Classification and applicability of partial duty exemption under subheadings 9802.00.50 and 9802.00.80 HTSUS to women’s swimwear and swimwear pieces exported for beading and embroidery and returned; alteration; assembly

NY K82833 February 26, 2004 CLA-2-98:RR:NC:WA:355 K82833 CATEGORY: Classification TARIFF NO.: 9802.00.50; 9802.00.80 Mr. Jeff Jung Point Conception, Inc. 23121 Arroyo Vista, Suite A Rancho Santa Margarita, CA 92688 RE: Classification and applicability of partial duty exemption under subheadings 9802.00.50 and 9802.00.80 HTSUS to women’s swimwear and swimwear pieces exported for beading and embroidery and returned; alteration; assembly Dear Mr. Jung: In your letter dated January 20, 2004, you requested a ruling on the classification and duty treatment of swimwear, partially assembled swimwear and swimwear parts that are cut in the United States; partially assembled in the United States; sent to Brazil for beading or beading and embroidery; and returned to the United States for completion and sale. Three items were presented and different manufacturing scenarios were described for each item. They each represent a part or portion of a woman’s two piece bikini styled swimsuit. In all instances, the fabric for the clothing or clothing parts is formed in Italy. The fabric, made of 80 percent nylon and 20 percent spandex fiber, is cut into component pieces in the United States. The beading and embroidery threads are of U.S. origin, as are any other findings or trimmings. The first item, identified as B1, is a panel section of a bikini bottom. It is the cut component without any further processing . It is then shipped to Brazil where beads and other plastic decorative trim are attached both by gluing and by sewing (the beads). The part is then returned to the United States. The second item, identified as item TH5, is a partially assembled bikini top. The inner seams of the cups need to be joined and the cups need to be attached to each other to complete the top. In Brazil, some beads are glued to the fabric and some beads are sewn to the fabric to form a design along the bottom of the garment. The garment is returned to the United States in its unfinished condition after the beading is accomplished. The last item, identified as item B95, is a completed skirted swimwear bottom. In its completed, unadorned condition, it is shipped to Brazil. In Brazil a flower design is beaded, embroidered and glued onto the left front of the skirt. The bottom is then returned to the United States for distribution and sale. The embroidery is done by hand and is directly applied to a single layer of fabric. The applicable subheading for item B1 is 6117.90.9090, Harmonized Tariff Schedule of the United States (HTS), which provides for Other made up clothing accessories, knitted or crocheted; knitted or crocheted parts of garments or of clothing accessories: Parts: Other: Other: Of man-made fibers. The general rate of duty is 14.6 percent ad valorem. The applicable subheading for items TH5 and B95 is 6112.41.0010, HTSUS, which provides for Track suits, ski-suits and swimwear, knitted or crocheted: Women’s or girls’ swimwear: Of synthetic fibers: Of fabric containing by weight 5 percent or more elastomeric yarn or rubber thread: Women’s. The general rate of duty is 24.9 percent ad valorem. Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:[a]rticles 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 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, such as cleaning, lubricating and painting.All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).Section 10.14(a), Customs Regulations {19 CFR 10.14(a)}, states in part that:[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components. In the case of items B1 and TH5, the items are ready for assembly without further fabrication prior to being sent to Brazil for the beading and gluing processes. Both of these processes are acceptable under the provisions of subheading 9802.00.80. The goods could qualify for a partial duty exemption, provided that all documentary requirements are met at the time of importation (return from Brazil) to the United States. Item B95 is not only beaded but also subjected to an embroidery process in Brazil. In a telephone conversation, you stated that the embroidery is done on a single layer of fabric; there is no pellon or other material to serve as a backing. This embroidery has been held to be outside the purview of subheading 9802.00.80 as an acceptable assembly process; no assembly is performed. Further, the embroidery is not considered a process “incidental to the assembly”. Item B95 is not eligible for a partial duty exemption under subheading 9802.00.80. Item B95 falls within textile category designation 659. Based upon international textile trade agreements products of Brazil are subject to quota and the requirement of a visa. The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.gov. In addition, the designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected and should also be verified at the time of shipment. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Camille R. Ferraro at 646-733-3046. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division