Country of Origin Marking Exception for Textile Goods Assembled Abroad With Components Only Cut to Shape in the U.S.

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 102 and 134

Country of Origin Marking Exception for Textile Goods Assembled

Abroad With Components Only Cut to Shape in the U.S.

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: General policy statement.

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SUMMARY: This notice advises the public of a general country of origin

marking exception that will be granted by Customs, commencing July 1,

1996, for imported textile goods assembled abroad with components which

were only cut to shape in the United States.

EFFECTIVE DATE: July 1, 1996.

FOR FURTHER INFORMATION CONTACT: Craig Walker, Special Classification

and Marking Branch, Office of Regulations and Rulings (202-482-6980).

SUPPLEMENTARY INFORMATION:

Background

On September 5, 1995, Customs published in the Federal Register (60

FR 46188) a final rule document setting forth, in section 102.21,

Customs Regulations (19 CFR 102.21), new rules of origin applicable to

textile and apparel products. These rules, which become effective July

1, 1996, implement the provisions of section 334 of the Uruguay Round

Agreements Act (``the Act'') (codified at 19 U.S.C. 3592).

One of the fundamental changes that will result from the new

textile rules of origin is that cutting fabric to shape will no longer

confer origin. Currently (prior to July 1, 1996), the cutting of

foreign fabric to shape in the U.S. results in the components becoming

products of the U.S. If these components are assembled abroad and

returned, they are entitled to a duty allowance under subheading

9802.00.80, HTSUS, and pursuant to the regulations (19 CFR 10.22, which

will be eliminated effective August 5, 1996), they may be marked

``Assembled in X country from U.S. components'' or a similar phrase.

However, under the new textile rules, these fabric components will no

longer be of U.S. origin. Therefore, while the Act provides that

importers may continue to receive a duty allowance for components cut

to shape in the U.S. from foreign fabric and assembled abroad,

effective July 1, 1996, such assembled goods will no longer be

considered properly marked when they are labeled ``Assembled in X

country from `U.S.' components.''

[[Page 32925]]

However, the marking statute and regulations allow for exceptions

to the marking requirements under certain circumstances. One of these

exceptions concerns articles which cannot be marked prior to, or after,

importation except at an expense that would be economically

prohibitive. See 19 U.S.C. 1304(a)(3) (C) and (K), and 19 CFR 134.32(c)

and (o). In consideration of: (1) The fact that many labels for

assembled goods were already printed prior to July 1, 1996, on the

basis of the current textile origin rules; (2) the expectation that

many individual requests will be received for marking exceptions on the

ground of economic prohibitiveness; and (3) the importance of providing

uniformity of Customs treatment for such goods, Headquarters has made a

general finding that it would be economically prohibitive to properly

mark goods (either before or after importation) with respect to which

marking labels have already been pre-printed or/or sewn into goods

based on the current origin rules. This action will allow importers to

exhaust their inventory of pre-existing labels stating ``Assembled in X

country from U.S. components'' or a similar phrase, for goods that were

assembled from components that were only cut to shape in the U.S.

(i.e., not woven in the U.S.). This general marking exception shall be

granted for all imported goods marked as described above for a period

not to exceed four (4) months from the effective date of the new

textile rule of origin (i.e., no later than November 1, 1996) which

Customs views as a reasonable period of time for the exhaustion of

existing inventory of labels. Please note that, if information is

obtained that the above labels were printed after July 1, 1996, this

general marking exception will not apply.

Dated: June 21, 1996.

Stuart P. Seidel,

Assistant Commissioner, Office of Regulations and Rulings.

[FR Doc. 96-16278 Filed 6-25-96; 8:45 am]

BILLING CODE 4820-02-P