HQ 555934: Duty-free treatment of vinyl carrying bags from the Dominican Republic under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA

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 555934      

                       November 4, 1991  
CLA-2 CO:R:C:S 555934 SER

CATEGORY: Classification

Mr. Howard Greenstein
Carnivale Bag Co., Inc.
544 Park Avenue
Brooklyn, NY  11205

RE:  Duty-free treatment of vinyl carrying bags from the
     Dominican Republic under U.S. Note 2(b), subchapter II,
     Chapter 98, HTSUSA

Dear Mr. Greenstein:

     This is in reference to your letter of March 13, 1991,
requesting duty-free treatment under U.S. Note 2(b), subchapter
II, Chapter 98, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA)("Note 2(b)"), for vinyl carrying bags from the
Dominican Republic.

FACTS:

     In your submission, you referenced a letter from Customs
(555803 dated March 8, 1991), which you state encompassed
articles similar to those at issue here.  In letter 555803, the
articles at issue were ladies handbags comprised exclusively of
vinyl.  The production of the vinyl bags involved shipping rolls
of expanded vinyl and vinyl sheeting; thread; zippers; polybags;
and all other necessary accessories, all of U.S.-origin, to the
Dominican Republic where they were to be used to produce several
styles of ladies handbags.  The operations necessary to produce
the vinyl ladies handbags in the Dominican Republic involved
cutting the vinyl to shape; sewing and/or gluing the pieces of
vinyl together; and adding zippers and other accessories.

     The article at issue here is a carrying bag of the type
generally associated with use as a carry-on bag for air travel. 
These bags are stated to be virtually the samed as the vinyl
ladies handbags and consist of all vinyl materials except for a
cotton webbed shoulder strap.

ISSUE:

     Whether the vinyl carrying bags at issue are entitled to
duty-free treatment under Note 2(b) when imported into the U.S.
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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, HTSUS,
("Note 2(b)") to provide for 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   
            into 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), HTSUSA.  The
Dominican Republic is a designated BC.

     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 camera bags are included in the "textile articles"
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 (copy enclosed), we stated:
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     ... 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).

     Based on the information provided, it is our opinion that
the vinyl bags would be properly classified in subheading
4202.92.4500, HTSUSA.  Since these bags are not classified in a
provision which include a textile category number, they are
eligible for duty-free treatment under this note, assuming all
other conditions are fulfilled.

     As stated above, to qualify for duty-free treatment under
Note 2(b), an article must be assembled or processed in a BC
entirely of components or ingredients that are a "product of" the
U.S.  An article manufactured within the customs territory of the
U.S. is considered a "product of" the U.S.  You state in your
submission that all of the materials used to produce the bags are
products of the U.S.

     In regard to the operations performed in the Dominican
Republic, we believe that the cutting and assembly of the U.S.
materials are encompassed by the operations specified in Note
2(b).  See HRL 555742 dated November 5, 1990.  Therefore, if all
the components are of U.S. origin and the finished articles are
shipped directly to the U.S. without entering into the commerce
of any foreign country other than a BC, and the applicable
documentation requirements are satisfied, the vinyl bags will be
entitled to duty-free treatment under this provision.  
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HOLDING:

     On the basis of the information submitted, we conclude that
the vinyl bags, classified in subheading 4202.92.4500, HTSUSA,
and made in the Dominican Republic wholly from materials of U.S.
origin, are entitled to duty-free treatment under Note 2(b), upon
compliance with the documentation requirements set forth in
Headquarters telex 9264071 dated September 28, 1990.  

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division