us-cbp-cross-rulings-hq-555102•HQ 555102: Applicability of partial duty exemption under TSUS item 807.00, as well as visa, quota and country of origin marking requirements, to certain sweat shirts imported from Jamaica.
HQ 555102: Applicability of partial duty exemption under TSUS item 807.00, as well as visa, quota and country of origin marking requirements, to certain sweat shirts imported from Jamaica.
us-cbp-cross-rulings-hq-555102HQ 555102: Applicability of partial duty exemption under TSUS item 807.00, as well as visa, quota and country of origin marking requirements, to certain sweat shirts imported from Jamaica.Guidance
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 555102
November 23, 1988
CLA-2 CO:R:C:V 555102 GRV
CATEGORY: CLASSIFICATION
TARIFF NO: 9802.00.80; 807.00
Ms. Sharon Morgenstern
The Porcelain Horse
13065 New Providence Road
Alpharetta, Georgia 30201
RE: Applicability of partial duty exemption under TSUS item
807.00, as well as visa, quota and country of origin
marking requirements, to certain sweat shirts imported
from Jamaica.
Dear Ms. Morgenstern:
This ruling letter is in reply to your undated letter--
received in this office on August 11, 1988--concerning:
(1) the applicability of item 807.00, Tariff Schedules
of the United States (TSUS), to certain sweat shirts
to be exported to Jamaica for applique operations;
(2) the country of origin marking requirements applicable
to the returned sweat shirts; and
(3) whether the sweat shirts are subject to quota
and visa restrictions.
Samples of both the pre-appliqued (for export to Jamaica) and
the post-appliqued (for import into the U.S.) sweat shirts were
submitted for examination.
FACTS:
Each of the submitted samples consists of a basic white
sweat shirt, presumably of U.S. origin, and three distinguish-
able pieces of cloth material of varying size and shape, also
presumably of U.S. origin, affixed to the sweat shirts. On the
pre-appliqued shirt, the three attachments are provisionally
attached to the white sweat shirt by a glue-like substance,
presumably to fix their proper ornamental location until the
applique-process comtemplated in Jamaica more permanently fixes
them to the sweat shirts. On the post-appliqued shirt, the
three attachments are more securely attached to the white sweat
shirt by a sewing operation.
ISSUES:
I. Whether the applique operation, as presently contemplated,
constitutes an "assembly," thereby entitling the sweat shirts
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to partial duty exemption under TSUS item 807.00 (subheading
9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS)) when returned to the U.S.
II. Whether the returned sweat shirts must be marked for coun-
try of origin purposes as a product of Jamaica.
III. Whether the textile articles (sweat shirts) are subject
to quota/visa restrictions upon their importation into the U.S.
LAW & ANALYSIS:
I. "ASSEMBLY ABROAD"
TSUS item 807.00 (19 U.S.C. 1202) 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 with-
out further fabrication, (b) have not lost their physi-
cal 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 assem-
bled and except by operations incidental to the assembly
process such as cleaning, lubricating, and painting.
Under this tariff provision, there is a duty upon the full val-
ue of the imported assembled article less the cost or value of
such U.S. components, provided the documentation requirements
of section 10.24, Customs Regulations (19 CFR 10.24), are met.
Of importance to the sample sweatshirts submitted is the
term "assembled." Section 10.16(a), Customs Regulations (19
CFR 10.16(a)), provides that:
The assembly operations performed abroad may consist
of any method used to join or fit together solid
components, such as welding, soldering, riveting,
force fitting, gluing, laminating, sewing, or the
use of fasteners.... (Emphasis added).
Court decisions construing the term "assembly" have uniform-
ly held that the term "assembly," for purposes of TSUS item
807.00, involves the joining or coming together of solids. See,
for example, Sigma Instruments, Inc. v. United States, 565 F.
Supp. 1036, 5 CIT 90 (1983), aff'd 724 F.2d 930, (Fed. Cir.
1983). Implicit in this construction of the term "assembly" is
that the solid components are physically separate or apart
prior to their subsequent joining or coming together.
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The problem presented by the pre-appliqued sweat shirt sam-
ple is that the three attachments to be appliqued in Jamaica
are already effectively joined to the sweat shirt by a glue-
like substance. Therefore, it is clear that the applique
operation performed abroad does not consist of the joining or
fitting together of separate components and compels a determin-
ation that the post-appliqued sweat shirts would not be enti-
tled to classification in TSUS item 807.00. However, it ap-
pears that if the three attachments are exported in a physi-
cally separate state from the sweat shirts, (i.e., the three
attachments are in no way effectively joined to the sweat
shirts at the time of exportation and are subsequently attached
to the sweat shirts abroad by sewing), then the imported sweat
shirts would be entitled to classification in TSUS item 807.00.
II. COUNTRY OF ORIGIN MARKING REQUIREMENTS
With respect to the issue of country of origin marking re-
quirements, the sweat shirts constitute textile articles and,
as such, are subject to section 204 of the Agricultural Act of
1956, as amended (7 U.S.C. 1854), and section 12.130(c), Cus-
toms Regulations (19 CFR 12.130(c)). The latter section pro-
vides that, pursuant to headnote 2, part 1, Schedule 8, TSUS:
...any product of the U.S. which is returned after having
been advanced in value or improved in condition abroad,
or assembled abroad, shall be a foreign article for
the purposes of the Tariff Act of 1930, as amended.
As the applique process in this case will advance the sweat
shirts in value, the country of origin of the returned sweat
shirts will be considered to be Jamaica. Therefore, the shirts
must be marked accordingly. We should note that section 10.22,
Customs Regulations (19 CFR 10.22), provides that, for country
of origin marking purposes, if an imported assembled article is
made entirely of American-made materials and is entitled to
entry under TSUS item 807.00, the article may be marked by
using a legend such as "Assembled in ----- from material of
U.S. origin," or a similar phrase.
III. QUOTA/VISA RESTRICTIONS
The returned sweat shirts, processed in Jamaica in the
manner described in your letter, will be subject to all
applicable visa and quota requirements as products of Jamaica.
However, please be advised that pursuant to the 807(a)
"Special Access Program," textile products assembled in
participating Caribbean Basin beneficiary countries (including
Jamaica) from fabric formed and cut in the U.S. are assured
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access to the U.S. market under guaranteed access levels
separate from quotas applicable to textile products not
assembled solely from U.S. formed and cut fabric. To qualify
for 807(a) treatment, assembled textile products must satisfy
all requirements for classification in TSUS item 807.00. A copy
of Customs Directive No. 3500-12, which details the procedures
to be followed under this Special Access Program, is enclosed
for your information.
HOLDING:
The applique operation in Jamaica, as presently contemplat-
ed, does not qualify the returned textile articles for the par-
tial duty exemption in TSUS item 807.00, because the articles
are already effectively "assembled" prior to their exportation
to Jamaica. However, if the sweat shirts are modified in ac-
cordance with this ruling, prior to their export to Jamaica,
then the sweat shirts will be "assembled," within the meaning
of the regulation, and qualify, upon their return to the U.S.
and compliance with the documentary requirements, for partial
duty exemption under TSUS item 807.00.
The returned sweat shirts will be considered products of
Jamaica for country of origin marking purposes and must be
marked accordingly. As products of Jamaica, the returned sweat
shirts will be subject to all applicable visa and quota re-
quirements.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosure
cc: CLA-2 CO:R:C:V:GRV:MM:FNL 10/6/88
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