CLA-2:CO:R:C:G 085906 SR
Mr. Lewis Lau
Cathco
100 Dolomite Drive
Downsview, Ontario
Canada M3J 2N3
RE: Reconsideration of HRL 084534; embroidered caps
Dear Mr. Lau:
This is in reference to your letter dated October 24, 1989,
requesting reconsideration of Headquarters Ruling Letter (HRL)
084534, dated August 24, 1989.
FACTS:
The merchandise at issue is baseball caps that are imported
into Canada, where they are embroidered before being imported
into the United States. HRL 084534, classified these hats under
subheading 6505.90.2060, Harmonized Tariff Schedule of the United
States Annotated (HTSUSA), as hats and other headwear. This
ruling was based on General Note 3(c)(vii)(R)(12) and
subdivisions (c)(vii)(G)and (H), of the United States-Canada
Free-Trade Agreement Implementation Act of 1988 (FTA). The
importer states the caps are unfinished as they enter Canada
because most people wear hats with logos.
ISSUE:
Whether the caps at issue qualify as Canadian goods under
the FTA.
-2-
LAW AND ANALYSIS:
The caps at issue are classifiable under subheading
6505.90.2060, HTSUSA, as hats and other headgear, whether or not
the embroidery has been added.
General Note 3(c)(vii)(B), of the FTA states:
(B) for the purposes of subdivision (c)(vii) of this note,
goods imported into the customs territory of the United
States are eligible for treatment as goods originating in
the territory of Canada" only if--
(1) they are goods wholly obtained or produced in the
territory of Canada and/or the United States, or
(2) they have been transformed in the territory of Canada
and/or the United States, so as to be subject--
(I) to a change in tariff classification in Canada
as described in the rules of subdivision
(c)(vii)(R) of this note, or
(II) to such other requirements subdivision
(c)(vii)(R) of this note may provide when no
change in tariff classification occurs, and
they meet the other conditions set out in
subdivisions (c)(vii)(F), (G), (H), (I), (J),
and (R) of this note.
The requirements for goods classifiable under Chapter 65, of
the HTSUSA, provided for in subdivision (c)(vii)(R)(12), include
a change in classification from one chapter to another, or
several specific changes that are designated within chapter 65.
Because no change in classification occurs due to the addition of
the embroidery to the caps, they do not qualify for special rates
of duty under the FTA.
The baseball caps at issue are completed articles when they
are imported into Canada. They are neither unassembled nor
dissembled goods. Therefore, subdivisions (c)(vii)(G) and (H)
are not applicable to this merchandise; and the value content
test does not apply.
-3-
HOLDING:
The caps at issue are classifiable under subheading
6505.90.2060, HTSUSA, which provides for hats and other headgear,
knitted or crocheted, or made up from lace, felt or other textile
fabric, in the piece (but not strips), whether or not lined or
trimmed; other, of cotton, flax or both, not knitted, headwear of
cotton, other. The textile category is 359, and the rate of duty
is 8 percent ad valorem.
The language in HRL 084534, that discusses whether
embroidery is considered to be assembly is irrelevant and should
therefore be revoked. HRL 084534, dated August 24, 1989, is
hereby modified accordingly.
Sincerely,
John Durant, Director
Commercial Rulings Division
6 cc A.D. New York Seaport
1 cc Durant
1 cc legal reference