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NY K80732




November 25, 2003

CLA2-RR:NC:N3:351 K80732

CATEGORY: CLASSIFICATION

TARIFF NO.: 5406.10.0020

Joanne Burke
Willson International, Inc.
One Heritage Place
Southgate, MI 48195

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

Dear Ms. Burke:

In your letter dated Nov. 14, 2003, you requested a ruling, on behalf of your client, Spinrite Inc., of Canada, on the status of acrylic yarn from Canada under the NAFTA.

You submitted a skein of yarn which you refer to as Bernat Ping Pong, part # 161051, and state that it is 92.85% acrylic and 7.15% nylon. Our examination reveals it to be composed of filament yarns and strip that meets the tariff definition of textile. You state that the decitex is 9434 and that the yarn will be imported in 50-gram balls. By virtue of these facts, the yarns meet the tariff definition of “put up for retail sale.”

You state that the following is the process by which the yarn is formed: A yarn of 75% nylon/25% acrylic is manufactured in Taiwan. This yarn, which would be classifiable in Chapter 54, HTS, is shipped to Canada, where it is twisted with a 100% acrylic yarn spun in Canada from acrylic manufactured in the United Kingdom.

CLASSIFICATION:

The applicable tariff provision for the acrylic yarn will be 5406.10.0020, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), 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.

COUNTRY OF ORIGIN - LAW AND ANALYSIS:

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at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996.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 yarns are 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

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

Accordingly, as the foreign materials incorporated in the yarns are not formed in a single country, territory, or insular possession, Section 102.21(c)(2) is inapplicable.

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.

As the subject merchandise is not knit to shape, and the good was wholly assembled in a single country (Canada), Section 102.21(c)(3) applies and the country of origin is Canada.

Please note that separate Federal Trade Commission marking requirements exist regarding country of origin, fiber content, and other information that must appear on many textile items. You should contact the Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C., 20580, for information on the applicability of these requirements to this item.

NAFTA ELIGIBILITY

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, HTSUSA, which requires, in pertinent part, a change to heading 5406 from any other chapter. As the Taiwanese yarn is classifiable in chapter 54, the necessary change does not occur.

HOLDING

The country of origin of the acrylic yarn, Bernat Ping Pong, is Canada. The classification of this yarn is in subheading 5406.10.0020, HTS. The yarn does not qualify for preferential treatment under the NAFTA.

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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