CLA-2-05 CO:R:C:S 558818/558819 DEC
Mr. Bruce Schiller
MSAS Customs Logistics, Incorporated
8725 NW Eighteenth Terrace - Suite 301
Miami, Florida 33172
RE: Silk wash; Pigment wash; 19 CFR 10.16; HRL 555686; HRL 555008;
HRL 554939; HRL 554676; HRL 554232; HRL 554599; HRL 554497;
HRL 554582; United States v. Mast Industries, Inc., 515 F. Supp. 43,
(CIT 1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981); General Motors
Corp. v. United States, 976 F.2d 716, 719 (Fed. Cir. 1992); Samsonite
Corp. v. United States, 702 F. Supp. 908, 911 (1988), aff'd, 889 F.2d 1074
(1989)
Dear Mr. Schiller:
This is in response to your letters dated September 23, 1994, and October 5,
1994, on behalf of Tropical Sportswear International in which you seek a ruling
regarding the eligibility of garments subjected to a "silk wash" or, alternatively, to a
"pigment wash" process for the partial duty exemption under subheading 9802.00.80,
Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
You indicated in your submissions that Tropical Sportswear International will
assemble various garments in the Dominican Republic and Costa Rica from U.S.-origin
components. In addition, Tropical Sportswear International intends to wash these
garments using either a "silk wash" or a "pigment wash." The wash processes each
account for less than 5% of the entered cost of the garments.
The "silk wash" is to be applied to soften cotton fabrics. You have described the
process as consisting of the following steps:
1. Fill the machine with 140F degrees water add 0.1 wt. percent
"Hiposcour 3-80" (a non-ionic wetting agent) and wash for 5 minute.
2. Add 5.0 wt. percent "Hipochem Silfin whp" (cationic amino functional
silicon). Wash for an additional 7 minutes.
The garments that are subjected to the "pigment wash" process are intended to
be used to make garments that are made of 100% canvass fabric. The cutting of the
fabric to pattern for garments subjected to this wash process will occur in the United
States. After the garments are assembled in either Costa Rica or the Dominican
Republic, the garments will be subjected to the following "pigment wash" process. The
mixture of chemicals that are added to the washing process are:
1. Hiposcour 3-80
2. Lt. Special
3. Hipochem MRC
4. Hipochem PDD
5. Hipochem Silfin WHP
You indicate that the detergent used in this process does not contain any bleach,
oxidants, or perborates and that the fabric is engineered to intentionally cause a
substantial color loss after its initial washing.
ISSUE:
Whether the garments subjected to the pigment wash or silk wash process as
described above will qualify for the partial duty exemption available under subheading
9802.00.80, HTSUS, when returned to the United States.
LAW AND ANALYSIS:
Subheading 9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS) provides for a partial duty exemption for
(a)rticles . . . assembled abroad in whole or in part of fabricated
components, the product of the United States, which (a) were exported
in condition ready for assembly without further fabrication, (b) have not
lost their physical identity in such articles by change in form, shape or
otherwise, and (c) have not been advanced in value or improved in
condition abroad except by being assembled and except by operations
incidental to the assembly process such as cleaning, lubricating, and
painting.
All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a
component may receive a duty allowance. An article entered under this tariff provision
is subject to duty upon the full cost or value of the imported assembled article, less the
cost or value of the United States components assembled abroad, provided the section
10.24, Customs Regulations (19 CFR 10.24), documentary requirements are satisfied.
Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states, in part, that
The components must be in condition ready for assembly without further
fabrication at the time of their exportation from the United States to
qualify for the exemption. Components will not lose their entitlement to
the exemption by being subjected to operations incidental to the
assembly either before, during, or after their assembly with other
components.
Operations incidental to the assembly process are not considered further fabrication
operations, as they are of a minor nature and cannot always be provided for in advance
of the assembly operations. However, any significant process, operation or treatment
whose primary purpose is the fabrication, completion, physical or chemical
improvement of a component precludes the application of the exemption under
subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c). According
to 19 CFR 10.16(c)(4), the chemical treatment of components or assembled articles to
impart new characteristics, such as shower- proofing, permapressing, sanforizing,
dying or bleaching of textiles, is not considered incidental to the assembly process.
Consistent with the above regulation, Customs has held that operations such as
stone-washing, acid-washing and ovenbaking are not incidental to the assembly
process and preclude subheading 9802.00.80, HTSUS, treatment to the U.S.
components subjected to such an operation. See, Headquarters Ruling Letter (HRL)
555686, dated July 23, 1990; HRL 555008, dated March 24, 1990; and HRL 554939,
dated November 15, 1988.
In HRL 554676, dated November 23, 1987, dyed denim fabric was assembled
into wearing apparel articles in the Dominican Republic, and then washed in a washing
machine. It was stated that the washing not only cleaned the newly assembled
garments of dust and dirt but also of the excess dye, which would prevent the dye from
running and staining other garments during the first washing. The detergents used in
the foreign washing cycle were either plain high strength detergent or high strength
detergent containing about 10 percent bleach substance. It was held that washing the
textile articles with high strength detergent was a process analogous to cleaning, and
considered incidental to assembly; however, washing with a high strength detergent
containing a 10 percent bleach was regarded as too substantial to be treated as merely
incidental. The bleaching changed the color of the exported fabric, similar to dyeing
fabric, and was not considered an incidental operation. In HRL 554232, dated August
25, 1986, bleaching and softening exported fabric was also regarded as too substantial
to be treated as merely incidental because there was not only a change in color, but a
change in texture as well.
