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NY J87243





September 12, 2003

CLA-2-54:RR:NC:N3:351 J87243

CATEGORY: CLASSIFICATION

TARIFF NO.: 5406.10.0020, 5511.20.0000

Joanne Israel
Willson International Inc.
27247 Northline Road
Taylor, MI 48180

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of yarns from Canada; Article 509

Dear Ms. Israel:

In your letter dated August 20, 2003, you requested a ruling on behalf of your client Spinrite, Inc., of Listowel, Ontario, Canada, on the status of yarns from Canada under the NAFTA.

You submitted samples of two yarns. The first, Patons Divine, Item #241006, is a twisted yarn of 79.7% acrylic staple fibers, 17.8% mohair, and 2.5% polyester. It is less than 85% synthetic fibers. The decitex is approximately 7700. The ball weighs approximately 104 grams. By virtue of the weight and decitex, the yarn meets the tariff definition of “put up for retail sale” found in Note 4, Section XI, Harmonized Tariff Schedule of the United States (HTS).

The acrylic fibers are received in Canada by Spinrite in the form of tops (tops are longer fibers taken in the process of combing staple fibers) from Great Britain. The mohair, a fine animal hair, is also received in tops from Great Britain. The polyester is of Canadian origin. Spinrite processes the fibers as follows: blending, gilling, roving, fancy twisting-spinning, brushing, balling, and packaging. The components and processes are taken from your letter.

The applicable tariff provision for the yarn Divine will be 5511.20.0000, HTS, which provides for yarn (other than sewing thread) of man-made staple fibers, put up for retail sale, of synthetic staple fibers, containing less than 85 percent by weight of such fibers. The general rate of duty will be eight percent ad valorem.

The merchandise does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/55, HTS, which requires a “change to headings 5501 through 5511 from any other chapter . . . .”

The acrylic, imported in the form of tops, is classified in chapter 55, and thus does not undergo the required change.

The country of origin, then, must be determined.

Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the 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 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

5508-5511 A change to heading 5508 through 5511 from any heading outside that group, provided that the change is the result of a spinning process.

The staple fibers that make up the yarn are not classified in the group (headings 5508-5511) and undergo a spinning process in Canada. Accordingly, Section 102.21(c)(2) applies and the country of origin of the yarn Divine is Canada. (Please note that the 2.5% polyester is considered de minimus and is not part of the determination, according to Section 102.13(c)).

The second yarn is Patons Brilliant, Item #246103. The filament yarn is produced in Taiwan and is composed of 65% acrylic, 22% nylon, and 13% polyester; the polyester is in the form of plasticized strip that meets the tariff definition of textile. You submitted a ball marked “sample,” but we assume this to be the size of the actual importation; it weighs less than 85 grams. A simple desk test reveals the decitex to be approximately 2000. This yarn also meets the tariff definition of “put up for retail sale.”

The applicable tariff provision for the yarn Brilliant will be 5406.10.0020, which provides for man-made filament yarn (other than sewing thread), put up for retail sale, synthetic filament yarn, of acrylic. The general rate of duty will be eight percent ad valorem.

You ask if the balling and packaging in Canada of the yarn made in Taiwan are sufficient to qualify for NAFTA. The merchandise does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/54, HTS, which requires a “change to headings 5401 through 5406 from any other chapter . . . .”

The country of origin of the yarn produced in Taiwan is Taiwan, as that is where the above tariff change presumably occurs.

Subheading 5406.10.0020 falls within textile category designation 200. Based upon international textile trade agreements products of Taiwan are subject to quota and the requirement of a visa.

The designated textile and apparel categories and their quota and visa status are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information, we suggest that you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, which is available at our Web site at www.cbp.gov. In addition, 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 and should also be verified at the time of shipment.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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 Mitchel Bayer at 646-733-3102.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, Bureau of Customs and Border Protection, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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