HQ 555814: Applicability of duty exemption under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA, to gloves assembled in Guatemala; 555886

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                         HQ 555814

                       October 7, 1991    
CLA-2 CO:R:C:S 555814 SER

CATEGORY: Classification

Mr. William R. Irmscher
Best Manufacturing Company
Edison Street
Menlo, GA  30731

RE:  Applicability of duty exemption under U.S. Note 2(b),
     subchapter II, Chapter 98, HTSUSA, to gloves assembled in
     Guatemala; 555886

Dear Mr. Irmscher:

     This is in reference to your letter of December 12, 1990,
requesting a ruling on the eligibility for duty-free treatment
under U.S. Note 2(b), subchapter II, Chapter 98 of the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA), of
gloves produced in Guatemala.  We regret the delay in responding.

FACTS:

     Four types of work gloves, all made exclusively of U.S.-
origin materials, undergo initial manufacturing operations in the
U.S. before being shipped to Guatemala where they undergo final
assembly operations to complete the gloves.  

     The types of work gloves are categorized as follows: woven
cotton, knit cotton, coated knit, and coated woven.  Each type
comes in several different styles.  The woven cotton gloves
consist of 65% cotton and 35% polyester.  The knit cotton gloves
are made from napped jersey fabric, while the coated woven gloves
are constructed from PVC coated fabric of which the coating
comprises more than 50% by weight.  The coated knit gloves are
constructed either from nitrile rubber coated fabric or PVC
coated fabric.  The coating operation and the cutting of the
fabric to shape are performed in the U.S., and the assembly of
the components to create the completed gloves is performed in
Guatemala.

ISSUE:

     Whether the work gloves are entitled to duty-free treatment 
under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA, when
imported into the U.S.
n                              -2-


LAW AND ANALYSIS:

     Section 222 of the Customs and Trade Act of 1990 (P.L. 101-
382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUSA,
("Note 2(b)") to provide for the duty-free treatment of articles,
other than certain specified products, which are assembled or
processed in a Caribbean Basin Initiative beneficiary country
(BC) wholly of fabricated components or ingredients (except
water) of U.S. origin.  This amendment was effective with respect
to goods entered on or after October 1, 1990.

     Specifically, Note 2(b) provides as follows:

     (b) No article (except a textile article, apparel article,
     or petroleum, or any product derived from petroleum,
     provided for in heading 2709 or 2710) may be treated as a
     foreign article, or as subject to duty, if-

       (i) the article is--

          (A) assembled or processed in whole of fabricated
          components that are a product of the United
          States, or

          (B) processed in whole of ingredients (other than
          water) that are a product of the United
          States, in a beneficiary country; and 

       (ii) neither the fabricated components, materials or      
            ingredients, after exportation from the United       
            States, nor the article itself, before importation   
            in the United States, enters the commerce of any     
            foreign country other than a beneficiary country.

     As used in this paragraph, the term "beneficiary country"
means a country listed in General Note 3(c)(v)(A), HTSUS. 
Guatemala is a designated BC under the General Note.

     As stated above, Note 2(b) specifies four categories of
products which are excluded from duty-free treatment under this
provision: textile articles; apparel articles; petroleum; and
certain petroleum products.  The issue presented here concerns
whether the work gloves are included in the "textile and apparel
article" exclusion for purposes of Note 2(b) and, therefore,
precluded from receiving duty-free treatment under this
provision.  In a letter dated August 28, 1991 (555886) to the
Office of Textiles and Apparel, International Trade
Administration, U.S. Department of Commerce, we stated:
n                              -3-

     
     ... as a general rule, we believe that those articles
     (other than footwear and parts of footwear) classified
     in HTSUS provisions which include a textile category
     number should be considered "textile and apparel
     articles" for purposes of U.S. Note 2(b) and,
     therefore, precluded from receiving duty-free treatment
     under this provision.  Conversely, those articles
     (except petroleum and certain petroleum products)
     classified in tariff provisions not containing a
     textile category number should be entitled to such
     treatment, assuming compliance with the requirements of
     U.S. Note 2(b).

     Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI's), taken in order.  GRI 1
provides that classification shall be determined according to the
terms of the headings and any relative section or chapter notes. 
Headings 6116 and 6216, HTSUSA, provide for gloves, mittens and
mitts.  The woven cotton gloves (styles W70665 and PK1) are
properly classified in subheading 6216.00.3910, HTSUSA, with a
rate of duty of 25% ad valorem, and are subject to textile
category number 331.  The knit cotton gloves (styles 9K5 and
6616) are properly classified in subheading 6116.92.6020, HTSUSA,
with a rate of duty of 25% ad valorem, and are also subject to
textile category number 331.  The coated woven gloves (styles
460-09, 60-09 and B60-09) are properly classified in subheading
6216.00.1210, HTSUSA, with a rate of duty of 25% ad valorem.  The
coated knit gloves (styles 2735-09 and P2735-09, 760-09, 770-09,
and P770-09) are properly classified in subheading 6116.10.1810,
HTSUSA, with a rate of duty of 25% ad valorem.

     Since the woven and knit cotton gloves are classified in
tariff provisions which contain textile category numbers they are
not eligible for duty-free treatment under Note 2(b).  The coated
woven and knit gloves are classified in provisions which do not
include textile category numbers and, therefore, they are
eligible for duty-free treatment under this note, assuming all
other conditions are fulfilled.

     Though a detailed description of the assembly operations to
be performed in Guatemala was not provided, it would appear that
the final assembly operations would primarily involve sewing the
cut-to-shape fabrics together to form the final article.  This
type of assembly operation is encompassed by the operations
specified in Note 2(b)(i).

     Therefore, the coated woven and knit work gloves are
entitled to duty-free treatment under Note 2(b), provided they
are shipped directly to the U.S. without entering into the
commerce of any foreign country other than a BC, and then
                               -4-
 


applicable documentation requirements are satisfied.  We have
enclosed a copy of a telex to Customs field offices dated
September 28, 1990, which outlines these requirements.

HOLDING:

     On the basis of the information submitted, the coated woven
and knit work gloves, classified in subheadings 6216.00.1210 and
6116.10.1810, HTSUSA, respectively, which are assembled into
final articles in Guatemala wholly from U.S.-origin materials,
are entitled to duty-free treatment under Note 2(b), upon
compliance with the "direct shipment" and applicable
documentation requirements.  The woven and knit cotton gloves,
classified in subheadings 6216.00.3910 and 6116.92.6020, HTSUSA,
respectively, and subject to textile agreements, are ineligible
for duty-free treatment under Note 2(b).  The rate of duty
applicable to the woven and knit cotton work gloves is 25% ad
valorem, and these gloves are subject to textile category number
331.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division