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HQ 559584

April 2, 1996

CLA-2 RR:TC:SM 559584 DEC


TARIFF NO.: 9802.00.90

Port Director
P.O. Box 3130
Laredo, Texas 78044-3130

RE: Internal Advice 39/95; eligibility of a cotton denim dress for duty-free treatment under subheading 9802.00.90; enzyme washing; 19 CFR HRL 555665; HRL 555008; HRL 554232; HRL 557115; HRL 558708; Nissho-Iwai American Corp. v. United States, 641 F.Supp. 808, 10 CIT 154

Dear Sir:

This is in response to a request for internal advice initiated by Sandler, Travis & Rosenberg on behalf of California Fashion Industries, Incorporated, concerning the eligibility of cotton denim dresses subjected to an enzyme washing process for duty-free treatment under subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS). A sample of the garment was submitted for our examination.


The cotton denim dresses at issue are assembled in Mexico from fabric components all of which are wholly formed and cut in the United States. The process at issue, which is performed after assembly, involves various washing, draining and rinsing steps designed to create a "stone-washed" appearance to the garment. During the course of these steps, a desizer is used to clean the fabric of impurities. Enzymes are used to abrade the fabric and additional chemicals are used to adjust the pH level. A cationic softener is used to give the fabric a softer hand.


Are the imported cotton denim dresses eligible for duty-free treatment under subheading 9802.00.90, HTSUS, after being subjected to the wash process described above?


Annex 300-B of the North American Free Trade Agreement ("NAFTA") is applicable to textile and apparel goods. Appendix 2.4 of Annex 300-B provides that:

[o]n January 1, 1994, the U.S. shall eliminate customs duties on textiles and apparel goods that are assembled in Mexico from fabrics wholly formed and cut in the United
States and exported from and reimported into the United States under:

(a) U.S. tariff item 9802.00.80.10; or

(b) Chapter 61, 62, or 63 if, after such assembly, those goods that would have qualified for treatment under 9802.00.80.10 have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing.

Thereafter, the U.S. shall not adopt or maintain any customs duty on textile or apparel goods of Mexico that satisfy the requirements of subparagraph (a) or (b) or the requirements of any successor provision to U.S. tariff item 9802.00.80.10.

Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:

Textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part (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; provided that goods classifiable in chapters 61, 62 or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma- pressing after assembly as provided for herein.

Since subheading 9802.00.90, HTSUS, was intended as a successor provision to subheading 9802.00.80, HTSUS, with respect to certain textile and apparel goods assembled in Mexico, the regulations under subheading 9802.00.80, HTSUS, may be instructive in determining whether a good is eligible for the beneficial duty treatment accorded by subheading 9802.00.90, HTSUS. As distinguished from subheading 9802.00.80, HTSUS, however, it is noted that the new statute requires only that all fabric components be formed and cut in the U.S., and that only such components, in whole or in part, must satisfy the three conditions set forth in (a) - (c) of the statute. Headquarters Ruling Letter (HRL) 558708, dated June 14, 1995.

The first issue that we will address is whether the enzyme washing process is considered to be an operation incidental to the assembly process. Pursuant to section 10.16(c)(4), Customs Regulations (19 CFR 10.16(c)(4)), chemical treatments designed to impart new characteristics to components or assembled articles, such as permapressing, dying, or bleaching, are not regarded as operations incidental to assembly and preclude the application of the partial duty exemption under subheading 9802.00.80, HTSUS.

Counsel has stated in his submission that the enzyme-wash process at issue provides the same results as stone-washing, acid-washing, and bleaching of the garment. We have no basis to disagree with counsel's conclusion that the enzyme-wash at issue is analogous to a stone-washing, acid-washing, and bleaching. Customs has consistently held that such operations are not incidental to the assembly process, and U.S. components subjected to such operations are precluded from receiving subheading 9802.00.80, HTSUS, treatment. For example, see HRL 555665, dated March 11, 1991 (denim garments, assembled in the Dominican Republic and stonewashed, were ineligible for a duty allowance under subheading 9802.00.80, HTSUS) and HRL 555008, dated March 24, 1989 (U.S.-origin cloth assembled into pants and stonewashed were precluded from item 807.00, Tariff Schedules of the United States (TSUS) (the precursor provision of subheading 9802.00.80, HTSUS), treatment because the process added characteristics that did not exist prior to assembly). In HRL 554232, dated August 25, 1986, bleaching and softening exported fabric was also regarded as too substantial to be treated as merely incidental because there was not only a change in color, but a change in texture as well. See also HRL 557115, dated May 28, 1993 (garments subjected to a "classic wash" process in which sodium perborate, a bleaching agent and disinfectant, was added to the wash cycle was too substantial to be considered an acceptable operation incidental to the assembly process pursuant to subheading 9802.00.80, HTSUS).

Based on our analysis of the sample submitted and the statement by counsel that the processing described in this case is considered to have the same results as a stone-washing or acid-washing, the enzyme-washing may not be considered to be an operation incidental to assembly.

The second issue concerns whether the processes specifically provided for in subheading 9802.00.90, HTSUS (bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing) necessarily exclude other processes such as enzyme-washing that have the same effect on the textile articles as those processes that are expressly mentioned in the tariff provision. In support of his contention that these processes are not all-inclusive, counsel contends that, similar to eo nomine provisions in the tariff schedule, the post-assembly finishing operations enumerated in subheading 9802.00.90, HTSUS, allow Customs to consider other forms of processing provided they are similar in kind, function, and purpose to the processes expressly provided for in subheading 9802.00.90, HTSUS. In addition, the U.S. Court of International Trade (CIT) has stated that the canon of construction, ejusdem generis, which means literally, of the same class or kind, teaches that "[a]s applicable to customs classification cases, ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms." Nissho-Iwai American Corp. v. United States, 641 F.Supp. 808, 10 CIT 154, 157 (1986).

Counsel indicates that the characteristics imparted by the enzyme-wash process are basically of the same kind as those imparted by stone-washing, acid-washing, and bleaching. The enzymes used in the enzyme-wash process abrade the garment, resulting in a softer, more worn look and feel. In addition, the enzyme-wash process has evolved into an alternative to stone-washing because it causes less damage to the washing machines and avoids the need to mine the stones needed for the stone-washing. Additionally, enzyme-washed garments do not contain any of the stone sediment that remains after stone-washing.

For purposes of determining the eligibility of articles for duty-free treatment under subheading 9802.00.90, HTSUS, we see no reasonable justification, from either a legal or policy standpoint, for garments which have been subjected to one of the processes specified in this provision to be treated any differently from garments which have been subjected to an unspecified process which imparts essentially the same characteristics to the fabric. It is the position of the Customs Service that the processes expressly referred to in subheading 9802.00.90, HTSUS, were not intended to constitute an all-inclusive list. Accordingly, in addition to the processes enumerated in subheading 9802.00.90, HTSUS (bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly), other processes, such as enzyme-washing designed to reproduce the essential characteristics of stone-washing, acid-washing, or bleaching, may also be performed after assembly to goods classifiable in Chapter 61, 62, and 63 for the purpose of this subheading.


The cotton denim garments that are sent to Mexico for assembly and the enzyme-wash described above may be entered free of duty under subheading 9802.00.90, HTSUS, since the enzyme-wash process is sufficiently analogous to the processes expressly provided for in subheading 9802.00.90, HTSUS.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date 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, Freedom of Information Act and other public access channels.


John Durant

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