CLA-2 RR:TC:SM 559522 MLR
Thomas Caldecot Chubb, III, Esq.
Oxford Industries, Inc.
222 Piedmont Avenue, N.E.
Atlanta, Georgia 30308
RE: Applicability of subheading 9802.00.90, HTSUS, to men's suit type jackets; Special Regime; findings; trimmings; shoulder pads; sleeve headers; reinforcing tape
Dear Mr. Chubb:
This is in reference to your letter of November 9, 1995, requesting a ruling regarding the applicability of subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS), to certain men's suit-type jackets which will be assembled in Mexico. Samples of a shoulder pad, a sleeve header, and reinforcing tape were submitted with your request.
FACTS:
The articles at issue are men's suit-type jackets which will be made from a variety of fabrics. With the exception of three components, it is stated that all components incorporated into the jackets will be formed in the U.S., and to the extent applicable, cut in the U.S. It is stated that three of the components, the sleeve headers, shoulder pads, and reinforcing tape, will be of foreign origin because they meet stringent performance criteria. The sleeve header is sewn between the shell fabric and the lining fabric along the outside shoulder seam where the sleeve joins the body of the garment. The sleeve header is designed to provide fullness along the seam and enhance the appearance of the jacket at the point where the sleeve meets the shoulder. The reinforcing tape is sewn between the shell fabric and the lining fabric along the armhole seam. The purpose of the reinforcing tape is to add strength to the armhole seam. Oxford intends to use these components in the assembly of jackets in Mexico.
ISSUE:
Whether the men's suit-type jackets will qualify for the duty exemption available under subheading 9802.00.90, HTSUS, when returned to the U.S. from Mexico.
LAW AND ANALYSIS:
Appendix 2.4 of Annex 300-B of the NAFTA, provides that:
[o]n January 1, 1994, the U.S. shall eliminate customs duties on textile and apparel goods that are assembled in Mexico from fabrics wholly formed and cut in the United States and exported from and reimported into the United States under:
(a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing.
Thereafter, the U.S. shall not adopt or maintain any customs duty on textile and apparel goods of Mexico that satisfy the requirements of subparagraph (a) or (b) or the requirements of any successor provision to U.S. tariff item 9802.00.80.10.
Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:
Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part, (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 have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process; provided that goods classifiable in chapters 61, 62, or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein.
In view of the fact that the enactment of subheading 9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods assembled in Mexico, which previously were eligible for entry under the Special Regime Program administered under U.S. tariff item 9802.00.8010, HTSUS, it is Customs view that all of the policy directives implementing this program should be considered applicable in the administration of subheading 9802.00.90, HTSUS. Therefore, the men's suit-type jackets assembled in Mexico may be entered free of duty, as long as, with the exception of findings, trimmings, and elastic strips not exceeding 25 percent of the total cost of all components, all fabric components contained therein are U.S.-formed (i.e., the fabric is woven or milled in the U.S.), this fabric is cut in the U.S., and the other conditions of the statute are satisfied.
In this case, Oxford claims that the shoulder pads, sleeve headers, and reinforcing tape should be considered "findings and trimmings" as that term is used for purposes of the policy directive regarding findings and trimmings which implemented the Special Regime. First, it is claimed that these items are universally referred to in the trade as "trim" which should bear some weight in determining what is meant by the term "findings and trimmings." Secondly, it is claimed that these items are analogous to those examples cited by Customs as "findings and trimmings." Therefore, Oxford claims that the shoulder pads, sleeve headers, and reinforcing tape should be considered an exception to the requirement under subheading 9802.00.90, HTSUS, that all fabric components be wholly formed and cut in the U.S.
The Committee for the Implementation of Textile Agreements ("CITA") defines "U.S. formed and cut parts" as all fabric components, including linings and pocketings, with the exception of findings and trimmings. See 52 FR 26057 (1987). Examples of "findings and trimmings" are set forth as sewing thread, hooks and eyes, snaps, buttons, "bow buds," lace trim, zippers, including zipper tapes, and labels. See 51 FR 21208 (1986). Findings have been defined as "threads, tapes, buttons, bindings, hooks and eyes, slide fasteners, Featherbone, belting, braids, and other sewing essentials used in garment making,"and trimming is defined as "decoration or ornamental parts." See M. Picken, The Fashion Dictionary (1973). Findings have also been defined as "a term referring to supplementary fabrics employed in making a garment such as zipper tapes, lining, pocketing, and waistband." See I. Wingate, Fairchild's Dictionary of Textiles (1970).
In Headquarters Ruling Letter (HRL) 558954 dated June 30, 1995, the importer claimed that a 100 percent cotton velveteen upper collar which was woven in China and cut in the U.S. was a "trimming" for tariff classification purposes, and, therefore, should be considered "trimmings" for purposes of subheading 9802.00.90, HTSUS. In HRL 558954, it was stated that the exception for finding, trimmings, etc., under the Special Regime Program, was necessarily 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. Accordingly, noting that examples of findings and trimmings are indicative of the types of components which may be considered exceptions to the requirement that all fabric components be formed and cut in the U.S., Customs held that the cotton velveteen collar was not a "finding" or a "trimming," and, therefore, since it was a fabric component not wholly formed and cut in the U.S., the jacket to which it was assembled was not eligible for duty-free treatment under subheading 9802.00.90, HTSUS.
In this case, based upon HRL 558954 and the definitions and examples cited by CITA, it is our opinion that the shoulder pads and sleeve headers are not "findings or trimmings." While the shoulder pads and sleeve headers add fullness to the jacket and, therefore, could be considered ornamental, they are more analogous to a lining or pocketing. According to one of the definitions above, "findings" include supplementary fabrics, lining, and pocketing; however, CITA has specifically excluded linings and pocketings from consideration as findings by requiring them to be U.S. formed and cut.
Therefore, jackets made with foreign shoulder pads and sleeve headers will be excluded from subheading 9802.00.90, HTSUS, treatment. In regard to the reinforcing tape which purpose is to add strength to the armhole seam, we are of the opinion that it may be considered a finding, as it is analogous to zipper tape, and is more of a necessity in constructing the garment such as the use of buttons, hooks, etc. Therefore, jackets made with foreign reinforcing tape may qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided the reinforcing tape and other acceptable findings and trimmings do not exceed 25 percent of the total cost of all of the jacket's components, all of the fabric components are U.S.-formed (i.e., the fabric is woven or milled in the U.S.), and cut, and the other conditions of the statute are satisfied.
HOLDING:
Based upon the information provided, it is our opinion that the shoulder pads and sleeve headers are not findings or trimmings. Therefore, jackets made with foreign shoulder pads and sleeve headers will be excluded from subheading 9802.00.90, HTSUS, treatment. However, it is our opinion that reinforcing tape may be considered a finding, so that jackets made with foreign reinforcing tape may qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided the reinforcing tape and other acceptable findings and trimmings do not exceed 25 percent of the total cost of all of the jacket's components, all of the fabric components are U.S.-formed (i.e., the fabric is woven or milled in the U.S.), and cut, and the other conditions of the statute are satisfied.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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
Tariff Classification Appeals Division