HQ 955029: Request for Further Review of Protest No. 5501-93-100240,dated June 29, 1993, concerning the classification of artificialflowers

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                             HQ 955029
                           March 8, 1994                          
     
CO:R:C:T 955029 CAB

CATEGORY:  Classification

TARIFF NO.:  6702.90.3500

District Director of Customs
1717 East Loop
Houston, Texas 77029

RE:  Request for Further Review of Protest No. 5501-93-100240,
dated June 29, 1993, concerning the classification of artificial
flowers

Dear Madam:

     This is a decision on application for further review of a
protest timely filed by Fred Hall & Associates, on behalf of Jobe
Enterprises, against your decision concerning the classification
of artificial flowers under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA).  No sample was submitted for
examination.  

FACTS:

     The protestant contests the denial of duty-free treatment
for artificial flowers from Macau under the Generalized System of
Preferences (GSP).  The protestant further maintains that the
subject merchandise should be classified under subheading
6702.90.4000, HTSUSA, at the special duty-free rate for products
of Macau under the GSP.  Since the date of the protest, June 29,
1993, the goods previously provided for under subheading
6702.90.4000, HTSUSA, are now classifiable under subheading
6702.90.3500, HTSUSA. 

ISSUE:

     Whether the artificial flowers from Macau are eligible for
duty-free treatment under the GSP?

LAW AND ANALYSIS:

     Based on the information provided, there is no dispute that
at the time of liquidation, the artificial flowers at issue were
properly classifiable under subheading 6702.90.4000, HTSUSA,
which provides for artificial flowers of man-made fibers.    

     Under the GSP, eligible articles, which are the growth,
product or manufacture of a designated beneficiary developing
country (BDC) and are imported directly into the customs
territory of the U.S. from a BDC may receive duty-free treatment
if the sum of (1) the cost or value of the materials produced in
the BDC, plus (2) the direct costs of the processing operations
in the BDC is equivalent to at least 35 percent of the appraised
value of the article at the time of entry.  See 19 USC 2463(b).  

     Macau is considered a BDC.  See General Note 4(a), HTSUSA.  
     
     Every subheading under Heading 6702, HTSUSA, is a GSP-
eligible provision.  Accordingly, the subject merchandise may be
eligible for duty-free treatment, if they are considered to be
"products of" Macau, the 35 percent value-content minimum is met,
and they are "imported directly" into the United States.  
     
     A memorandum was sent to the field dated October 31, 1991,
(INV 8-02 CO:TO:C JRD) from the Assistant Commissioner for
Commercial Operations which generally stated that entries of
artificial flowers claiming to be manufactured in Macau by
certain factories, including Luen Fat, the factory allegedly
producing the subject merchandise, should be denied GSP
treatment.  The memorandum further maintained that the Senior
Customs Representative, Hong Kong (SCR/HK) issued reports of
investigations concerning the alleged transshipment of artificial
flowers manufactured in China and transported to Macau.  These
reports explained that the named factories were either not
manufacturing artificial flowers in Macau, or were incapable of
manufacturing them in the quantities exported to the United
States.  Therefore, the Assistant Commissioner stated that in the
absence of "compelling evidence" to the contrary, protests filed
on the liquidation of entries from any of the named factories
should be denied.     

     In the instant case, the evidence submitted to substantiate
the protestant's claim is based generally on a letter from the
President of the importing company, Jobe Enterprises.  The letter
states that he, Mr. Jobe, visited the Luen Fat Factory and
personally watched workers making flowers on two different floors
in the factory.  The letter further states that Jobe Enterprises
only ordered one container holding fourteen items which took the
factory over two months to produce.  Therefore, Mr. Jobe fails to
understand why Customs concluded that the Luen Fat Factory was
incapable of producing a single container.    

     The protestant has failed to present any persuasive
"compelling evidence" that would lead Customs to conclude that
Luen Fat Factory has the capabilities to produce the amount of
merchandise in question.  As the artificial flowers are not
considered products of Macau, there is no need for Customs to
determine whether they meet the 35 percent value-content minimum,
and whether the goods are "imported directly" into the United
States.  Consequently, the protestant's claim is denied and the
artificial flowers are not entitled to duty-free treatment under
the GSP.

HOLDING:

     Based on the foregoing, the artificial flowers are not
entitled to duty-free treatment under the GSP and were properly
liquidated under 6702.90.4000, HTSUSA, without benefit of GSP
duty treatment, which provides for artificial flowers, foliage
and fruit and parts thereof; articles made of artificial flowers,
foliage or fruit, of man-made fibers.  The applicable rate of
duty is 9 percent ad valorem.  

     The protest should be denied in full.  A copy of this
decision should be attached to the Customs Form 19 and provided
to the protestant as part of the notice of action.

     In accordance with Section 3(A)(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject:  Revised Protest
Directive, this decision should be mailed by your office to the
protestant no later than 60 days from the date of this letter. 
Any reliquidation of the entry in accordance with the decision
must be accomplished prior to mailing of the decision.  Sixty 
days from the date of the decision the Office of Regulations and
Rulings will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Lexis, Freedom of
Information Act and other public access channels.  

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division