Eligibility of a toddler's top assembled in Mexico for duty-free treatment under subheading 9802.00.90, HTSUS; findings and trimmings; embroidery

HQ 559780 May 19, 1997 CLA-2 RR:TC:SM 559780 CW CATEGORY: Classification TARIFF NO.: 9802.00.90 David J. Evan, Esq. Grunfeld, Deciderio, Lebowitz & Silverman LLP 245 Park Avenue New York, New York 10167-0002 RE: Eligibility of a toddler's top assembled in Mexico for duty-free treatment under subheading 9802.00.90, HTSUS; findings and trimmings; embroidery Dear Mr. Evan: This is in response to your letter of April 8, 1996, on behalf of Bentex Kiddie Corp. ("Bentex"), requesting a ruling concerning the eligibility of a toddler's top and similar garments assembled in Mexico for duty-free treatment under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS). A sample of the top has been submitted for our review. We regret the delay in responding. FACTS: Your request relates to style no. 286106 which is described as a toddler's top. The body of the garment is constructed of 60% cotton/40% polyester knit fabric and the sleeves and shoulders are constructed of 50% cotton/50% polyester knit thermal fabric. The garment features a partial frontal opening with four button closures and side seam vents measuring approximately one inch in length. The garment also features an embroidered design (a smiling tiger tossing a ball) on the left hand side of the front panel. You state that the fabric components will be wholly formed and cut in the U.S. and sent to Mexico for assembly. In Mexico, the cut fabric components will be assembled by sewing, foreign-origin buttons and a care label will be sewn onto the garment, and a logo design will be sewn onto the garment with foreign thread. The garment will then be returned to the U.S. You advise that the foreign-origin buttons, embroidery thread and care label do not exceed 25% of the value of all components. ISSUE: Whether the toddler's top produced in the manner described above is entitled to duty-free treatment under subheading 9802.00.90, HTSUS, when imported into the U.S. from Mexico. LAW AND ANALYSIS: Subheading 9802.00.90, HTSUS, provides for the duty-free treatment of: Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part (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, provided that goods classifiable in chapters 61, 62, or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein. [Emphasis added.] In view of the fact that the enactment of subheading 9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods assembled in Mexico, which previously were eligible for entry under the Special Regime Program administered under subheading 9802.00.8010, HTSUS, it is Customs view that all of the policy directives implementing this program should be considered applicable in the administration of subheading 9802.00.90, HTSUS. One such policy under the Special Regime Program included the allowance of "findings, trimmings, and certain elastic strips of foreign origin" to be incorporated into the assembled good "provided they do not exceed 25 percent of the cost of the components of the assembled product." Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, "bow buds," lace trim, zippers, including zipper tapes, and labels. See 53 FR 15726 (May 3, 1988). You advise that the only foreign components which will be used to make the toddler's top are buttons, embroidery thread and a care label. These are considered "findings and trimmings" as those terms are defined in the policy directives issued in connection with the Special Regime Program. With respect to the embroidery of the logo design on the front panel of the garment, we need not determine whether this operation constitutes an operation incidental to the assembly process since subheading 9802.00.90, HTSUS, requires only that the "fabric components, in whole or in part " (emphasis added) satisfy the three conditions identified in this provision under (a), (b), and (c). See Presidential Proclamation 6821 dated September 13, 1995 (60 FR 47663). The toddler's top consists of five fabric components, only one of which is subjected to the embroidery process. Therefore, regardless of whether or not the embroidery of the front panel of the top constitutes an operation incidental to the foreign assembly process, this operation will not preclude the garment from receiving the benefits of this tariff provision. HOLDING: Based on the information submitted, the toddler's top assembled in Mexico from fabric components wholly formed and cut in the U.S. will qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided the foreign-origin buttons, embroidery thread and care label do not exceed 25% of the cost of the components of the garment. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, John Durant Director, Tariff Classification Appeals Division