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 0555937

Previous Ruling Next Ruling

HQ 555937

May 2, 1991

CLA-2 CO:R:C:S 555937 KCC


TARIFF NO.: 6204.62.4020; 9802.00.80

Mr. Paul C. Gentzke
John V. Carr & Son, Inc.
Fourth Floor
560 Delaware Avenue
Buffalo, New York 14202

RE: Women's 100% cotton trousers created by sewing U.S. components together. Classification; U.S.-Canada FTA; goods originating in Canada; assembly; incidental operations; over-edge stitch; Mast; L'Eggs; 555525; 555542; 555734

Dear Mr. Gentzke:

This is in response to your letter of February 5, 1991, to the District Director, Buffalo, New York, on behalf of Gustin- Kramer Limited, requesting a ruling on the tariff classification of, and applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) to, women's 100% cotton trousers to be imported from Canada. Samples of the trousers, before and after assembly, were submitted. Your letter and samples were forwarded to this office for a reply.


U.S.-origin 100% cotton woven fabric will be cut into pattern pieces in the U.S. and shipped to Canada, along with all necessary notions, also of U.S.-origin, where they will be assembled into women's trousers.

Upon completion of the assembly, the trousers will be pressed, folded, packaged and then returned to the U.S.


I. How are the women's 100% cotton trousers classified under the HTSUS?

II. Whether the women's trousers are eligible for preferential treatment under the United States-Canada Free Trade Agreement

III. Whether the women's trousers will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when imported into the U.S.


I. Tariff Classification

Classification of products under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined according to the terms of the headings and any relevant section or chapter notes.

Women's 100% cotton woven trousers are classified in subheading 6204.62.4020, HTSUS, which provides for women's or girls' suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear); of cotton: other: other; trousers and breeches: women's: other, dutiable at the rate of 17.7% ad valorem, provided that they are not eligible for special tariff treatment under the FTA. The textile category number is 348.

II. Eligibility for Preferential Treatment under the FTA

Articles which meet the definition of "goods originating in the territory of Canada" are subject to reduced rates of duty under the FTA, provided they are classified under a tariff provision which contains the symbol "CA," representing the FTA, in the "Special" subcolumn. See, General Note 3(c)(vii)(A), HTSUS.

General Note 3(c)(vii)(B), HTSUS, defines "goods originating in the territory of Canada" for purposes of determining FTA eligibility. This note states, in relevant part, that articles are considered to be "originating goods" for FTA purposes if they are wholly obtained or produced in Canada and/or the U.S.

The women's trousers at issue will be assembled in Canada entirely from U.S.-origin materials and, therefore, are considered "goods originating in the territory of Canada." The women's trousers are classified under subheading 6204.62.4020, HTSUS, which is an eligible FTA provision, and, therefore, the articles are dutiable at the FTA rate of 12.3% ad valorem.

III. Applicability of subheading 9802.00.80, HTSUS

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 value of the imported assembled article, less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners.

Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See, 19 CFR 10.16(c).

In United States v. Mast Industries, Inc., 515 F.Supp. 43, 1 CIT 188 (1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981), the court, in examining the legislative history of the meaning of "incidental to the assembly process," stated that:

[t]he apparent legislative intent was to not preclude operations that provide an "independent utility" or that are not essential to the assembly process; rather, Congress intended a balancing of all relevant factors to ascertain whether an operation of a "minor nature" is incidental to the assembly process.

The court then indicated that relevant factors included:

(1) whether the relative cost and time required by the operation are such that the operation may be considered minor;
(2) whether the operation is necessary to the assembly process;
(3) whether the operation is so related to the assembly that it is logically performed during assembly; and (4) whether economic or other practical considerations dictate that the operation be performed concurrently with assembly.

We are satisfied from the documentation and samples submitted that the U.S. components meet the requirements of subheading 9802.00.80, HTSUS, and, therefore, are entitled to the duty allowance available under this tariff provision. The foreign operations that entail sewing fabric onto itself using any type of stitch, including the tucking, shirring, pleating, and hemming will be considered acceptable assembly operations. See, L'Eggs Products, Inc. v. United States, Slip Op. 89-5, 13 CIT , 704 F.Supp. 1127 (CIT 1989). Attaching two pieces of fabric together by sewing, and sewing the elastic and labels into the waist band are considered acceptable assembly operations pursuant to 19 CFR 10.16(a).

Sewing the over-edge stitch onto the edge of the fabric at the end of the trousers legs is not an acceptable assembly operation. The thread used in sewing the over-edge stitch onto the edge of single ply fabric does not serve as a binding agent, but is merely used to prevent the unraveling of the fabric. See, L'Eggs, Slip Op. 89-5 (CIT 1989). However, upon reviewing the Mast criteria and prior rulings, we find that sewing the over- edge stitch is an operation incidental to the assembly process. Although the over-edge stitch may not be necessary to the assembly process, we believe it is sufficiently related to the assembly that it is logically performed concurrently with assembly. See, Headquarters Ruling Letter (HRL) 555525 dated June 6, 1990, HRL 555542 dated June 8, 1990, and HRL 555734 dated March 15, 1991. Therefore, sewing the over-edge stitch will not preclude an allowance for the cost or value of the fabric under HTSUS subheading 9802.00.80.

Pressing and folding the trousers are also considered operations incidental to the assembly pursuant to 19 CFR 10.16(b)(7). Additionally, pursuant 19 CFR 10.16(f), packaging the trousers will not preclude treatment under subheading 9802.00.80, HTSUS.


On the basis of the information and samples presented, it is our opinion that the operations performed abroad to create the women's 100% cotton trousers are considered proper assembly operations or operations incidental to the assembly process. Therefore, the women's trousers may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components incorporated therein upon compliance with the documentary requirements of 19 CFR 10.24.

The women's trousers are classifiable in subheading 6204.62.4020, HTSUS, and, based on the information provided, would be dutiable at the rate of 12.3% ad valorem as "goods originating in the territory of Canada" under the FTA, provided the requirements of 19 CFR 10.301 through 10.309 are met.


John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: