CLA-2: RR:CR:TE 966585 ASM
Diane L. Weinberg, Esq.
Meeks & Sheppard
330 Madison Ave.
New York, NY 10017
RE: African Growth and Opportunity Act; Subheading 9819.11.12; Braided Drawstring Fabric
Dear Ms. Weinberg:
This is in response to your request on behalf of your client, Orioxi International Corporation, dated June 25, 2003, requesting a binding ruling on the eligibility of drawstrings for duty-free treatment under the African Growth and Opportunity Act (“AGOA”). Samples have been provided with the request.
FACTS:
The subject merchandise consists of tubular braided drawstrings. According to the importer, the submitted samples are manufactured on braiding machines from 100 percent cotton yarn in China, and measure approximately 3/8 inch in width. The fabric samples are in four forms: Exhibit A - a finished drawstring with “tipped” ends (plastic tubes, ½ inch in length, used to secure the ends of the drawstring); Exhibit B - a single cut drawstring with no tipped ends (tipping will be added in a lesser developed beneficiary country); Exhibit C – a material length of the braid with tipping at specified points, serving as cutting lines (tipping will be cut in a lesser developed beneficiary country and separate drawstrings will be produced); Exhibit D – rolled drawstring braid in the piece with no tipping (article has no cutting lines and will be measured and cut in a lesser developed beneficiary country where tipping will be added to form a finished drawstring).
With respect to each of the drawstrings described above at Exhibits A, B, C, and D, the importer plans to send the drawstring fabric to a lesser developed beneficiary country in Africa for use in manufacturing various tops and bottoms that will be imported under the AGOA in subheading 9819.11.12, Harmonized Tariff Schedule of the United States (HTSUS). One of the countries being considered is the Kingdom of Lesotho.
ISSUE:
Whether the tubular braided drawstrings, when manufactured as described above and incorporated into garments to be manufactured in a designated lesser developed beneficiary country (LDBC) with non-originating fabric, disqualify the garments for preferential treatment.
LAW AND ANALYSIS:
The African Growth and Opportunity Act (AGOA) provides certain specified trade benefits for countries of sub-Saharan Africa. These benefits include duty-free treatment for certain non-textile articles previously excluded from preferential treatment under the Generalized System of Preferences, and duty- and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 112 of the Act (codified at 19 U.S.C. 3721). Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the AGOA. Once designated, a beneficiary country is entitled to the duty-free treatment for the designated non-textile articles determined not to be import-sensitive in the context of imports from the beneficiary sub-Saharan African countries. A second designation by the United States Trade Representative (USTR), published in the Federal Register, that a beneficiary country has taken the measures required by the Act to prevent unlawful transshipment and has adopted an effective visa system, is necessary before a beneficiary country may enjoy the duty-and quota-free benefits extended to textile and apparel articles under the Act. The Kingdom of Lesotho was designated a beneficiary country by Presidential Proclamation 7350, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59321). It was determined to be eligible for textile benefits under the AGOA by the USTR effective April 23, 2001. See 66 Fed. Reg. 21192, dated April 27, 2001.
Tariff Classification
The merchandise described at Exhibit A is imported into the LDBC as a finished braided drawstring tube with plastic tipped ends. Heading 6307, HTSUS, is a residual provision that provides for other made up articles of textile materials. The EN to heading 6307 states that this heading covers other made up articles of any textile material which are not included more specifically elsewhere in the tariff schedule. The finished drawstring braid described at Exhibit A is not more specifically provided for in the HTSUS. Therefore, it is properly classified under subheading 6307.90.5010, HTSUS, which provides for “Other made up articles, . . . Corset lacings, footwear lacings or similar lacings, Of cotton.” This classification is supported by Customs and Border Protection (CBP) Headquarters’ Ruling (HQ) 965230, dated June 3, 2002, which determined that certain finished textile shoelaces are properly classified in heading 6307, HTSUS, as “Other made up articles”.
The articles described at Exhibits B, and D, are unfinished tubular braided drawstrings. Heading 5808, HTSUS, specifically provides for “Braids in the piece.” The EN to heading 5808, HTSUS, provides in pertinent part:
Flat or tubular braids.
* * * *
Braid is made on special machines known as braiding or spindle
machines.
Varieties of braid include lacing (e.g., for boot or shoe laces), piping,
soutache, ornamental cords, braided galloons, etc. Tubular braid
may have a textile core.
Braid is used for edging or ornamenting certain articles of apparel
(e.g., decorative trim and piping) or furnishing articles (e.g., tiebacks
for curtains), as sheathing for electrical wiring, for the manufacture
of certain shoes laces, anorak or track suit cords, cord belts for
dressing gowns, etc.
The merchandise described at Exhibits B and D, are unfinished upon importation to the LDBC and each one has been made on a special braiding machine. As such, they are specifically described in the EN to heading 5808. Presumably, these braided tubes are intended to be used as functional drawstrings on certain types of wearing apparel. The classification of these braided drawstring tubes as “Braids in the piece . . .” in heading 5808, HTSUS, is supported by CBP’s decision in HQ 965230, dated June 3, 2002, which determined that certain unfinished shoelace materials were not suitable for the heavier or industrial application of twine, cordage, ropes, and cables that are classifiable under heading 5607, HTSUS, and the unfinished shoelaces were properly classified as “Braids in the piece . . .”, subheading 5808.10.7000, HTSUS.
Exhibit C is described as a material length of braid with plastic tipping at specified points, serving as cutting lines. The plastic tips have been adhered to the braid in Taiwan. Thus, it is necessary to consider whether the article would be classified as “Other made up articles” under heading 6307, HTSUS, or as “Braids in the piece” under heading 5808, HTSUS.
Section XI, Note 7(e), provides:
For the purposes of this section, the expression “made up” means:
* * * *
Assembled by sewing, gumming or otherwise (other than
piece goods consisting of two or more lengths of identical
material joined end to end and piece goods composed of
two or more textiles assembled in layers, whether or not
padded); . . .
Although the application of plastic tips qualifies as an assembly within the meaning of the aforementioned definition of “made up”, it is important to note that Section XI, Note 8 (a), states that “. . . except where the context otherwise requires, chapters 56 to 59, do not apply to goods made up within the meaning of note 7 above”. Furthermore, the EN’s to heading 5808 state that braids in the piece may be fitted with hooks, clasps, eyelets, etc. Such fittings are similar to the plastic tips that have been applied to the braid identified as Exhibit C. Accordingly, heading 5808, HTSUS, which provides for “Braids in the piece”, does not exclude those braids that have received some assembly.
In view of the foregoing, it is our determination that the tubular braiding described in Exhibits A, B, C, and D, are each properly classified within textile provisions of the HTSUS. Exhibit A is classified in subheading 6307.90.5010, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Corset lacings, footwear lacings or similar lacings, Of cotton.” Exhibits B, C, and D, are classified in subheading 5808.10.7000, HTSUS, which provides for “Braids in the piece; ornamental trimmings in the piece, without embroidery, other than knitted or crocheted; tassels, pompons and similar articles: Braids in the piece: Other: Of cotton or man-made fibers.”
Qualification under AGOA
The provisions implementing the textile provisions of the AGOA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in Subchapter XIX, Chapter 98, HTSUS (one provision may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the AGOA may be found at Sections 10.211 through 10.217 of the Customs Regulations (19 CFR 10.211 through 10.217).
Subheading 9819.11.12, HTSUS, provides, in relevant part, as follows:
Articles imported from a designated beneficiary sub-Saharan African country enumerated in U.S. note 1 to this subchapter:
Apparel articles wholly assembled …in one or more such lesser developed countries enumerated in U.S. note 2(d) to this subchapter, subject to the provisions of U.S. note 2 to this subchapter, regardless of the country of origin of the fabric or the yarn used to make such articles, if entered during the period beginning on the date announced in a Federal Register notice issued by the United States Trade Representative and continuing through September 30, 2004, inclusive …
Exhibit A:
Section 10.213(a)(5), by express language, states that the use of foreign-origin fabric would not render an article ineligible for AGOA treatment under this provision. Therefore, we must consider whether the finished textile drawstring is considered a “fabric component” or a “finding and trimming” when imported into the LDBC.
In prior rulings, CBP has determined that similar textile drawstrings are considered to be “fabric components” and not “findings and trimmings” for the purposes of eligibility of textile articles for preferential treatment under other programs. See HQ 559794, dated June 3, 1996, which held that a “textile drawstring cord” was a “fabric component” under the North American Free Trade Agreement. More recently, CBP issued a decision in HQ 965500, dated July 5, 2002, which cites HQ 559794 and affirms that textile drawstrings which are classified in heading 6307, HTSUS, are considered “fabric components”.
In view of the foregoing, it is our decision that the drawstring identified as Exhibit A, which is classified in heading 6307, HTSUS, the provision for “Other made up articles”, is considered a non-originating “fabric component” for the purpose of qualification for duty-free treatment under the AGOA. As a result, otherwise eligible apparel articles that incorporate foreign drawstrings that are considered “fabric components” under the HTSUS, will be disqualified from receiving preferential tariff treatment under the AGOA.
Exhibits B, C, and D:
The articles identified at Exhibits B, C, and D, are unfinished braids in the piece. As such, they are considered non-originating “fabric” under the AGOA.
As we have previously noted, section 10.213(a)(5), Customs Regulations (19 CFR 10.213(a)(5)), states that preferential tariff treatment applies to textile and apparel articles that are imported directly into the customs territory of the United States from a beneficiary country and "wholly assembled . . . in one or more lesser developed beneficiary countries regardless of the country of origin of the fabric or the yarn used to make the articles. "
In view of the foregoing, it is our decision that the articles identified as Exhibits B, C, and D, which are classified in heading 5808, HTSUS, the provision for “Braids in the piece”, are considered non-originating “fabric” for the purpose of qualification for duty-free treatment under the AGOA.
HOLDING:
Based on the information provided, the braided drawstrings identified as Exhibits B, C, and D, when manufactured as described above and incorporated into garments to be manufactured in a designated lesser developed beneficiary country with non-originating fabric, will not preclude the completed garments from eligibility for duty free treatment under subheading 9819.11.12, HTSUS, subject to the quantitative limitations set forth in U.S. Note 2, Subchapter XIX, Chapter 98, HTSUS, and assuming that the garments are imported from a designated beneficiary country directly into the customs territory of the United States. However, the inclusion of a finished textile drawstring, as described herein and identified as Exhibit A, will preclude the completed garments from eligibility for duty free treatment under the AGOA.
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