CLA-2 RR:CR:TE 966703 SG
Mr. Bruce Schiller
Vice President, Customs Brokerage & Compliance
Excel Global Logistics, Inc.
10205 N.W. 19 Street, suite 101
Miami, Florida 33172
RE: Classification of Men's Coveralls; U.S.-Caribbean Basin Trade Partnership Act; Reflective Tape; Emblems; Findings and Trimmings
Dear Mr. Schiller: This is in further reference to your letter dated August 15, 2003, on behalf of the Reed Manufacturing Company, requesting a binding ruling on whether reflective tape and emblems on men's coveralls (style no. 547CTX) are considered to be "findings and trimmings" under the United States-Caribbean Basin Trade Partnership Act (CBTPA). We note that New York Ruling (NY) J87205, dated September 3, 2003, was issued in response to the portion of your August 15, 2003, letter requesting a binding ruling on the classification of these coveralls.
FACTS: The sample, style 547CTX, is a men's coveralls constructed of woven 65 percent polyester, 35 percent cotton fabric. The coveralls feature long sleeves, a collar, a full front left over right placket with a three snap closure and an inner zipper closure. The garment has one chest patch pocket, two side slash pockets below the waist, two rear patch pockets, and two small leg pockets. In addition, the garment has a partially elasticized waist with six-inch long side seam slash openings that allow the wearer to reach garments worn underneath. The garment has sewn-on reflective tape on the arms, legs, chest, and shoulder area, an approximately 3-inch diameter circular emblem sewn on the left chest, and an approximately 7-inch by 10-inch rectangular emblem on the back of the garment.
We are advised that the garment will be produced (fabric cut to a pattern and completely assembled) in the Dominican Republic with thread that will be imported from the United States. The fabric used in the construction of the garment (with the exception of the woven label in the center of the neck of the garment), the band lining and the elastic fabric are all of U.S. origin, produced and finished in the U.S., using yarns of U.S. origin. The reflective tape and small emblem are manufactured in the U.S. We have been provided with no information as to where the small woven label in the neck is produced, however, the "cost value statement" appears to indicate that it is manufactured in the Dominican Republic. You specifically request a ruling as to whether the reflective tape and emblems are considered "trim and findings" or "fabric parts" for purposes of the CBPTA.
ISSUE: Whether the reflective tape and emblems on the sample are "findings and trimmings" under the CBTPA?
LAW AND ANALYSIS:
The United States-Caribbean Basin Trade Partnership Act (CBTPA) provides certain specified trade benefits for countries of the Caribbean region. The Act extends North American Free Trade Agreement (NAFTA) duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the Caribbean Basin Economic Recovery Act (CBERA) and provides for duty-free and quota-free treatment for certain textile and apparel articles which meet the requirements set forth in Section 211 of the CBTPA (amended 213(b) of the CBERA, codified at 19 U.S.C. 2703(b)).
Beneficiary countries are designated by the President of the United States after having met eligibility requirements set forth in the CBPTA. Eligibility for benefits under the CBTPA is contingent on designation as a beneficiary country by the President of the United States and a determination 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 implement and follow, or is making substantial progress toward implementing and following, certain customs procedures, drawn from Chapter 5 of the NAFTA, that allow the United States to verify the origin of products. Once both these designations have occurred, a beneficiary country is entitled to preferential treatment provided for by the CBTPA.
The Dominican Republic 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).
The provisions implementing the textile provisions of the CBTPA in the Harmonized Tariff Schedule of the United States (HTSUS) are contained, for the most part, in subchapter XX, Chapter 98, HTSUS (two provisions may be found in subheading 9802.00.80, HTSUS). The regulations pertinent to the textile provisions of the CBTPA may be found at §§10.221 through 10.228 of the Customs Regulations (19 CFR 10.221 through 10.228).
Subheading 9820.11.06, 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 sewn or otherwise assembled in one or more such countries with thread formed in the United States from fabrics wholly formed in the United States and cut in one or more such countries from yarns wholly formed in the United States, or from components knit-to-shape in the United States from yarns wholly formed in the United States, or both (including fabrics not formed from yarns, if such fabrics are classifiable in heading 5602 or 5603 of the tariff schedule and are wholly formed in the United States), under the terms of U.S. note 2(a) to this subchapter.
Pursuant to section 10.222, the term "wholly formed" with reference to yarn is defined as follows: "Wholly formed," when used with reference to yarns, means that all of 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.
We note that the fabrics of the garment are described as of U.S. origin. For purposes of this ruling we will assume that these yarns are "wholly formed" in a single country, the U.S. Based on this premise, the subject coveralls meet the terms of subheading 9820.11.06, HTSUSA.
You ask us to consider whether the tape and emblem are considered "trims and findings" or "fabric parts" for purposes of the CBTPA
With regard to "findings and trimmings," U.S. Note 3, Subchapter XX, HTSUS, provides:
(a) 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 or 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;
* * *
(b) For purposes of subdivision (a)(i) above, findings or trimmings eligible under such subdivision include sewing thread, hooks and eyes, snaps, buttons, "bow buds", decorative lace trim, elastic strips, zippers (including zipper tapes) and labels and other similar products. Elastic strips are considered findings or trimmings only if they are each less than 2.54 cm in width and used in the production of brassieres. For purposes of articles described in subheading 9820.11.06, 9820.11.18, and 9820.11.33, sewing thread shall not be considered to be findings or trimmings.
