CBP Proposal on 50/50 Fiber Blends Will Create Burdens for Importers, Apparel Companies Say in Comments

CBP's proposal for how to classify garments with 50/50 fiber blends would add a "significant amount of additional burden on importers of apparel and made-up textile articles," HanesBrands said in comments filed May 2 with the agency. The filing was in response to CBP's proposed ruling revocation that seems to change how goods of 50/50 blends are classified (see 1905020044). Under the proposal, the tariff classification of the fibers in the 50/50 blend are first considered (e.g., cotton of chapter 52 versus man-made filaments of chapter 54), then the entire garment is classified according to whichever of those constituent fibers in the 50/50 blend is classified last in numerical order.

Hanes said CBP should withdraw its proposal because it "is inconsistent with the language of the Section XI Rules, specifically refuted by past rulings, runs contradictory to the international interpretation of the same language and has potentially broad-reaching impact, including on international treaties." The company said that "by requiring the classification of finished goods to be controlled by separate tariff provisions covering unfinished raw materials which are not under 'consideration,' CBP's proposal materially and improperly alters the plain meaning of the Rules, which are both statutory and internationally applied." VF Corporation filed comments very similar to Hanes'.

The American Apparel and Footwear Association also objected to the proposals and asked that CBP provide its rationale. "We are at a loss to understand what the motivation for this change might be. The notice in the Bulletin announcing this change simply states that the previous classification is in error, a characterization we categorically reject as there is a well‐established industry practice that has been backed up by decades of Customs rulings. Why is this change being proposed and why now? To put it another way, what is the problem that is being fixed?" If the agency continues forward with the proposal, it should do so through a Federal Register notice as a "formal rule-making" with "more thorough outreach to stakeholders," the AAFA said.

The AAFA also requested that, "if CBP decides to move forward with this proposal, it modifies the language of the Explanatory Note, consistent with procedures, so there is no confusion over how such classifications are to be conducted in the future," it said. The association opposes "any efforts to overturn these and similar rulings in this manner and until further explanation and a better process can be provided to the public."

The U.S. Fashion Industry Association seemed to be less worried and said it didn't oppose the revised classifications even though they were a surprise to many. "USFIA acknowledges that CBP made this point as early as 1988" and further described the principle in a 2008 informed compliance publication. Still, the USFIA is worried about "the potential misinterpretation of the proposed ruling," the group said. CBP should issue a statement that this classification principle doesn't "come into play unless one of the relevant components is a 50/50 blend" and wouldn't otherwise affect "the classification of reversible garments or of garments with multiple components."

Other USFIA members mentioned the possibility of potential denial of FTA benefits, the trade group said. "Some of this concern may be the result of statements in the proposed ruling that a cotton or wool component is classified in the chapter 61 or 62 provision for the garment," it said. "This awkward construction may have caused confusion. Statements to the effect that the classification of the garment is based on the fiber is more accurate and less subject to misinterpretation."

The Canadian Apparel Federation invoked some NAFTA-related concerns in its comments. "The NAFTA (and USMCA) Tariff Preference Level (TPL) eligible goods are based on quota category," the group said. Altering the historical interpretation of the proper quota category would be a unilateral alteration of the negotiated trade agreement." Such a change would also be inconsistent with the World Customs Organization principles against deviating "from a historically shared interpretation of the provisions."

Email ITTNews@warren-news.com for copies of the comments.