Classification and country of origin determination for body joint braces and supports; 19 CFR 102.21(c)(2); tariff shift

N037915 October 2, 2008 CLA-2-63:OT:RR:NC:N3:351 CATEGORY: Classification John B. Ammerman Logistics Manager AccuMED Innovative Technologies 150 Bud Mil Drive Buffalo, NY 14206 RE: Classification and country of origin determination for body joint braces and supports; 19 CFR 102.21(c)(2); tariff shift Dear Mr. Ammerman: This is in reply to your letter dated June 9, 2008, requesting a classification and country of origin determination for braces and supports which will be imported into the United States. Your letter also requests a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to certain of the supports. We had to return your original request because we needed samples of the items in question. On Sept. 11, 2008, we received the samples. The samples that you submitted are being returned. FACTS: The subject merchandise consists of body joint braces and supports. All of the items are made of a three-layer textile fabric composed of a 1/8” polyurethane cellular foam sandwiched between two layers of stretch knit fabric (85% polyamide and 15% spandex). The first item is a back support (BS50). It wraps around the midsection and fastens in front with hook-and-loop fastener strips. It is 7” wide. In the rear are three vertical, flexible, plastic back supports and a pocket for a hot/cold pack (not included). The second item is a sleeve-style knee support (KN11L). It measures 11” in height and is designed to be slipped over the knee by first inserting the foot and leg. The third item is an elbow support (E143). It is 6½” in height and is designed to fit over the elbow by first inserting the hand and arm; it fastens with hook-and-loop fastener strips. The fourth item is an ankle support (AN21S). It wraps around the back of the foot with the heel protruding; it adjusts around the ankle with hook-and-loop fastener strips. The fifth item is a wrist brace (WR33SM). It has a long, wide, and very rigid metal piece, shaped somewhat like an “S” to follow the curve of the palm. When worn as directed, with the stay in place and the hook-and-loop fastener strips securely closed, the wrist is effectively immobilized from its normal bending. The manufacturing operations for the braces and supports are as follows: you import nylon knit fabric and nylon loop pile fabric that has been knit and brushed in Argentina. In the U.S., the nylon fabrics are laminated to U.S.-made open-cell polyurethane foam to form a sandwich fabric you call Breathe-o-prene; this construction is a textile fabric for tariff purposes. The fabric is cut to shape in the U.S. and the pieces are shipped to the Dominican Republic, where they are assembled by sewing and ultrasonic welding, and the addition of plastic buckles and similar parts into the finished items and shipped back to the U.S. You mention that parts such as “buckles, clasps, etc.” may be imported from the U.S. for inclusion into the braces. If you are the supplier of these raw materials, please note that the cost or value of the parts will 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, free of charge or at reduced cost, for use in connection with the sale of the merchandise for export to the U.S., under 19 U.S.C. 1401a(h)(1)(A). There are four categories of assists, 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 parts must 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 C.F.R. §152.103(d)). ISSUES: What are the classification and country of origin of the subject merchandise? Will the finished back, knee, elbow, and ankle supports qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when imported into the U.S. CLASSIFICATION: The applicable subheading for the back, knee, elbow, and ankle supports will be 6307.90.9889, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other made up textile articles, other. The rate of duty will be 7% ad valorem. The applicable subheading for the wrist brace will be 9021.10.0090, HTSUS, which provides for other orthopedic or fracture appliances, and parts and accessories thereof. The rate of duty will be free. You also asked for the classification of the Breathe-o-prene fabric as described above. The applicable subheading for the knit pile/polyurethane foam fabric will be 6001.22.0000, HTSUS, which provides for pile fabrics, including "long pile" fabrics and terry fabrics, knitted or crocheted, looped pile fabrics, of man-made fibers. The duty rate will be 17.2% ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. COUNTRY OF ORIGIN - LAW AND ANALYSIS: Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995 in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Paragraph (c)(1) states, “The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced.” As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable. Paragraph (c)(2) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:” Paragraph (e) in pertinent part states, The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section: HTSUS Tariff shift and/or other requirements 6307 The country of origin of a good classifiable under subheading 6307.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process. As the knit fabrics are manufactured and finished in a single country, that is, Argentina, as per the terms of the tariff shift requirement, country of origin of the back, knee, elbow, and ankle supports is conferred in Argentina. Regarding the country of origin of the wrist brace, classifiable in heading 9021, HTSUS, Section 334 of the Uruguay Round Agreements Act does not apply because the brace is not classified as a textile article. Customs Regulation 134.1(b) applies. The wrist brace, to be made in the Dominican Republic from the Breathe-o-prene fabric and other components, is subject to a different criterion, substantial transformation. A substantial transformation will take place in the Dominican Republic where the components will be assembled into the finished article. So, noting Customs Regulation 134.1(b), country of origin of the wrist brace is conferred in the Dominican Republic. HEADING 9802 You also asked whether the finished back, knee, elbow, and ankle supports qualify for a partial duty exemption under subheading 9802.00.80, HTSUS, when imported into the U.S. Subheading 9802.00.80, HTSUS, provides a partial duty exemption for articles assembled abroad in whole or in part of fabricated components, the product of the United States, which were exported in condition ready for assembly without further fabrication; have not lost their physical identity in such articles by change in form, shape or otherwise, and 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, lubrication, 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 value of the imported assembled article, less the cost or value of such U.S. components, upon compliance with the documentary requirements of Section 10.24, Customs Regulations (19 C.F.R. 10.24). Section 10.14(a), Customs Regulations (19 C.F.R. 10.14(a)), states that the components must be in a condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly before, during, or after their assembly with other components. Section 10.16(a) Customs Regulations (19 C.F.R. 10.16(a)) provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, laminating or sewing. The cut pieces of Breathe-o-prene fabric used in the foreign assembly operation were cut in the U.S. from foreign fabric; they are not considered products of the U.S. for purposes of subheading 9802.00.80, HTSUS. In such cases, section 334(b)(4)(A) of the URAA (codified at 19 U.S.C. 3592(b)(4)), provides: The value of a component that is cut to shape (but not to length, width, or both) in the United States from foreign fabric and exported to another country, territory, or insular possession for assembly into an article that is then returned to the United States . . . shall not be included in the dutiable value of such article. The effect of 19 U.S.C. 3592(b)(4) is to preserve the tariff treatment afforded by subheading 9802.00.80, HTSUS, that otherwise would no longer be available under the Section 334 origin rules since cutting foreign fabric to shape in the U.S. does not result in the cut fabric being considered a product of the U.S. Section 10.25, Customs Regulations (19 CFR 10.25), implements 19 U.S.C. 3592(b)(4), and incorporates by reference the same operational, valuation and documentation requirements applicable to goods entered under subheading 9802.00.80, HTSUS. Therefore, imported goods entitled to a duty allowance under 19 CFR 10.25 are to be entered under subheading 9802.00.8065, HTSUS, and, solely for purposes of calculating the duty allowance under this subheading, Customs treats the textile components cut to shape in the U.S. from foreign fabric as if they were U.S.-fabricated components. In this case, insofar as the fabric is cut to shape (but not merely to length, width, or both), allowances in duty may be made for the cost or value of all components of U.S. origin. HOLDING: The country of origin of the back, knee, elbow, and ankle supports is Argentina. The country of origin of the wrist brace is the Dominican Republic. The processes that are used to produce the back, knee, elbow, and ankle supports constitute acceptable assembly operations or incidental operations for purposes of subheading 9802.00.80, HTSUS. 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 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be 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 of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2. 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 Mitchel Bayer at (646) 733-3102. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division