CLA-2 RR:CR:TE 966084 SG
Ms. Paula Serafin
Director of Imports
Delta Galil USA, Inc.
1501 West Third Street
Williamsport, PA 17701
RE: Classification of Girls' Knit Polyester Nightdress; Crushed Panne Fabric; U.S.- Caribbean Basin Trade Partnership Act; Subheading 9820.11.27, HTSUSA; Designated Short Supply Provision; Narrow Ribbon; Trimming
Dear Ms. Serafin: This is in response to your letters dated November 26, 2002, and February 5, 2003, requesting a binding ruling on the eligibility of a girl's sleepwear gown for duty-free treatment under the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). In your February 5, 2003, letter, you specifically request verification that the instant polyester crushed panne fabric purchased from Taiwan meets the requirements of the "short supply fabric list." You submitted a sample for our examination. FACTS: The sample, style 8689, is a girl's nightgown. It has a high-waisted bodice, set-in long sleeves, and an overall dress-like appearance. The long skirt is made of 100% nylon knit fabric and is partially covered with a sheer unpatterned nylon knit overlay, open at the front, which is set into the high bodice waistband. Sheer nylon fabric forms the sleeve cuffs. The bodice is made of brushed polyester knit panne fabric which we are advised is of a circular knit construction. Affixed to the upper left chest of the bodice is a Barbie as Rapunzel™ heat transfer. Affixed to the bodice, just above the center of the waistband, is a small bow made of 1/4 inch wide satin ribbon fabric. The long sleeves are made of nylon knit fabric. There is a 1/4 inch wide satin ribbon that covers the connecting sleeves and cuffs.
We are advised that the garment will be produced (cut and sewn) in Honduras with thread that will be imported from the United States. The fabrics used in the construction of the sleeves, cuffs, skirt, and skirt overlay are formed in the United States from yarn formed in the United States. No information was supplied indicating where the fibers making up the yarn were formed. The heat transfer is made in the United States. The trim (ribbon and bow) is imported from Hong Kong. The polyester panne fabric making up the bodice is made in Taiwan. Based on information provided by you the panne fabric is not available in the United States or a CBTPA beneficiary country.
ISSUE: Whether the sample is eligible for preferential tariff treatment under the CBTPA?
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 II of the Act 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 3107 of the Trade Act of 2002 (Pub. L. 107-210, 116 Stat. 1035), enacted on August 6, 2002, amended the CBTPA to modify the treatment accorded to certain textile and apparel articles imported from beneficiary CBTPA countries. Presidential Proclamation 7626, dated November 13, 2002, published in the Federal Register on November 18, 2002 (67 Fed. Reg. 69459) implemented the amendments to the CBTPA to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA. Section 211 of the CBTPA, among other things, 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, HTSUSA (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.
In addition, 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. It is noted that the issues raised in this ruling letter are outside the scope of the comments received.
Subheading 9820.11.27, HTSUSA, provides for the duty-free entry of:
Articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule: Apparel articles both cut (or knit-to-shape) and sewn or otherwise assembled
in one or more such countries from fabrics or yarn designated by the appropriate U.S. government authority in the Federal Register as fabrics or yarn not available in commercial quantities in the United States, under any terms as such authority may provide.
In Presidential Proclamation 7351, the President proclaimed that this treatment would apply to such apparel articles of fabrics or yarns designated by the appropriate U.S. government authority in the Federal Register. In Executive Order 13191, of January 17, 2001, published in the Federal Register on January 22, 2001 (66 Fed. Reg. 14) implementing the CBPTA, the President authorized the Committee for the Implementation of Textile Agreements (CITA) to determine whether particular yarns or fabrics cannot be supplied by the domestic industry in commercial quantities in a timely manner.
CITA designated as eligible for preferential treatment under subheading 9820.11.27 of the HTSUS, for purposes of the CBTPA, "apparel articles that are both cut and sewn or otherwise assembled in one or more eligible CBTPA beneficiary countries, provided the fabric of the outer shell is of crushed panne velour fabric wholly of polyester, of circular knit construction, classified in subheading 6001.92.00 (statistical reporting number 6001.92.0030) of the HTSUS and that all other fabrics are wholly formed in the United States from yarns wholly formed in the United States, that are imported directly into the customs territory of the United States from an eligible CBTPA beneficiary country." Emphasis added. See, 66 FR 186, published in the Federal Register on September 25, 2001.