The foregoing rulings are distinguished from HRL 554599, dated June 8, 1987,
which held that washing garments in a fabric softener and pressing them were
operations incidental to assembly, because the inclusion of a softener in the wash
cycle was considered a part of the cleaning process. The softener was also
comparable to commercial softeners available to retail consumers. Furthermore, in
HRL 554695, dated June 16, 1989, it was held that washing garments, which were
assembled in the Dominican Republic or Costa Rica, with a detergent and softener in
hot water without any bleach constituted a minor procedure with minimal change in
color. It was stated that the washing process removed sizing and excess pigment from
the fabric and merely constituted a cleaning operation. The same conclusion was
reached in HRL 554497, dated March 18, 1987, which involved washing assembled
garments in a commercial laundry using a standard detergent and softener, and tumble
drying and lightly pressing them, and in HRL 554582, dated March 12, 1987, which
involved garments washed in an industrial machine utilizing an alkaline detergent and
fabric softener.
In this case, the issue is whether the pigment wash or the silk wash process
resemble cleaning operations which would not preclude the application of the
subheading 9802.00.80, HTSUS, partial duty exemption or, alternatively, whether the
wash processes are operations that add new characteristics to the garments, thereby
precluding the fabric from subheading 9802.00.80, HTSUS, treatment. It is alleged that
the pigment and silk wash processes are cleaning procedures.
According to United States v. Mast Industries, Inc., 515 F. Supp. 43, (CIT 1981),
aff'd, 69 CCPA 47, 668 F.2d 501 (1981), the court, in examining the legislative history
of the meaning of "incidental to the assembly process," stated that
[t]he apparent legislative intent was to not preclude operations that
provide an "independent utility" or that are not essential to the
assembly process; rather, Congress intended a balancing act of all
relevant factors to ascertain whether an operation of a "minor nature"
is incidental to the assembly process.
The court then indicated that relevant factors included: (1) whether the relative cost
and time required by the operation are such that the operation may be considered
minor; (2) whether the operation is necessary to the assembly process; and (3)
whether the operation is so related to the assembly that it is logically performed during
assembly. The Court of Appeals for the Federal Circuit noted in General Motors Corp.
v. United States, 976 F.2d 716, 719 (Fed. Cir. 1992), that the Mast decision is not to be
interpreted "as announcing factors that must invariably be used to the exclusion of all
others, or that all such factors are pertinent in every case involving [subheading
9802.00.80, HTSUS]."
With regard to the relative cost and time of an operation, the trial court in
Samsonite Corp. v. United States, 702 F. Supp. 908, 911 (1988), aff'd, 889 F.2d 1074
(1989), stated that "[t]he magnitude of a particular process in terms of time and cost
does not make that process any less one of fabrication, nor does it make the result
thereof any less significant." On appeal, the court stated "[t]he critical inquiry in
determining whether fabrication rather than mere assembly took place . . ., is not the
amount of processing that occurred . . ., but its nature."
A visual inspection of the sample garment after being subjected to the pigment
wash process clearly indicates that prominent fading has occurred. In applying the
standards for permissible subheading 9802.00.80, HTSUS, operations that are
incidental to assembly, Customs finds that the pigment wash imparts the garment with a
significant new characteristic. Namely, the wash process produces a very prominent
fading and acid wash appearance. Notwithstanding your claims that no bleaching
agents, oxidants, or perborates will be used in the pigment wash process or that the
fabric is specially treated, it is clear that as a result of the pigment wash, the garment
possesses a significant new characteristic.
At our request, the Office of Laboratories and Scientific Services analyzed the
samples submitted. Our laboratory personnel concluded that the garment subjected to
the pigment wash exhibited more prominent fading than would be reasonably expected
in a conventional pigment-dyed garment. In addition, the laboratory personnel noted
that there was evidence of abrasion. We find that the nature of the pigment wash adds
a significant new characteristic to the garments and that this wash process exceeds the
scope of an operation incidental to assembly.
On the other hand, while the silk wash produces fading to the fabric, it is our
opinion that it serves chiefly as a fabric softening process. Unlike the pigment wash
which produces an inconsistent fading and streaking in the garment, the silk wash
yields a garment that is uniformly and mildly faded from the pre-wash garment and that
is slightly softer to the touch. We are satisfied that this operation is incidental to the
assembly process and does not impart a significant new characteristic to the garment.
HOLDING:
The pigment wash is clearly a significant process whose primary purpose is the
chemical improvement of the fabric that precludes the application of the subheading
9802.00.80, HTSUS, exemption to the fabric. The silk wash is a washing and fabric
softening operation which has been consistently held to be an operation incidental to
an assembly operation and will not preclude the application of the subheading
9802.00.80, HTSUS, exemption to the fabric.
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