United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0545133 - HQ 0556194 > HQ 0555760

Previous Ruling Next Ruling

HQ 555760

November 16, 1990

CLA-2 CO:R:C:V 555760 KCC


TARIFF NO.: 9802.00.50

Mr. Bruce Schiller
Joseph & Schiller Inc.
8725 N.W. 18th Terrace
Suite 301
Miami, Florida 33172

RE: Tariff treatment and country of origin marking requirements applicable to embroidered t-shirts.Alteration; 078245; 555021; 555249; 554371; country of origin; marking; 19 CFR 12.130(c)

Dear Mr. Schiller:

This is in response to your letter dated September 26, 1990, on behalf of Chichi Castenango, requesting a ruling concerning the applicability of subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), to embroidered t-shirts. Samples of the t-shirt before and after the embroidery operation were submitted for examination.


Chichi Castenango will purchase U.S. manufactured blank 100% cotton t-shirts and ship them to Guatemala. In Guatemala, a design will be embroidered on the front of the t-shirt, after which the t-shirt will be returned to the U.S.

Chichi Castenango proposes to label the embroidered t-shirt "Made in U.S.A., Embroidered in Guatemala." Chichi Castenango's estimated costs of the operation are as follows:

1. the basic cost of the U.S. manufactured t-shirt is $2.37;
2. the cost of the operation in Guatemala, including profit and overhead, is $2.00; and
3. the cost of shipping the blank t-shirt to Guatemala is $0.30 per t-shirt.


I. Whether the embroidered t-shirt will be eligible for the partial duty exemption available under subheading 9802.00.50, HTSUS, when imported into the U.S.

II. Whether country of origin marking requirements of 19 U.S.C. 1304 are applicable to the imported embroidered t- shirts.


I. Applicability of subheading 9802.00.50, HTSUS

Subheading 9802.00.50, HTSUS, provides for the assessment of duty on the value of repairs or alterations performed on articles returned to the U.S. after having been exported for that purpose. However, the application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See, A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff'd, C.D. 1752, 36 Cust.Ct. 46 (1956); Guardian Industries Corporation v. United States, 3 CIT 9 (1982), Slip Op. 82-4 (Jan. 5, 1982). Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. Dolliff & Company, Inc. v. United States, 81 Cust.Ct. 1, C.D. 4755, 455 F.Supp. 618 (1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).

We have previously held in Headquarters Ruling Letter (HRL) 078245 dated June 17, 1986, that embroidery of U.S. manufactured cotton sheets in China does not constitute a repair or alteration under item 806.20, Tariff Schedules of the United States (TSUS) (the precursor provision to subheading 9802.00.50, HTSUS). We have also found that U.S. articles subjected to silk screening, hand-painting, and painting operations abroad and then returned to the U.S., were not eligible for subheading 9802.00.50, HTSUS, treatment because these operations are more than an alteration. We stated that the silk screening, hand-painting and painting operations created a different article of commerce and constituted a finishing step in the manufacture of the U.S. articles. See, HRL 555021 dated July 1, 1988 (silk screening of U.S. socks is not considered an alteration pursuant to this tariff provision); HRL 555249 dated June 16, 1989 (silk screening and chenilling designs on sweatshirts abroad exceeds an alteration); and HRL 554371 dated December 10, 1986 (hand- painting a design onto sweatshirts abroad exceeds an alteration).

With regard to the facts you have provided and based on our previous rulings, we are of the opinion that the foreign embroidery operation constitutes an operation that exceeds an alteration. Although garments may be worn whether a design is embroidered or not, embroidery like printing, silk screening and hand-painting, is considered neither a repair nor an alteration under the provisions of subheading 9802.00.50, HTSUS. T-shirts which have the design, as a result of the embroidery operation, are different from the blank t-shirts without such a design, and, as such, the foreign embroidery operation has created a different article with unique, specialized appeal. Furthermore, the embroidery operation constitutes a finishing step in the manufacture of embroidered t-shirts.

II. Applicability of country of origin marking requirements

Regarding country of origin marking requirements, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Section 12.130, Customs Regulations (19 CFR 12.130), provides country of origin requirements for textiles and textile products. According to 19 CFR 12.130(c):

Chapter 98, Subchapter II, Note 2, HTSUS, provides that 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 purposes of the Tariff Act of 1930, as amended ... merchandise which falls within the purview of Note 2 may not, upon its return to the U.S. be considered a product of the U.S.

We have previously held in HRL 078245 that U.S. manufactured cotton sheets sent to China for an embroidery operation are not considered products of the U.S. pursuant to 19 CFR 12.130(c), as they were advanced in value and improved in condition by the foreign operation. The sheets are considered to be a product of China and, therefore, are to be marked "Made in ..." or "Product of China, U.S.A. fabric."

In the present case, the U.S. manufactured t-shirt will be advanced in value and improved in condition by the foreign embroidery operation. The value of the t-shirt will nearly double with the addition of the embroidered design. Therefore, the embroidered t-shirt is not considered a product of the U.S. We have also considered your request to mark the t-shirt "Made in the U.S.A., Embroidered in Guatemala". It is our view that marking the t-shirt in such a manner is unacceptable because it does not clearly indicate that the country of origin is Guatemala. A label such as "Made in Guatemala, U.S.A. fabric" or "Product of Guatemala, U.S.A. fabric" would be acceptable for purposes of 19 U.S.C. 1304. The original "Tough Tee Belton" t- shirt label stating that the t-shirt is "Made in the U.S.A." must be removed, as it is an inappropriate label and would be misleading when combined with the above described marking requirements.


On the basis of the information and samples submitted, it is our opinion that the foreign embroidery operation may not be considered an alteration, and, therefore, tariff treatment of the returned goods under subheading 9802.00.50, HTSUS, is precluded. Accordingly, the embroidered t-shirts will be dutiable on their full value under the appropriate tariff provision.

The embroidery operation performed abroad to the U.S. manufactured t-shirt advances it in value and improves it in condition. Therefore, upon reimportation, the embroidered t- shirt is considered a product of Guatemala pursuant to 19 CFR 12.130(c), and must be marked accordingly.


John Durant, Director

Previous Ruling Next Ruling

See also: