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HQ 559738





July 2, 1996

CLA-2 RR:TC:SM 559738 MLR

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Ms. Erin Yeary
Daniel B. Hastings, Inc.
P.O. Box 673
Laredo, Texas 78042-0673

RE: Applicability of subheading 9802.00.90, HTSUS, to wool jackets; Special Regime; findings; trimmings; shoulder pads; chest piece; sleevehead; synthetic suede yoke; Mexico; NAFTA Preference treatment; country of origin marking; Article 509

Dear Ms. Yeary:

This is in reference to your letter of March 8, 1996, requesting a ruling on behalf of Pendleton Woolen Mills, regarding wool jackets assembled in Mexico. Samples of a men's wool jacket, a shoulder pad, chest piece, sleevehead, and synthetic suede yoke were submitted with your request.

FACTS:

The articles at issue are wool jackets stated to be classifiable under subheading 6203.31.00, HTSUS. The following materials will be used to make two styles of "country coats" in Mexico:

Material Country of Origin Classification

Wool Shell USA 6217
Felt USA 5602
Acetate lining USA 5407
Fusible (Pocket and Shell) USA 5603
Interlining USA 5603

Ornamental Trim - yokes, Japan 5603 elbow patches (only used on style D345)
Buttons Italy 9606
(USA for style D345)
Shoulder pad USA 5603
Chest Piece USA 5603
Sleeve head USA 5603
Various types of tape USA 5603 or
5806
Various types of labels USA 5810
Joker Ticket USA 5807

For purposes of this ruling request, we are presuming that the classification headings provided to us are correct. The ornamental trim (i.e., yokes and elbow patches) consists of 60 percent polyamide/40 percent polyurethane. The packaging is indicated to be of U.S. origin. The jacket contains a label in the neck with the marking "Made in Mexico." The sample submitted also contains labels on the inside pocket of the jacket, one in blue with the words "Warranted to be a Pendleton 100% Pure Virgin Wool Portland, Oregon Since 1863," and the other in white attached to the blue label with the marking "Made in Mexico."

ISSUES:

I. Whether the shoulder pads, chest pieces, sleeve headers, and synthetic suede yokes and elbow patches may be considered "findings or trimmings" for purposes of subheading 9802.00.90, HTSUS.

II. Whether the jacket may qualify for preferential tariff treatment under the North American Free Trade Agreement (NAFTA) if the Japanese synthetic suede yoke and elbow patches are cut in the U.S. or Mexico and sewn in Mexico, and all other components originate in the U.S. and/or Mexico.

III. Whether the white label with the country of origin of the jacket must be placed on the inside pocket next to the blue label with the words "Portland, Oregon."

LAW AND ANALYSIS:

I. Findings and Trimmings

Appendix 2.4 of Annex 300-B of the NAFTA, provides that:

[o]n January 1, 1994, the U.S. shall eliminate customs duties on textile 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 and 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.

In view of the fact that the enactment of subheading 9802.00.90, HTSUS, specifically was intended to extend duty-free and quota-free status to all goods assembled in Mexico, which previously were eligible for entry under the Special Regime Program administered under U.S. tariff item 9802.00.8010, HTSUS, it is Customs view that all of the policy directives implementing this program should be considered applicable in the administration of subheading 9802.00.90, HTSUS. One such policy under the Special Regime Program included the allowance of "findings, trimmings, and certain elastic strips of foreign origin" to be incorporated into the assembled good "provided they do not exceed 25 percent of the cost of the components of the assembled product." Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, "bow buds," lace trim, zippers, including zipper tapes, and labels. See 53 FR 15726 (May 3, 1988). We also note that "findings" have been defined as "threads, tapes, buttons, bindings, hooks and eyes, slide fasteners, Featherbone, belting, braids, and other sewing essentials used in garment making,"and trimming is defined as "decoration or ornamental parts." See M. Picken, The Fashion Dictionary (1973). "Findings" are also defined as "a term referring to supplementary fabrics employed in making a garment such as zipper tapes, lining, pocketing, and waistband." See I. Wingate, Fairchild's Dictionary of Textiles (1970).

