Eligibility of unisex shirts for duty allowance under section 334(b)(4) of the Uruguay Round Agreements Act; 19 U.S.C. 3592; subheading 9802.00.80; pre-marked fabric; cut-to-shape; 19 CFR 10.25

HQ 559848 August 23, 1996 CLA-2 RR:TC:SM 559848 BLS CATEGORY: Classification TARIFF NO.: 9802.00.80 John M. Peterson, Esq. Arthur K. Purcell, Esq. Neville, Peterson & Williams 60 Broad Street New York, New York 10004 RE: Eligibility of unisex shirts for duty allowance under section 334(b)(4) of the Uruguay Round Agreements Act; 19 U.S.C. 3592; subheading 9802.00.80; pre-marked fabric; cut-to-shape; 19 CFR 10.25 Gentlemen: This is in reference to your letter dated May 10, 1996, on behalf of Mamiye Brothers (“Mamiye”), concerning eligibility for the duty allowance under section 334 of the Uruguay Round Agreements Act of certain unisex shirts that your client intends to import from the Dominican Republic. FACTS: Mamiye plans to import cotton knit fabric from Malaysia which is pre-marked with a cutting pattern and printed with a cartoon character (for example, “Mickey Mouse”). Upon importation into the U.S., the bolts of fabric will be cut to shape along the cutting lines to create fabricated shirt components. The cut-to-shape components, together with other U.S.-origin fabricated components such as thread and labels, will be exported to the Dominican Republic where they will be assembled into finished shirts, packaged, and returned to the U.S. for entry. ISSUE: Whether, in view of the new country of origin rules for textiles under which the U.S. would not be the country of origin of the unisex shirts, the imported articles will receive the same duty treatment previously accorded to such articles under subheading 9802.00.80, HTSUS, upon return from the Dominican Republic.  - 2 - LAW AND ANALYSIS: Section 334, Uruguay Round Agreements Act, Pub. L. 103-465, 108 Stat. 4809 (19 U.S.C. 3592), effective July 1, 1996, provides the rules of origin for textile and apparel products. Section 334(b)(4)(A) of the Act (19 U.S.C. 3592(b)(4)(A)) provides that the value of a component that is cut to shape (but not to length, width, or both) in the U.S. from foreign fabric and exported abroad for assembly into an article that is then returned to the U.S. shall not be included in the dutiable value of such article. Section 10.25, Customs Regulations (19 CFR 10.25), implements Section 334 of the Act. This regulation provides that for purposes of determining whether a reduction in the dutiable value of an imported article may be allowed under this section: * * * * (b) The operations performed abroad on the textile component shall conform to the requirements and examples set forth in § 10.16 insofar as they may be applicable to a textile component; and (c) The valuation and documentation provisions of §§ 10.17, 10.18, 10.21 and 10.24 shall apply. Thus, section 10.25 incorporates by reference the same operational, valuation, and documentation requirements applicable to goods entered under subheading 9802.00.80, HTSUS. The determination of the country of origin of textile components cut in the U.S. from foreign fabric will be made under a general application of the section 334 rules of origin. Accordingly, Customs will allow entry of goods assembled abroad from textile components cut to shape from foreign fabric in the U.S. to be made under subheading 9802.00.8065, and solely for purposes of calculating the duty allowance under this subheading, Customs will treat these textile components as if they were “U.S. fabricated components”. Since the shirt components in the instant case are cut-to-shape from foreign fabric, they will be treated as if they were “U.S. fabricated components”solely for purposes of subheading 9802.00.8065. (Cutting the fabric along pre-marked lines will not change this determination, since the material will still be cut-to-shape.) Therefore, the imported unisex shirts will be entitled to the duty allowance under  - 3 - section 334(b)(4) of the Act, provided the operations performed abroad are acceptable assembly operations or operations incidental to assembly (see 19 CFR 10.16) and the documentation requirements of 19 CFR 10.24 are satisfied. (19 CFR 10.25.) Entry will be made under subheading 9802.00.8065, HTSUS. It is important to note, however, that Customs allowance of entry under subheading 9802.00.80, HTSUS, in order to implement the duty allowance provided under section 334(b)(4), should not be interpreted as a determination of the country of origin of these cut components. The determination of the country of origin of textile components cut in the U.S. from foreign fabric will be made under a general application of the section 334 rules of origin. HOLDING: Textile components cut-to-shape in the U.S. from foreign fabric will be treated as if they were “U.S. fabricated components”, for purposes of entry under subheading 9802.00.8065, HTSUS, although under section 334 of the Uruguay Round Agreements Act (19 U.S.C. 3592) the cut components are not products of the U.S. and the assembling country is the country of origin. Assuming that the operations performed abroad are acceptable assembly operations or operations incidental to assembly, the imported unisex shirts will be entitled to the duty allowance under section 334(b)(4) of the Act (19 U.S.C. 3592(b)(4)), provided the documentation requirements of 19 CFR 10.24 are met. See 19 CFR 10.25. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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 Division