An "eligible CBTPA beneficiary country" means a country which the President has designated as a CBTPA beneficiary country under section 213(b)(5)(B) of the CBERA (19 U.S.C. 2703(b)(5)(B)) and which has been the subject of a finding, published in the Federal Register, that the country has satisfied the requirements of section 213(b)(4)(A)(ii) of the CBERA (19 U.S.C. 2703(b)(4)(A)(ii)) and resulting in the enumeration of such country in U.S. Note 1 to subchapter XX of chapter 98 of the HTSUS.
Honduras has been 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). .
Subheading 6108.32, HTSUSA, provides for nightdresses and pajamas, of man-made fibers, knitted or crocheted. Webster's II New Riverside University Dictionary (Riverside 1984), at 794, defines a night dress as "n. 1. A nightgown." From the same source, a nightgown is defined as "n. A usu. loose garment worn in bed." The instant merchandise conforms to this denotation. As a result of the foregoing, the instant merchandise is classified under subheading 6108.32.0025, HTSUSA, textile category 651, as women's or girls' slips, petticoats, briefs, panties, nightdresses, pajamas, negligees, bathrobes, dressing gowns and similar articles, knitted or crocheted, nightdresses and pajamas, of man-made fibers, girls', other. The general column one rate of duty is 16.1 percent ad valorem and the applicable textile category code is 651. However, the nightgown may be eligible for preferential tariff treatment under the CBTPA.
As the garment is, in part, of crushed panne velour fabric, of polyester, of circular knit construction that has been designated as a "short supply" fabric under subheading 9820.11.27, HTSUSA, if all the other fabrics and yarns are wholly formed in the United States, and imported directly into the United States, the panne fabric does not have to be manufactured in the U.S. or a beneficiary country to be eligible for preferential treatment under the CBPTA.
As stated above, the nylon making up the sleeves, cuffs, and skirt of the sample are made from United States yarn, which is processed and formed in the United States. Provided that the nylon yarns are "wholly formed" in the United States (all 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), the garment would be eligible for preferential treatment under the CBPTA.
We note that there is a decorative narrow woven satin ribbon used as decorative trim on the sleeves of the subject garment. In addition, a small bow made of the same fabric is
affixed to the bodice. Neither the ribbon nor the bow is formed in the U.S. or a CBTPA beneficiary country.
As amended by section 211 of the CBTPA, 19 U.S.C. 2703(b)(2)(A) (vii)(I)(aa) permits the use of foreign origin findings or trimmings, provided that such findings and trimmings do not exceed 25 percent of the cost of the components of the assembled article. (Also cited at U.S. Note 3(a)(i), Subchapter XX, Chapter 98, HTSUS).
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 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(c)(1).
Thus, if the bow and ribbon are "findings or trimmings", and provided their total cost does not exceed 25% of the cost of the components of the nightgown, their country of manufacture will be immaterial. We must determine whether the satin ribbon and bow bud are considered findings or trimmings.
While "findings and trimmings" for purposes of the CBTPA are not specifically defined, the examples set forth above are indicative of the types of components that are considered to be within the purview of this provision. The exception for findings and trimmings was 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 United States and CBTPA beneficiary countries. See Headquarters Ruling Letter ("HQ") 562018, dated March 22, 2002. "Findings" are generally accepted to be sewing essentials used in textile goods while "trimmings" are decorative or ornamental parts. See, for example, 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.
Since the narrow satin ribbon is merely a decorative feature of the nightgown and is similar to the decorative lace trim identified as a trimming, it isconsidered a trimming. In addition, the small bow is similar to a "bow bud" which is listed in the exemplars as a finding or trimming. Accordingly, the bow and satin ribbon are trimmings, and will not disqualify the girl's nightgown from receiving preferential treatment under the CBPTA, provided the cost of the ribbon and bow is less than than 25 percent of the cost of the components of the assembled nightgown.
Assuming all the requirements of the subheading are satisfied, the girl's nightgown is classified under subheading 9820.11.27, HTSUSA, and is eligible for duty free/quota free treatment provided it is imported directly into the customs territory of the U.S. from Honduras, a CBTPA beneficiary country, and all other documentary requirements are satisfied. HOLDING: The girls' nightgown will be eligible for duty free/quota free treatment under subheading 9820.11.27, HTSUSA, provided that the garment is cut and sewn in Honduras from the fabrics described above, and the cost of the ribbon and bow is less than 25 percent of the cost of the components of the assembled nightgown. Furthermore, the nightgown must be imported directly into the customs territory of the United States from a CBTPA beneficiary country and all other requirements must be satisfied.
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