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HQ 086079


January 26, 1990

CLA-2 CO:R:C:G 086079 CRS

CATEGORY: CLASSIFICATION

TARIFF NO.: Chapter 61; 4417.00.8090

Mr. Peter Hagerty
Soviet American Woolens
RFD 1 Box 57
Kezar Falls, Maine 04047

RE: Knit Clothing; Knitting Needles

Dear Mr. Hagerty:

This is in reply to your letter dated November 13, 1989, in which you enquired as to the dutiable status of knit clothing and knitting needles to be imported from the Union of Soviet Socialist Republics.

FACTS:

Your company imports wool from the Soviet Union, blends this on an equal basis with U.S. wool to produce a two ply, worsted weight knitting yarn, which is then sold domestically. You state that you have recently formed a joint venture with a Soviet partner and describe two prospective import transactions which you expect to result therefrom. In the first of these, "plan A," your firm would ship knitting yarn to the Soviet Union, where your partner would manufacture clothing from the yarn and return the hand knit finished articles to the United States.

In the second scenario, "plan B," your company would export dowels to the Soviet Union. From these and a small wooden ball, you state that your Soviet joint venture partner would manufacture knitting needles, which would then be returned to the United States.

ISSUE:

What rates of duty apply to the articles in question and how is the duty determined.

LAW AND ANALYSIS:

The dutiable status of an article is dependent on its classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Articles are classified under the HTSUSA in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of articles is to be determined according to the terms of the headings and any relative section or chapter notes and, provided the headings or notes do not otherwise require, according to the remaining GRIs. taken in order.

Knit garments are classified in Chapter 61, HTSUSA, which covers articles of apparel and clothing accessories, knitted or crocheted. For example, sweaters, pullovers, sweatshirts, waistcoats (vests) and similar articles, knitted or crocheted, of wool or fine animal hair, wholly of cashmere, are classifiable in subheading 6110.10.10, HTSUSA. Pursuant to General Note 3 (b), HTSUSA, the special rates of duty in column 2 of the HTSUSA (non most-favored-nation) apply to imports from the Soviet Union. Thus, knit articles of the type listed above are subject to duty at a rate of 52 percent ad valorem. Other woolen sweaters are classifiable in subheading 6110.10.20, HTSUSA, and are dutiable at a rate of 54.5 percent ad valorem. Textile imports from the Soviet Union are not currently subject to quota.

However, without a detailed description of the clothing you plan to import we cannot be more specific. If you require a more definite answer, you should submit a ruling request containing a full and complete description of the articles you plan to import, together with samples. The publication entitled "District Rulings Program" outlines the procedure for requesting a ruling under the HTSUSA. Several other publications are also enclosed for your benefit. In addition, you may wish to consult a licensed customhouse broker.

The yarn your company exports to the Soviet Union may be eligible for drawback, or duty refund. Drawback is allowable upon the exportation of products which have been manufactured or produced in the United States with the use of imported or substituted merchandise of the same kind and quality. Title 19, United States Code, section 1313, the drawback law, requires that the processing performed by your firm in the United States must constitute a manufacture or production that transforms the goods into a new and different article having a distinctive name, character or use.

Although we are unable at this time to make a determination whether the blending operation you perform on the imported Soviet wool would constitute a manufacture or production within the meaning of the drawback law without a detailed description of the process, it would appear from the information provided that a new and different article has been produced.

You also ask what the duty would be on wooden knitting needles. There is no specific provision for knitting needles in the HTSUSA; however, knitting needles are a type of implement used to make clothing and other articles of wool. Webster's II New Riverside University Dictionary (1984), at 1217, defines the word "tool" as "a hand-held implement...used in accomplishing work."

Heading 4417, HTSUSA, covers tools, tool bodies, tool handles, broom or brush handles, of wood; boot or shoe lasts and trees, of wood. The articles in question are implements used to accomplish work, e.g. to make knit clothing. Thus it is Customs' position that knitting needles are a form of tool and, consequently, classifiable in heading 4417, HTSUSA.

HOLDING:

Knit clothing is classifiable in Chapter 61, HTSUSA. Various rates of duty apply depending on the nature of the articles in question.

Wooden knitting needles are classifiable in subheading 4417.00.8090, HTSUSA, under the provision for tools...of wood, other, other, and are dutiable at a rate of 33 1/3 percent ad valorem.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,


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