In this case, you question whether the shoulder pads, chest pieces, sleeve headers, and synthetic suede yokes are considered "findings and trimmings" as that term is used for purposes of the policy directive regarding findings and trimmings which implemented the Special Regime. Although the shoulder pads, chest pieces, and sleeve headers used are currently of U.S.-origin, you state that there is a possibility that these may be sourced from abroad in the future.

In Headquarters Ruling Letter (HRL) 559522 dated February 14, 1996, we determined that sleeve headers and shoulder pads were not "findings or trimmings" as they were more analogous to lining or pocketing which under the Special Regime Program were required to be U.S. formed and cut. Therefore, in HRL 559522, jackets made with foreign shoulder pads and sleeve headers were held to be excluded from subheading 9802.00.90, HTSUS, treatment.

In this case, based upon HRL 559522, it is our opinion that the shoulder pads and sleeve headers are not "findings or trimmings." In addition, we find that the chest piece is also not a "finding." While one of the definitions above refers to "findings" as including supplementary fabrics, linings, and pocketing, under the Special Regime Program, linings and pocketings were specifically excluded from consideration as findings and were required to be U.S. formed and cut. Since shoulder pads, sleeve headers, and the chest pieces appear to be analogous to lining or pocketing, it is our opinion that the shoulder pads, sleeve headers, and the chest pieces may not be considered "findings or trimmings."

In regard to the synthetic suede yoke and elbow patches, these pieces protect the jackets but also ornament them. While one of the definitions refers to "trimmings" as "decoration or ornamental parts," and notwithstanding the example of lace trim under the Special Regime Program as a "trimming," in HRL 558954 dated June 30, 1995, it was held that a 100 percent cotton velveteen upper collar woven in China and cut in the U.S. was not a "trimming" for purposes of subheading 9802.00.90, HTSUS, even though it was a "trimming" for tariff classification purposes. In HRL 558954, it was stated that the exception for finding, trimmings, etc., under the Special Regime Program, was necessarily intended to be of a restrictive nature, as the intent of the statute was to ensure that all fabric components be formed and cut in the U.S. It was noted that examples of findings and trimmings are indicative of the types of components which may be considered exceptions to the requirement that all fabric components be formed and cut in the U.S. and that the velveteen collar would not have been considered a "finding" or "trimming" under the Special Regime Program. Accordingly, HRL 558954 held that the cotton velveteen collar was not a "finding" or a "trimming," and, therefore, since it was a fabric component not wholly formed and cut in the U.S., the jacket to which it was assembled was not eligible for duty-free treatment under subheading 9802.00.90, HTSUS.

In this case, the suede yoke and elbow patches comprise a relatively large surface area of the jacket and serve more than just decorative purposes, unlike lace trim. Accordingly, it is our opinion that the suede yoke and elbow patches may not be considered "findings or trimmings" for purposes of subheading 9802.00.90, HTSUS.

II. NAFTA

In regard to your question as to whether the jackets may be considered NAFTA originating goods if the Japanese suede yoke and elbow patches are cut in the U.S. or Mexico and sewn in Mexico and all other components originate in the U.S. and/or Mexico, General Note 12, HTSUS, incorporates Article 401 of the NAFTA, into the HTSUS. Note 12(b) provides in pertinent part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r),(s) and (t) of this note or the rules set forth therein, or,

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials....

In this case, the jackets will not be wholly obtained or produced entirely in the territory of Canada, Mexico and/or the U.S. Therefore, we turn to the rule applicable to goods of subheading 6203.31.00, HTSUS, where you have stated that the jackets at issue are classifiable, which is provided for in General Note 12(t)/62.13. It provides:

[a] change to subheading 6203.31 through 6203.33 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6002, provided that:

(A) the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties, and

(B) the visible lining fabric listed in chapter rule 1 for chapter 62 satisfies the tariff change requirements provided therein.

