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NY 810850




June 23, 1995

CLA-2-61:S:N:NV:354 810850

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.50

Ms. Tracey Ellman
PBB USA Inc.
P.O. Box 950
Buffalo, NY 14202

RE: Applicability of subheading 9802.00.50 HTS and Country of Origin for coated knit gloves.

Dear Ms. Ellman:

This is in response to your letter dated May 24, 1995, on behalf of Perfect Glove Company Inc., requesting a ruling concerning the country of origin and applicability of subheading 9802.00.50 HTS, to gloves imported from Japan. A sample of the glove was submitted for examination.

Your client intends to ship USA manufactured string knit polyethylene gloves to Japan. In Japan the gloves will be coated with polyurethane in a dipping process. The finished glove's material content by weight will be 89% polyethylene and 11% polyurethane.

You have requested consideration for the duty exemption available under subheading 9802.00.50 HTS, when imported into the U.S. In addition you request a country of origin determination.

Subheading 9802.00.50, HTSUS, provides for the assessment of duty on the value of repairs or alterations performed on articles returned to the U.S. after having been exported for that purpose. However, the application of this tariff provision is precluded in circumstances where the operations performed abroad destroy the identity of the articles or create new or commercially different articles. See, A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff'd, C.D. 1752, 36 Cust.Ct. 46 (1956); and Guardian Industries Corporation v. United States, 3 CIT 9 (1982), Slip Op. 82-4 (Jan. 5, 1982). Subheading 9802.00.50, HTSUS, treatment is also precluded where the exported articles are incomplete for their intended use and the foreign processing operation is a necessary step in the preparation or manufacture of finished articles. See, Dolliff & Company, Inc. v. United States, 81 Cust.Ct. 1, C.D. 4755, 455 F. Supp. 618 (1978), aff'd, 66 CCPA 77, C.A.D. 1225, 599 F.2d 1015 (1979).

Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations, provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8), are satisfied.

We have previously held that coating operations which create a new or different article exceed an alteration. See, Headquarters Ruling Letter (HRL) 554883 dated June 16, 1989, which held that coating polypropylene film with acrylic or saran creates a new article with a different use, thereby precluding eligibility for the duty exemption available under subheading 9802.00.50, HTS. See also HRL's 55766, 554371 and 554974.

In this case, the foreign coating does not constitute an alteration within the meaning of subheading 9802.00.50, HTS. Coating the glove changes its characteristics and use. The polyurethane coated glove provides resistance to liquids and an anti-slip grip. Additionally the glove is stronger and more durable. Therefore, the gloves subjected to a coating process will not be entitled to the duty exemption available under subheading 9802.00.50, HTS.

Section 12.130, Customs Regulations (19 CFR 12.130), provides country of origin requirements for textiles and textile products. According to 19 CFR 12.130 (c): Chapter 98, Subchapter II, Note 2, HTSUS, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for purposes of the Tariff Act of 1930, as amended ... merchandise which falls within the purview of Note 2 may not, upon its return to the U.S. be considered a product of the U.S.

We have previously held in HRL 555760 that U.S. manufactured T-shirts sent to Canada for an embroidery operation were not considered products of the U.S. pursuant to 19 CFR 12.130 (c), as they were advanced in value and improved in condition by the foreign operation. The T-shirts are considered to be a product of Canada.

In the present case, the U.S. manufactured gloves will be advanced in value and improved in condition by the polyurethane coating operation. Therefore, the coated gloves are not considered a product of the U.S. The country of origin for the imported gloves in this instance is Japan.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1). If it is subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished this may affect the determination. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

Jean F. Maguire

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