Thus, if the reflective tape and emblems are "findings or trimmings," and provided their total cost does not exceed 25% of the cost of the components of the coverall, their country of manufacture will be immaterial. We must therefore determine whether the reflective tape, small and large emblems 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 U.S. and CBTPA beneficiary countries. See 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, 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. CBP has previously held under subheading 9802.00.90, HTSUS, that fabric components such as shoulder pads, sleeve headers, and velveteen collars are not findings or trimmings. See HRL 559552, dated February 14, 1996, and HRL 558954, dated June 30, 1995. However, CBP has found certain fabric items to be similar to those listed in the exemplars, and thus considered findings or trimmings. In HQ 560520, dated September 22, 1997, CBP found a patch label with the words "TOMMY HILFIGER" sewn onto jeans to be a finding or trimming. CBP relied on the fact that the patch label was not an essential part of the jeans. In HQ 560726, dated December 12, 1997, CBP found that a Chinese-origin patch at issue depicting the "Pooh" character
symbolized a brand and added ornamentation to the shorts and therefore was a finding or trimming.
In HQ 965426, dated April 23, 2002, CBP found that a woven decorative patch in the form of an American flag sewn to the chest area of a children’s tank top was a
trimming. CBP, citing HQ 560726 and HQ 560520, found that the flag patch was ornamental and was a trimming. In all of these cases neither the finding nor the trimming comprised a large surface area of the garment.
The small circular emblem on the front of the coveralls is substantially similar to the Tommy Hilfiger patch considered in HQ 560520 and, accordingly, is a trimming and the use of foreign fabric for this emblem will not disqualify the coverall from receiving preferential treatment under the CBTPA, provided the cost of the emblem and all other findings and trimmings is less than than 25 percent of the cost of the components of the assembled coverall.
In our opinion, neither the reflective tape nor the rear rectangular patch comprising a large surface area of the coveralls are analogous to the sewing essentials determined to be examples of "findings" set forth in U.S. Note 3(b), Subchapter XX, HTSUS. In addition, like the suede yoke and elbow patches in HRL 559738, the reflective tape and the large rectangular patch, add a minimal stylistic element by virtue of their contrasting colors. Their primary purpose is functional rather than ornamental. In addition, it is our view the rectangular patch comprises a large surface area of the garment. In HQ 562435, dated September 25, 2002, CBP classified a shirt which had fabric pieces sewn in the shirt. CBP stated: In this instance, the six ancillary components are textile fabric components that we believe are beyond the scope of "findings" and "trimmings." None of the components are sewing essentials such as buttons or zipper tapes or otherwise analogous to any of the findings examples set forth in Subchapter XIX, U.S. Note 3(b), HTSUS, and therefore, they would not be considered "findings." In
HRL 559738, dated July 2, 1996, Customs held that suede yoke and elbow patches for a jacket did not constitute "findings" or "trimmings" as they served more than just a decorative purpose, unlike lace trim for instance. Although the inside collar band, outside collar band, undercollar, tri label piece and under cuff are in a contrasting color to the remainder of the shirt, they are similar to the suede yoke and elbow patches that were the subject of HRL 559738 in that they clearly serve more than just a decorative purpose. The v-insert piece, while a styling feature of the garment, is a part of the shirttail integral to the design of the bottom of the shirttail. Therefore, we find that the six ancillary components are not "trimmings."
Therefore, in regard to the facts of this case, the reflective tape strips and large rectangular patch sewn onto the exterior of the coveralls are not acceptable as findings
or trimmings under CBPTA. Accordingly, the coveralls will not be eligible for CBTPA preferential treatment if either the large patch or reflective strip material is manufactured of foreign fabric.
As neither the reflective tape nor the large rectangular emblem are "findings or trimmings", the fabric they are manufactured from must be wholly formed in the U.S. of yarns wholly formed in the U.S. for the subject coveralls to qualify for benefits under the CBTPA and classification in subheading 9820.11.06, HTSUSA.
In regard to this garment, the reflective strip and emblems are wholly formed in the U.S. of yarns wholly formed in the U.S. Accordingly, the imported article will be eligible for preferential treatment under subheading 9820.11.06, HTSUSA. However, the coverall will not be eligible for CBPTA preferential treatment if either the large patch or reflective strips is made of foreign fabric.
HOLDING:
Based on the information submitted, the small circular emblem used on the coveralls in the manner and size described constitutes a "trimming" for purposes of the CBTPA. Provided that the value of all foreign "findings and trimmings" used in the garment does not exceed the 25% limitation for these foreign-origin items and all of the requirements of the CBTPA are met, the use of foreign fabric for this emblem will not disqualify garments otherwise eligible for duty preference under the CBTPA.
Neither the reflective tape nor the large rectangular emblem is a "finding or trimming".
The men's coveralls before us will be eligible for duty free/quota free treatment under the CBTPA (subheading 9820.11.06, HTSUSA), as long as the large rectangular emblem and reflective tape is manufactured from fabric wholly formed in the U.S. of yarns wholly formed in the U.S.
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 CBP officer handling the transaction. Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division