Eligibility for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, of pressure sensitive tape manufactured in a Caribbean country from U.S. materials

HQ 555809 January 8, 1991 CLA-2 CO:R:C:S 555809 KCC CATEGORY: Classification Mr. Howard Shuman Avon Tape, Inc. 46 N. Montello St. P.O. Box 1423 Brockton, Maine 02403 RE: Eligibility for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, of pressure sensitive tape manufactured in a Caribbean country from U.S. materials Dear Mr. Shuman: This is in response to your letter dated December 3, 1990, requesting a ruling concerning the applicability of section 222 of the Customs and Trade Act of 1990 (Public Law 101-382), which amended U.S. Note 2, subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States (HTSUS), to pressure sensitive tape to be imported from a Caribbean Basin country. FACTS: You intend to ship woven tape and pressure adhesive of U.S. origin to one of the countries in the Caribbean Basin area for manufacture into pressure sensitive tape. This operation may also involve cutting the tape to narrower widths using cutting equipment shipped to that country. Upon competition of the manufacturing operation, the pressure sensitive tape will be returned to the U.S. ISSUE: Whether the pressure sensitive tape will be entitled to duty-free treatment pursuant to U.S. Note 2(b), subchapter II, Chapter 98, HTSUS, when returned to the U.S. LAW AND ANALYSIS: U.S. Note 2(b), subchapter II, Chapter 98, HTSUS ("Note 2(b)"), provides for the duty-free treatment of articles (other than textile and apparel articles and petroleum and petroleum products) which are assembled or processed in a Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2701-2706) 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. To qualify for duty-free treatment under this provision, the manufacture of the pressure sensitive tape must take place in one of the CBERA designated BC's. The list of the CBERA designated BC's is found in General Note 3(c)(v)(A), HTSUS, copy enclosed. We are of the opinion that the pressure sensitive tape, if produced in a CBERA BC, may enter the U.S. duty-free pursuant to Note 2(b). Only U.S. origin components or ingredients are used during the foreign manufacturing operation, which involves coating the woven tape with pressure adhesive and, possibly, cutting the tape to narrower widths using cutting equipment shipped to the CBERA country. We believe that these processes are encompassed by the operations specified in Note 2(b). See, Headquarters Ruling Letters (HRL) 555742 dated November 5, 1990, and HRL 555656 dated December 24, 1990. Enclosed is a copy of Headquarters telex 9264071 dated September 28, 1990, to Customs field offices, setting forth procedures for the entry of articles under Note 2(b). HOLDING: The pressure sensitive tape which is entirely manufactured from U.S. materials in a CBERA BC may enter the U.S. duty-free pursuant to Note 2(b) provided the documentation requirements set forth in the attached telex dated September 28, 1990, are satisfied. Sincerely, John Durant, Director Commercial Rulings Division Enclosures