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HQ 559099




June 1, 1995

CLA-2 R:C:S 559099 AT

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

District Director of Customs
Laredo, Texas 78044-3130

RE: Application for Further Review of Protest 2304-94-100174; Denial of partial duty exemption under HTSUS subheading 9802.00.80 to wearing apparel; documentation; 19 CFR 10.24

Dear Madam:

This is in reference to the above-referenced Protest filed by Kam International, Inc. ("Kam"), concerning various shipments of wearing apparel entered at Laredo, Texas during the period of February 1993 - December 1993. The Application for Further Review was forwarded to our office in a memorandum dated March 17, 1995.

FACTS:

On August 12, 1994, Kam submitted a protest and application for further review to the Laredo District concerning 27 entries of ladies pants and protective coveralls entered at that district under subheading 9802.00.80, Harmonized Tariff Scedule of the United States (HTSUS) during the period of February 1993 - December 1993. The Application for Further Review of Protest No. 2304-94-100174, was forwarded to us by your office in a memorandum dated March 17, 1995. A cost submission and other information was submitted with the Application for Further Review.

According to the record, Kam exports pre-cut fabric components and trimmings of U.S. origin to its subsidiary, RLM de Mexcio, in Mexico for asssembly into ladies pants and protective coveralls. After the garments are assembled in Mexico, they are imported into the U.S. and entered under the 9802.00.80, HTSUS, partial duty exemption. Your office (Import Specialist Rosi Arredondo, Harlingen, Texas) has advised us that the U.S. origin pre-cut components and trimmings are exported to Mexico in a condition ready for assembly and that the Mexican operations constitute acceptable assembly operations under 9802.00.80, HTSUS.

Exhibit B of the cost submission contains a Summary of Entries under item 9802.00.80, for the period of January - December 1993. The cost submission also contains: (1) a declaration by Kam dated February 13, 1995, that the ladies pants and protective coveralls, with a specified identification number, were "assembled in the single foreign territory or country ... of fabricated components which are in whole the product of the U.S. and/or the single foreign territory or country ...."; (2) a declaration by Kam that the information supplied in the cost submission and supporting documents is correct; and (3) written declarations by the U.S. suppliers that the fabric components and trimmings are entirely of U.S. origin.

Protestant claims that the cost submission and supporting documents all indicate that the imported ladies pants and protective coveralls are eligible for the partial duty exemption under 9802.00.80, HTSUS.

ISSUE:

Whether the imported wearing apparel qualifies for the partial duty exemption available under subheading 9802.00.80, HTSUS.

LAW AND ANALYSIS:

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.

An article entered under this tariff provision is subject to duty upon the full value of the imported asembled article, less the cost or value of qualifying U.S. components assembled therein, provided there has been compliance with the documentation requirements of 19 CFR 10.24. Section 10.11(b), Customs Regulations (19 CFR 10.1(b)), provides, in part, that the "[a]llowance of an importer's claim is dependent upon meeting the statutory requirements for the exemption under subheading 9802.00.80 and his complying with the documentary requirements det forth in section 10.24."

Section 10.24(a), Customs Regulations (19 CFR 10.24(a)), requires the submission of a foreign assembler's declaration (in "substantially the" form set forth in that provision) with the entry of articles claimed to be entitled to the partial duty exemption under subheading 9802.00.80, HTSUS. The declaration should state that, to the best of the assembler's "knowledge and belief", the articles being imported were assembled, in whole or in part, from components that are products of the U.S., and should contain certain information concerning the U.S. components, including their description, marks of identification, quantity, unit value at time and place of export from the U.S., the port and date of export from the U.S., the name and address of the manufacturer and description of the assembly operations performed abroad. 19 CFR 10.24(a)(1). Section 10.24(a)(2) requires an endorsement by the importer certifying the accuracy of the declaration and other documents submitted.

Our review of the cost submission and supporting documents indicate that there is a foreign assembler's declaration for each entry submitted to us. The supporting documents provide information concerning the type, source, quantity, and value of the fabric components and trimmings used to make the ladies pants and protective coveralls. The other documentary requirements, such as a description of the operations (while not extensive) and the endorsement by the importer also appear to be satisfied. There is also no indication that the statements sworn to on these documents regarding the U.S. origin of the fabric components and trimmings exported for assembly are false, and there is no indication that there was anything other than a proper assembly of the fabric components and trimmings in Mexico. Therefore, it is our opinion that the claim for subheading 9802.00.80, HTSUS, treatment should be granted since the articles were assembled in whole or in part of U.S. fabricated components, the fabric components and trimmings were exported from the U.S. in condition ready for assembly, and they were not advanced in value or improved in condition abroad except by being assembled.

With regard to the value of the U.S. fabric components and trimmings that is deducted from the full appraised value of the assembled article, section 10.17, Customs Regulations (19 CFR 10.17), states that if the appraising officer concludes that the cost of the value of the fabricated components does not represent a reasonable cost or value, then the value of the components shall be determined in accordance with 19 U.S.C. 1401a and 1402. Accordingly, the value of the U.S. components for purposes of subheading 9802.00.80, HTSUS, should be determined in accordance with 19 CFR 10.17.

HOLDING:

On the basis of the information provided, we find that the claim for subheading 9802.00.80, HTSUS, treatment should be granted since the articles were assembled in whole or in part of fabricated components which were exported from the U.S. in a condition ready for assembly, and they were not advanced in value or improved in condition abroad except by being assembled. The value of the U.S. components should be determined in accordance with 19 CFR 10.17. Accordingly, the protest should be granted in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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