In applying the above cited rule, Note 12(t)/62, Chapter rule 3, must also be applied. That rule states:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. If the rule requires that the good must also satisfy the tariff change requirements for visible lining fabrics listed in chapter rule 1 for this chapter, such requirement shall only apply to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings.

For purposes of this ruling request, we will assume that other than the Japanese suede material, all other materials are NAFTA originating. Although you state that the Japanese suede material is classifiable under heading 5603 which is a heading from which a tariff shift is allowed, and you state that the suede will be both cut in the U.S. or Mexico and that it will be sewn in Mexico, the suede components may be disregarded in determining whether the blazer is eligible for NAFTA preferential tariff treatment. As provided by Chapter rule 3, General Note 12(t)/62.13 only applies to the component that determines the tariff classification of the good. As the suede components do not determine the tariff classification of the blazer, they may be disregarded. Accordingly, we find that the jacket will qualify for NAFTA preferential treatment.

III. Country of Origin Marking

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 container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

In ORR ruling 638-69 (January 2, 1979), Customs held that suit jackets, overcoats, and sport coats may be marked with a label affixed over or below the inside pocket if such marking is included on or is in close proximity to the brand name label affixed to the coat in that area. Accordingly, such jackets or coats need not be marked at the nape of the neck. Based upon the sample submitted, the jackets at issue need only be marked by placing a label on the inside pocket since the jackets have an inside pocket and the brand name of the jacket is also at this location. Therefore, for purposes of the marking statute, Customs will not require that the jackets at issue contain a label with their country of origin at the nape of the neck. On the other hand, it will be acceptable to only place the country of origin marking at the nape of the neck alone without the blue and white labels on the inside pocket of the sample submitted. However, to the extent that you place a label on the inside pocket with the reference "Portland, Oregon," we find that the requirements of 19 CFR 134.46 are triggered.

Section 134.46, Customs Regulations (19 CFR 134.46), requires the name of the country of origin to appear legibly, permanently, in close proximity, and in at least comparable size, preceded by the additional words "Made in," "Product of," or other words of similar meaning to the name, when any city or locality in the U.S. or the name of any foreign country or locality which is not the country of origin appears on the imported article or its container. The purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser.

In HRL 732085 dated January 17, 1989, Customs considered the country of origin marking placed on a small tag stitched into a coat's inside side seam. The coat also contained a manufacturer's label bearing the importer's name and the words "Fine Furs For Four Generations, New York, Montgomery," which was attached to the inner breast pocket, midway between the side hem of the coat and the seam bearing the country of origin tag. A hangtag was also attached to the sleeve of the coat indicating the type of fur, the origin of the fur, the color of the fur, and the words "Made In Korea." Customs held that the names of the two domestic cities on the brand label affixed to the inside pocket triggered 19 CFR 134.46, and stated that neither the small fabric tag stitched to the inner seam nor the hangtag attached to the sleeve satisfied the close proximity requirement.

Based upon HRL 732085, we find that the words "Portland, Oregon" on the inside pocket label may mislead the ultimate purchaser. Accordingly, in order to satisfy the requirements of 19 CFR 134.46, we find that the white label attached to the inside pocket with the country of origin will be necessary.

HOLDING:

Based upon the information provided, it is our opinion that the shoulder pads, sleeve headers, chest pieces, and synthetic suede yokes and elbow patches are not "findings or trimmings." Therefore, jackets made with such foreign components will be excluded from subheading 9802.00.90, HTSUS, treatment. However, the jackets will be eligible for NAFTA preferential treatment under the facts presented pursuant to General Note 12(t)/62.13 and Chapter rule 3, that is all materials, except the synthetic suede material, are originating materials. Furthermore, the words "Portland, Oregon" on the inside pocket label trigger the requirements of 19 CFR 134.46; therefore, the white label with the country of origin of the jacket in close proximity to the words "Portland, Oregon" will be necessary.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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