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NY A85462

July 19, 1996

CLA-2-61:RR:NC:WA:354 A85462


TARIFF NO.: 6116.93.8800

Mr. Ken Rogala
Gramercy Designs, Inc.
77 Bleecker Street, Suite #622
New York, New York 10012

RE: The applicability of Chapter 98 provisions and duty status of freight charges of U. S. made fabrics sent to China to be cut and sewn into gloves, and shipped back to the U. S.

Dear Mr. Rogala:

In your letter dated July 5, 1996 you have requested further information regarding applicability of Chapter 98 provisions on gloves which were the subject of a recent classification ruling letter issued by New York, namely A82869. Additional information provided in your most recent request indicates this glove will be made of American made fabrics sent to China to be cut and sewn, and subsequently imported to the United States. You are questioning the applicability of Chapter 98 provision 9802.00.80 and the dutiablity of freight charges incurred in sending the material to China.

As previously described in New York Ruling letter A82869, Style 8250 is a men's knit pile glove without fourchettes. The glove has an outer shell made of acrylic and polyester on the exterior of the shell and olefin on the interior of the shell. The glove has a sewn-in polyester lining and features a partial elasticized wrist tightener.

Harmonized Tariff Schedule of the United States (HTS) 9802.00.80, provides for Articles . . . assembled abroad in whole or in part of fabricated components, the product of the United States . . . This provision would not apply since American fabric, not American fabricated components are being sent to China.

However, U.S. Note 2 to Subchapter II of Chapter 98 states in part that:

Any product of the United States which is returned after having been advanced in value or improved in condition abroad by any process of manufacture or other means, or any imported article which has been assembled abroad in whole or in part of products of the United States, shall be treated for the purposes of this act as a foreign article, and, if subject to a duty which is wholly or partly ad valorem, shall be dutiable, except as otherwise prescribed in this part, on its full value determined in accordance with section 402 of the tariff act of 1930, as amended. If such product or such article is dutiable at a rate dependent upon its value, the value for the purpose of determining the rate shall be its full value under the said section 402.

Since there is no other part of Subchapter II Chapter 98 which would specifically exempt the Chinese made gloves from the application of this Note, the gloves would be considered a foreign article for duty assessment purposes. In addition, the cost or value of the fabric may represent an assist under Section 402 of the Tariff Act (TA). The term "assist" is defined as that which is supplied directly or indirectly by the buyer of imported merchandise, and free of charge or at reduced cost, for use in connection with the sale of the merchandise for export to the U.S. 19 U.S.C. 1401a(h)(1)(A). There are four categories of assist; but only the first, encompassing "materials, components, parts and similar items incorporated in the imported merchandise," is potentially relevant to the instant situation. As an assist the value of the fabric would be added to the processing costs before the ad valorem rate of duty is applied pursuant to Section 402, TA. Additionally please note, that the value of any assist will include transportation costs to the place of production. See, Section 152.103(d), Customs Regulations (19 CFR 152.103(d)).

Section 12.130(c) CR specifically addresses the situation where a U.S. product is sent abroad and is returned after having been advanced in value or improved in condition. In harmony with Note 2 Subchapter II of chapter 98, the regulation instructs that a U.S. product advanced in value or improved in condition while abroad may not be considered a product of the U.S. upon its return to the United States. Consequently, in the situation before us for consideration, the gloves would be considered a product of China for quota and visa purposes as previously advised in NY Ruling Letter A82869.

The fabric supplied by the buyer to the manufacturer are assists. As such, the cost of the fabric, as well as transportation costs to the place of production are additions to the price actually paid or payable for imported merchandise within the meaning of section 402(b)(1)(C) of the TA.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Brian Burtnik at 212-466-5880.


Roger J. Silvestri

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