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NY C83246




February 24, 1998

CLA-2-RR:NC:TA:351 C83246

CATEGORY: CLASSIFICATION

Mr. Chong-Do Lee
Kiju Co.
Rm. M201 Namkyung Bldg.
#37, Seobinggo-Dong, Yongsan-Ku
Seoul, Korea

RE: Classification and country of origin determination for yarn produced in the United States and then sent to Korea for winding and twisting. 19 CFR 102.21(c)(3).

Dear Mr. Lee:

This is in reply to your letter dated January 6, 1998, requesting a classification and country of origin determination for yarn supplied from the United States and sent to Korea for winding and twisting. No sample was submitted.

FACTS:

While no sample was furnished, you write requesting an origin ruling of yarn supplied by Monsanto Company, U.S.A. which is sent to Korea for winding and twisting. Specifically, the yarn is 100% Nylon 6/6 LDI (Filament Yarn) Type 100D/50/C02, 58.488cN/tex, that is sent to Korea for the following processing operations:

1) Twisting 12 times per inch with dimension "S" combined two ply yarn after twisting 14 times with Dimention "Z" each yarn.

2) Winding to cocoon shape by automatic precision cop winder with high technology.

Finally, the yarn is returned to the United States where you wish to know the classification and country of origin.

ISSUE:
What is the classification and country of origin of the subject merchandise?

CLASSIFICATION:

The applicable subheading for the yarn is 5402.10.6000 Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for synthetic filament yarn (other than sewing thread), not put up for retail sale, ... high tenacity yarn of nylon or other polyamides, multiple (folded) or cabled. The duty rate is 8.7 percent ad valorem.

The yarn falls within textile category designation 606. The designated textile and apparel categories may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes. To obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject yarn is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each of the foreign materials incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:"

Paragraph (e) in pertinent part states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section":

HTSUS Tariff shift and/or other requirements

5402.10.6000 A change to heading 5401 through 5406 from any other heading, provided that the change is the result of an extrusion process.

The subject yarn, obviously, does not meet this important tariff shift requirement. Since this change is excluded by the rule, Section 102.21(c)(2) is inapplicable and our hierarchical application of Section 102.21(c) continues.

Section 102.21(c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

The twisting of yarn is considered an assembly operation, (HRL 555594 LS of May 16, 1990 noted), however, this yarn, being supplied from the United States leads us to the following criteria governing the rule of origin for this merchandise. Specifically, CR 12.130(c)(1) reads in part "Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposed of the Tariff Act of 1930, amended". Accordingly, Korea is the country of origin.

HOLDING:

The country of origin of the yarn is Korea. Based upon international textile trade agreements products of Korea are subject to the quota and the requirement of a visa.

This yarn should be marked "Product of Korea".

Since the operations performed in Korea constitutes an assembly operation of U.S. Supplied raw materials, an allowance in duty can be made for the cost or value of the U.S. supplied components (yarn) under tariff heading 9802.00.80. That is, upon importation into the United States, duty would be assessed upon the full value of the imported article, less the cost or value of the yarn supplied from the United States.

The holding set forth above applies only to the specific factual situation and merchandise identified in this ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This sections states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist George Barth at 212-466-5884.

Sincerely,

Robert B. Swierupski
Director,

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