June 8 CBP Bulletin Action on Two 9802 Apparel Ruling Modifications
In the June 8, 2011 issue of the U.S. Customs and Border Protection Bulletin (Vol. 45, No. 24), CBP published a notice on its modification of two rulings on the 9802 duty exemptions available to certain men's screen printed shirts (full exemption) and girl's screen printed pullovers (partial exemption).
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Action Is Effective August 8
This Customs Bulletin action is effective for merchandise entered or withdrawn from warehouse for consumption on or after August 8, 2011, and covers any rulings on this merchandise which may exist but have not been specifically identified. CBP is also revoking any treatment it has previously accorded to substantially identical transactions.
Modifications
Men's Screen Printed Shirts
| Item: Three styles of men's knit garments similar to T-shirts. Foreign yarn will be knit into fabric in the U.S., which will then be dyed and cut into component parts in the U.S. The cut-to-shape component parts will be shipped to Mexico, where they will be sewn into garments and screen printed prior to return to the U.S. |
| New Ruling: HQ H125795 (dated 05/18/11, modified NY N041522) |
| New HTS/Rate: 9802.00.90, Free (full exemption) |
| Old HTS/Rate: 9802.00.90, Free (for components not screen printed), 6109.90.1049, 32%, and 6109.10.0027, 16.5% (for components screen printed) |
| Reason: CBP states that 9802.00.901 (which is for textiles and apparel) provides for a full exemption from customs duties if the components “in whole or in part” meet the subheading’s (a) - (c) requirements. This means that if all the components of the shirts were wholly formed and cut in the U.S. and assembled in Mexico, all need not fully satisfy (a) - (c) in order to gain the full duty exemption. In the instant case, the application of the screen print design to one component (the back panel) of the shirts is not an operation incidental to the assembly process, and will not preclude the shirts, which otherwise satisfy the conditions of the subheading, from receiving the benefit of this tariff provision. Therefore, when returned to the U.S., the shirts are eligible for a 9802.00.90 full duty exemption. |
Girl's Screen Printed Pullovers
| Item: Girl's 100% cotton knit pullovers which feature screen printing of a butterfly on the front body. The fabric used is produced outside the territory of a NAFTA Party and is imported into the U.S. where it is cut into components and exported to Mexico. In Mexico, the components are sewn and assembled, screen-printed and packaged. The finished pullovers are exported to the U.S. |
| New Ruling: HQ H113355 (dated 05/18/11, modified HQ H047557) |
| New HTS/Rate: 9802.00.80, free (partial duty exemption for components not screen printed), 6110.20.20, 16.5% (for components screen printed) |
| Old HTS/Rate: 6110.20.20, 16.5% (entire garment) |
| Reason: CBP states that 9802.00.802 provides for a partial exemption from customs duties for articles assembled abroad "in whole or in part" of fabricated components, if the subheading’s (a) -- (c) requirements are met. Therefore, the further fabrication, i.e., screen printing, of one of the components would not preclude the remainder of the garment, which otherwise satisfies the subheading requirements, from receiving a partial duty exemption. CBP now finds that the components that have not been advanced in value by screen printing are eligible for a partial duty exemption when returned to the U.S., and the screen printed component is not eligible for a partial duty exemption. |
1Subheading 9802.00.90 provides a duty exemption for textile and apparel goods, assembled in Mexico in which all fabric components were wholly formed and cut in the United States, provided that such fabric components, in whole or in part, (a) were exported in a 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; provided that goods classifiable in chapters 61, 62 or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein.
2Subheading 9802.00.80 provides a partial duty exemption for articles 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 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 appraised value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentation requirements of 19 CFR 10.24.
(See ITT's Online Archives or 04/18/11 news, 11041829, for BP summary of the proposed revocation and modification of these items.)