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HQ 560932

September 2, 1998

RR:CR:SM 560932 RSD


TARIFF No. 9802.00.80

Mr. John S. Haskell
Kufner Textile Corporation
212 West 35th Street
New York, New York 10001

RE: Applicability of HTSUS subheading 9802.00.80 to shirts made in the Caribbean using interlining fabric from Mexico for the cuffs and collars; Special Access Program

Dear Mr. Haskell:

This is in response to your letter dated March 25, 1998, addressed to the Customs Information Exchange in New York, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to shirts manufactured in the Caribbean using Mexican interlining fabric for the shirt cuffs and collars. Your letter indicates that you are specifically interested in the applicability of the Special Access Program (subheading 9802.00.8015, HTSUS) to the imported shirts. The National Commodity Specialist Division forwarded your letter to our office for a determination. A sample of the interlining fabric that will be used in `making the shirts accompanied your request.


Kufner Textile Corporation (Kufner) is an international manufacturer of interlining products which are distributed to men's and women's wear manufacturers throughout the world. In this case, the interlining fabric will be spun, woven, finished, and coated in Mexico. In the past, Kufner has been supplying the U.S. market from its Hong Kong factory. Many of Kufner's customers are apparel manufacturers who import merchandise under subheading 9802.00.80, HTSUS and specifically 9802.00.8015, HTSUS (the Special Access Program).

Kufner wishes to furnish Mexican produced interlining fabric to its U.S. customers. The Mexican produced cotton interlining fabric will be imported into the U.S. and sold to shirt manufacturers who will die cut it into shirt collars and cuffs. The collars, cuffs and the other shirt components will be sent to a Caribbean country where they will be assembled into a finished shirt. You ask whether if the imported shirts will be eligible for the Special Access Program. In their transmitted memorandum, the National Commodity Specialist Division advised that the assembled shirts under consideration were when imported into the U.S. would be classified under heading 6205 or 6206, HTSUS.


Whether shirts assembled in the Caribbean with collars and cuffs die cut in the U.S. from Mexican formed interlining fabric will qualify for the Special Access Program under subheading 9802.00.8015, HTSUS.


To qualify for the Special Access Program, products must be eligible for entry under subheading 9802.00.80, HTSUS. In addition, all fabric components, with the exception of findings, trimmings and certain elastic strips not exceeding 25 percent of the cost of the components of the assembled product, must be formed in the U.S. Such U.S. formed fabric must also be cut to pattern or shape in the U.S. Customs Directive Number 3500-12 dated September 2, 1986 provides, as follows:

[f]indings trimmings, and elastic components of the finished assembled products need not be of United States origin. Products assembled in participating Caribbean countries and made of U.S. formed and cut fabric plus findings, trimmings, and elastic of foreign origin may enter the United States under the program. However, the total value of such foreign findings, trimmings, and elastic components shall not exceed 25 percent of the cost of the components of the assembled product. Products whose foreign findings, etc., exceed 25 percent do not qualify for the Program. Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, "bow buds", lace trim, zippers, including zipper tapes, and labels.

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.

All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

The issue presented in this case is whether the imported shirts are eligible for the Special Access Program when the collar and cuff of the shirts are die cut in the U.S. from interlining fabric formed in Mexico. As already noted, to be eligible for the Special Access Program all fabric components, with the exception of findings, trimming and certain elastic strips not exceeding 25 percent of the cost of the components of the assembled product, must be formed and cut in the U.S. However, on September 20, 1996, the Committee for the Implementation of Textile Agreements published a notice in the Federal Register, 61 FR 49439, which identified a temporary amendment to the foreign origin exception for finding and trimmings under the Special Access Program. Effective on September 23, 1996, by date of export, the foreign origin exception for findings and trimmings, including elastic strips of less than one inch in width, under the Special Access program was temporarily amended to include non-U.S. formed, U.S. cut interlinings for men's and boy's and women's and girl's suit-type jackets in Categories 433, 435, 443, 444, 633, 635, 643, and 644. The amendment still required that in the aggregate the interlinings findings and trimmings not exceed 25 percent of the cost of the components for the assembled article.

The Federal Register notice made clear that the exception for interlinings was limited to suit jackets and suit-type jackets. In this instance, the merchandise imported from the Caribbean would be shirts, not suit jackets or suit-type jackets. Accordingly, the exception for foreign fabric interlinings would not be applicable in this case. Therefore, because all fabric components of the shirts are not formed in the United States, the shirts are not eligible for the Special Access Program.

Furthermore, according to the National Commodity Division memorandum, the imported assembled shirts are classified in HTSUS headings which include textile category numbers. Therefore, in accordance with Treasury Decision 91-88 (T.D. 91-88), the imported merchandise are considered textile and apparel articles for purposes of U.S. Note (2b), subchapter II Chapter 98 HTSUS, and thus, they would be precluded from receiving duty-free treatment under that provision.


Because the interlining fabric used in making the shirts, was not formed in the United States, the imported shirts are ineligible for the Special Access Program under subheading 9802.00.80.15, HTSUS.
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 file without a copy, this ruling should be brought to the attention to the Customs officer handling the transaction.


John Durant, Director
Commercial Rulings Division

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