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NY M83104

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May 17, 2006

CLA-2:RR:NC:N3:351 M83104

CATEGORY: CLASSIFICATION

Chandri Navarro-Bowman
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004-1109

RE: RE: Central American Free Trade Agreement; Yarn Wholly Formed in the United States

Dear Ms. Navarro-Bowman:

In your letter dated May 1, 2006, on behalf of your client, INVISTA S.a r.l. (hereinafter Invista), you requested a ruling on the status under the Central America Free Trade Agreement (CAFTA) for elastomeric yarn.

You state that Invista manufactures Lycra® fibers and yarns at a facility in Waynesboro, Virginia. Lycra® are spandex fibers produced by a solution dry spinning process. An isocyanate terminated prepolymer is formed by the reaction of a polyether glycol with MDI. This prepolymer is put into a solution with DMAc and then reacted with a diamine at near stoichiometry and a small amount of monofunctional amine to control final polymer molecular weight. Additives are then mixed in to provide certain desirable properties to the final product. The fibers are formed in the spinning process where the solution is extruded into filaments in an inert gas and the DMAc solvent is removed. A finish is applied to the fibers to aid in the downstream processing.

In Invista’s Waynesboro facility, the yarn is wound onto cardboard tubes. The tubes are packed into cardboard cartons with 30 to 100 tubes per carton. The cartons are then packed onto pallets and shipped to Mexico where the tubes are removed from the cartons and loaded onto a creel (or frame). There are about 1400 to 1600 tubes set onto each creel. The ends are then wound onto a large metal beam; this process is known as “beaming.” The yarns on the beams are then sold to fabric mills in the U.S. or in a CAFTA beneficiary country. It is made into fabric that will be used to manufacture garments in El Salvador, a CAFTA beneficiary country; the garments will be shipped to the U.S.

Your letter asks that we determine whether or not the yarn that is manufactured in the United States and repackaged in Mexico will be considered “wholly formed” in the U.S. under CAFTA.

According to General Note 17(d)(ii)(B) of Harmonized Tariff Schedule of the United States (HTSUS),
a yarn is wholly formed in the territory of a party to the Agreement if all of the production processes and finishing operations, starting with the extrusion of filaments, strips, film or sheet, and including slitting a film or sheet into strip, or the spinning of all fibers into yarn, or both, and ending with a finished yarn or plied yarn, took place in the territory of a party to the Agreement.

The subject Lycra® yarns are manufactured in the United States with all of the production processes, starting with the extrusion of the filaments and ending with a yarn, taking place at Invista’s Waynesboro facility. The beaming of the yarns in Mexico is to convert the packaging of the yarn from single end to multiple ends.

In essence the action that occurs to the subject yarns in Mexico is a repackaging process. Since there are no production processes that occur in Mexico affecting the yarn formation nor is there any sort of chemical property change to the yarn that occurs as a result of the repackaging, the subject Lycra® yarns would be considered “wholly formed” in the United States for purposes of CAFTA.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

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.

Sincerely,

Robert B. Swierupski
Director,

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