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HQ 558650
CLA-2 R:C:S 558650 DEC
Ms. Patricia M. Hanson
Katten Muchin & Zavis
525 West Monroe Street
Chicago, Illinois 60661-3693
RE: U.S. Note 2(b), subchapter II, chapter 98, HTSUS; T.D. 91-88
Dear Ms. Hanson:
This is in response to your letter dated July 28, 1994, and your supplemental letter of July 27, 1995, requesting a ruling on whether certain non-woven disposable apparel is entitled to duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States (HTSUS) (Note 2(b)).
Your client, Baxter Healthcare Corporation of Illinois (Baxter), intends to import non-woven disposable apparel items including sleeves, aprons, frocks, smocks, lab coats, and coveralls that are made of Tyvek fabric. You state that the Tyvek material is an impermeable non-woven fabric manufactured by the Dupont Corporation in the United States.
Baxter intends to send the Tyvek material in bulk to Costa Rica where it will be cut to shape and assembled into finished disposable garments. You indicated that the finished articles will be used in clean rooms, hospitals, clinics, laboratories, and contaminated areas. In Headquarters Ruling Letter (HRL) 085419, dated January 26, 1990, Customs ruled that non-woven coveralls made from Tyvek that were designed for use in hospitals, clinics, laboratories or contaminated areas were classifiable under subheading 6210.10.4010, HTSUS.
The 1995 HTSUS deleted subheading 6210.10.40, HTSUS, and added the following provisions:
6210.10.50 Nonwoven disposable apparel designed for use in hospitals, clinics, laboratories or contaminated areas
6210.10.70 Disposable briefs and panties designed for one-time use
6210.10.90 Other
10 Overalls and coveralls............(659)
40 Other................(659).
Subheading 6210.10.50, HTSUS (1995), contains the exact language of subheading 6210.10.4010, HTSUS (1994). The rate of duty was lowered from 17% to 5.6%. Articles that were previously classified under subheading 6210.10.4010, HTSUS (1994), or are now classified under subheading 6210.10.50, HTSUS (1995), are not subject to quota.
You state that the Tyvek material is manufactured in the United States and is of 100% U.S. origin. In addition, you state that all of the minor components (thread, zippers, fasteners, elastic, rubber tape, and adhesive) used in the production of the apparel items noted above are of United States origin. All materials used to make the disposable articles are shipped directly from the United States to Costa Rica and the finished articles are shipped directly to the United States without entering the commerce of any foreign country.
Whether the apparel that is manufactured as described above is eligible for duty-free treatment under Note 2(b).
LAW AND ANALYSIS:
Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUS, to provide for the duty-free treatment of articles (other than textile and apparel articles, petroleum and petroleum products) which are assembled or processed in a Caribbean Basin Economic Recovery
Act (CBERA) beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.
Note 2(b) provides as follows:
(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if--
(I) the article is--
(A) assembled or processed in whole of fabricated components that are a product of the United States, or
(B) processed in whole of ingredients (other than water) that are a product of the United States, in a beneficiary country; and
(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.
As stated in this paragraph, the term "beneficiary country" means a country listed in General Note 3(c)(v)(A).
Although Note 2(b)(I)(A) and (B) are separated by the word "or", it is our opinion that Congress did not intend to preclude free treatment under this provision to an article which is created in a BC both by assembling and processing U.S. fabricated components and by processing U.S. ingredients.
Pursuant to General Note 7(a), HTSUS, Costa Rica has been designated as a BC for CBERA purposes. Note 2(b) specifies four categories of products which are excluded from duty- free treatment under this provision: textile articles; apparel articles; petroleum; and certain products derived from petroleum. In this regard, for purposes of Note 2(b), Customs has held that "textile" and "apparel" articles are articles classified in provisions of the HTSUS which include a textile category number, i.e., are subject to textile agreements. See T.D. 91-88, dated October 18, 1991.
The subject articles (sleeves, aprons, frocks, smocks, lab coats, and coveralls) are classifiable under subheading 6210.10.50, HTSUS (1995), which contains the
exact language from subheading 6210.10.4010, HTSUS (1994). This provision does not include a textile category number, and therefore these articles are not considered a textile or apparel article for purposes of Note 2(b). Since the subject articles are processed in a BC wholly of fabricated components of U.S. origin, it qualifies for duty-free treatment under Note 2(b), HTSUS.
HOLDING:
Based on the information provided, since the Tyvek material and all of the minor components (thread, zippers, fasteners, elastic, rubber tape, and adhesive) are of U.S. origin, the materials used to make the disposable articles are shipped directly from the United States to Costa Rica, and the finished articles are shipped directly to the United States without entering the commerce of any foreign country, the articles will qualify for duty-free treatment under Note 2(b) assuming compliance with the documentation requirements set forth in Headquarters telex 9264071, dated September 28, 1990.
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
John Durant
Director, Commercial Rulings Division
Tariff No.: 6210.10.50 - Nonwoven dispos apparel designed for hosps, clinics, labs or cont area use, made up of fab of 5602/5603, n/formed or lined w paper, not k/c
Tariff No.: 6210.10.70 - Disposable briefs and panties designed for one time use, made up of fabrics of 5602 or 5603, not formed or lined w paper, not k/c
Tariff No.: 6210.10.90 - Garments, nesoi, made up of fabrics of heading 5602 or 5603, not formed or lined w paper, not k/c
Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad