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HQ 085906

March 1, 1990

CLA-2:CO:R:C:G 085906 SR


TARIFF NO.: 6505.90.2060

Mr. Lewis Lau
100 Dolomite Drive
Downsview, Ontario
Canada M3J 2N3

RE: Reconsideration of HRL 084534; embroidered caps

Dear Mr. Lau:

This is in reference to your letter dated October 24, 1989, requesting reconsideration of Headquarters Ruling Letter (HRL) 084534, dated August 24, 1989.


The merchandise at issue is baseball caps that are imported into Canada, where they are embroidered before being imported into the United States. HRL 084534, classified these hats under subheading 6505.90.2060, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as hats and other headwear. This ruling was based on General Note 3(c)(vii)(R)(12) and subdivisions (c)(vii)(G)and (H), of the United States-Canada Free-Trade Agreement Implementation Act of 1988 (FTA). The importer states the caps are unfinished as they enter Canada because most people wear hats with logos.


Whether the caps at issue qualify as Canadian goods under the FTA.


The caps at issue are classifiable under subheading 6505.90.2060, HTSUSA, as hats and other headgear, whether or not the embroidery has been added.

General Note 3(c)(vii)(B), of the FTA states:

(B) for the purposes of subdivision (c)(vii) of this note, goods imported into the customs territory of the United States are eligible for treatment as goods originating in the territory of Canada" only if--

(1) they are goods wholly obtained or produced in the territory of Canada and/or the United States, or

(2) they have been transformed in the territory of Canada and/or the United States, so as to be subject--

(I) to a change in tariff classification in Canada as described in the rules of subdivision
(c)(vii)(R) of this note, or

(II) to such other requirements subdivision (c)(vii)(R) of this note may provide when no change in tariff classification occurs, and they meet the other conditions set out in and (R) of this note.

The requirements for goods classifiable under Chapter 65, of the HTSUSA, provided for in subdivision (c)(vii)(R)(12), include a change in classification from one chapter to another, or several specific changes that are designated within chapter 65. Because no change in classification occurs due to the addition of the embroidery to the caps, they do not qualify for special rates of duty under the FTA.

The baseball caps at issue are completed articles when they are imported into Canada. They are neither unassembled nor dissembled goods. Therefore, subdivisions (c)(vii)(G) and (H) are not applicable to this merchandise; and the value content test does not apply.


The caps at issue are classifiable under subheading 6505.90.2060, HTSUSA, which provides for hats and other headgear, knitted or crocheted, or made up from lace, felt or other textile fabric, in the piece (but not strips), whether or not lined or trimmed; other, of cotton, flax or both, not knitted, headwear of cotton, other. The textile category is 359, and the rate of duty is 8 percent ad valorem.

The language in HRL 084534, that discusses whether embroidery is considered to be assembly is irrelevant and should therefore be revoked. HRL 084534, dated August 24, 1989, is hereby modified accordingly.


John Durant, Director

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