted a sample for our examination.
FACTS:
The subject merchandise, style number 8-19423, is a sleeveless woman’s knit top constructed of 100 percent cotton fabric. You have provided that the knit top is manufactured in Guatemala 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 Guatemala into garment components and sewing thread formed in the United States is used to assemble the components.
The sleeveless knit top features a round neckline with self fabric capping, self fabric capping on the arm holes and a hemmed bottom. The knit top will have a floral design embroidered on the bodice using embroidery thread of foreign origin.
This garment may be eligible for preferential tariff treatment within subheading 9820.11.18, HTSUSA, 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 women’s knit top with embroidery is 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. Guatemala 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.
Subheading 9820.11.18, HTSUSA, provides for the duty-free entry of:
Articles imported from 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 top is said to be cut and assembled in Guatemala from fabric produced in United States with sewing thread produced in the United States.
In a recent informed compliance publication, Customs provided basic definitions of textile terms which are commonly utilized in the HTSUS and by the trade community. These definitions are not intended to be definitive but rather to provide a basic guideline for classification purposes. In the informed compliance publication, tank tops are defined as:
Tank tops (6109) - are sleeveless garments with oversized armholes, with or without significant drops below the armhole openings. The front and the back may have a round, V, U, scoop, boat, square or other shaped neck. The top of the neckline is below the nape of the neck. The body is supported by straps not over two inches in width reaching over the shoulder. The straps are attached to the garment and are not easily detachable. The bottom hems may be straight, curved or side-vented. Garments classified as tank tops do not have pockets, except for breast pockets; belt treatments of any kind, including simple loops; or any type of front or back neck opening, including buttons, zippers, etc. They do not have a drawstring, rib knit waistband, or other means of tightening at the bottom.
See, U.S. Customs Service, What Every Member of the Trade Community Should Know About: Apparel Terminology Under the HTSUS 34 Cust. B. & Dec. 52 (Dec. 27, 2000).
Furthermore, in circumstances such as these, where the identity of a garment is ambiguous for classification purposes, reference to The Guidelines for the Reporting of Imported Products in Various Textile and Apparel Categories, CIE 13/88, (“Guidelines”) is appropriate. The Guidelines were developed and revised in accordance with the HTSUSA to ensure uniformity, to facilitate statistical classification, and to assist in the determination of the appropriate textile categories established for the administration of the Arrangement Regarding International Trade in Textiles.
Regarding the classification of tank tops, the Guidelines similarly state that tank tops are “sleeveless with oversized arm holes, with or without a significant drop below the arm. The front and the back may have a round, V, U, scoop, boat, square or other shaped neck which must be below the nape of the neck. The body of the garment is supported by straps not over two inches in width reaching over the shoulder. The straps must be attached to the garment and not be easily detachable. Bottom hems may be straight or curved, side-vented, or of any other type normally found on a blouse or shirt, including blouson or drawstring waists or an elastic bottom.” See Guidelines for the Reporting of Imported Products in Various Textile and Apparel Categories, CIE13/88 at 20 (Nov. 23, 1988). (emphasis added.)
Upon review of the subject merchandise and upon application of the Guidelines, it is the determination of this office that this knit garment is not classified as a tank top since the straps are over two inches in width. The subject women’s knit top is similar to a tank top and classified in subheading 6109.10.0070, HTSUSA, which provides for “T-shirts, singlets, tank tops and similar garments, knitted or crocheted: Of cotton: Women’s or girls’: Other: Other.”
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.
The CBTPA legislation states that the assembly of the garment which qualifies for preferential treatment under this provision of the CBTPA must occur using US formed thread. Although the legislation specifies that the “thread” must be manufactured in the US, it is a commonly understood practice in the textile industry that sewing thread is used for assembly and, as with the subject merchandise, that “embroidery” is considered further processing rather than actual “assembly” of the garment. The embroidery is done on the garment for decorative purposes and not as part of the actual garment assembly and therefore foreign thread may be used for the embroidery under the provisions of the CBTPA.
Therefore, in regard to the facts of this case, the subject knit top with embroidery classified in subheading 6109.10.0070, HTSUSA, is said to be cut and assembled in Guatemala from fabrics produced in the U.S. with sewing thread produced in the US. The embroidery thread is of foreign origin in Style # 8-19423 but is considered to be a trimming.
The imported article will be eligible for preferential treatment under subheading 9820.11.18, HTSUSA, provided the value of the embroidery thread does not exceed 25 percent of the cost of the components of the assembled garment and the garment is assembled in Guatemala 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 women’s knit top and if constructed of fabrics wholly formed in the US from yarns wholly formed in the US, the subject women’s embroidered tank top, Style 8-19423, as described above, is eligible for duty free/quota free treatment under subheading 9820.11.18, HTSUSA, provided it is 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