CLA-2-58:RR:NC:TA:351 E89884
Mr. Ronald Van Dyck
Rob Imports, Inc.
c/o Galina Bouquet, Inc.
260 W. 39th Street, 14th Fl.
New York, NY 10018
RE: The tariff classification of beaded lace from Haiti
Dear Mr. Van Dyck:
This is in response to your request dated October 22, 1999, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States, (HTSUS), to beaded lace. A representative sample of the lace, both before and after beading, was submitted.
FACTS:
You state that you contract to have lace, which is made in France, beaded in Haiti and shipped to customers in the United States. The typical scenario that you presented is as follows: A company “A”, located in the US, purchases levers lace made in France and has it shipped to the United States. A manufacturer of bridal gowns located in the U.S., company “B”, buys the lace from “A” and contracts with you, Rob Imports, to have the lace shipped to Haiti where it is beaded and returned to the U.S. In all cases, the lace originates in France. For certain styles, the beads, pearls or sequins are either of U.S. origin or of foreign origin. The thread in all instances used to attach the beads, etc. to the lace is of U.S. origin. The lace fabric remains “in the piece” and is not cut into individual motifs until after its reimportation into the U.S. For items 1716, 1935 and 1800, the lace is made in France, the pearls originate from China and the thread is of U.S. origin. For item 6009, the lace is made in France, the beads are of Czech origin and the thread is of U.S. origin. For item 7007, the lace is made in France, and the sequins and the thread are of U.S. origin.
In a telephone conversation held subsequent to your request, you asked if any change in the above arrangement would change the treatment or duty status of the beaded fabric. You asked what significance there would be if you purchased the lace, instead of it being purchased by the bridal manufacturers. In our conversation and in your letter, you stated that you did not understand why duty would have to be paid twice on the French lace, (on its initial importation into the United States and then again, upon its return to the U.S. after having been beaded in Haiti).
LAW AND ANALYSIS:
Application of subheading 9802.00.80, HTSUS
Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
articles 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 of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 C.F.R. §10.24).
Section 10.14(a), Customs Regulations (19 C.F.R. §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.
Section 10.16(a), Customs Regulations (19 C.F.R. §10.16(a)), provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, lamination, sewing, or the use of fasteners.
In the case of the levers lace shipped to Haiti and beaded, solid components are joined together by sewing. The beads, sequins and or pearls are fastened to the lace by means of sewing. The beading operation will qualify for the duty exemption available under subheading 9802.00.80, HTSUS. The duty allowance will be permitted for those U.S. components, the U.S. origin sequins and the thread. The French lace and the foreign beads and pearls will not qualify for any duty allowance upon their return to the U.S.
A Drawback application for duty can be made for the lace of French origin when it is exported to Haiti. Rights for application of drawback can be transferred to another party. The definitions, procedures, documentary and record keeping requirements for this process can be found in Sections 191.31 through 191.35, Customs Regulations, (19 C.F.R. §191.31 – 191.35). Please note that this is a transaction separate from any duty allowance that can be made under subheading 9802.00.80, HTSUS. The exportation of the French lace from the United States and its subsequent return after beading in Haiti, are not correlated in any way for purposes of duty assessments. As drawback is not related to the application for duty treatment under HTSUS 9802 provisions, ownership of the lace at the time of its importation into the United States is irrelevant for purposes of duty relief.
The classification of the beaded fabric is dependent upon both its fiber content and its weight per square meter. All of the fabric is in chief weight of cotton. However, the weight of the fabric per square meter was not given. As such, both potential subheadings will be given.
The applicable subheading for the beaded fabric weighing in excess of 200 grams per square meter will be 5810.91.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for embroidery in the piece, in strips or motifs, other embroidery, of cotton, weighing over 200 g/m2. The duty rate will be 9 percent ad valorem.
The applicable subheading for the beaded fabric weighing 200 grams per square meter or less will be 5810.91.0020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for embroidery in the piece, in strips or motifs, other embroidery, of cotton, other. The duty rate will be 9 percent ad valorem.
Additional U.S. Note 1 to Chapter 58, HTSUS, states that the applicable rate of duty is not less that the rate of duty which would have applied had the fabric not been embroidered. Therefore, the applicable rate of duty, as necessitated by subheading 5804.29.1000, HTSUS, is 9 percent ad valorem.
Based upon the information supplied, the beading operation of U.S. component sequins to the lace is an acceptable assembly process. Therefore, the fabric using U.S. components of thread and sequins, may enter under subheading 9802.00.80, HTSUS, with an allowance in duty for the cost or value of the U.S. components incorporated into the fabric, upon compliance with the documentary requirements of 19 C.F.R. §10.24.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Camille Ferraro at 212-637-7086.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division