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NY 814434

September 8, 1995

CLA-2-54:S:N:N6:351 814434


TARIFF NO.: 5402.32.3000

Mr. P. Todd Fredette
A.N. Deringer Inc.
173 West Service Road
Champlain, NY 12919

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

Dear Mr. Fredette:

In your letter dated August 29, 1995 you requested a ruling on behalf of Finlay Products Limited, on the status of textured nylon yarn from Canada under the NAFTA. You have enclosed a letter dated June 29, 1995 from the Canadian seller Finlay Products Limited, and a letter dated July 10, 1995 from NSO Resins Incorporated, the United States user of this yarn.

You have also enclosed a two-pound spool of single-ply 100% nylon textured yarn, which Finlay and NSO both refer to as "solution-dyed nylon BCF." Finlay's letter states that this yarn is "from a Canadian producer;" we will assume for purposes of this ruling that this means that the yarn was extruded and textured in Canada, and that all subsequent processes occurred in Canada.

Finlay's letter states that this yarn is "culled out of shipments from a Canadian producer and represents the quantity that we cannot sell as yarn due to specific colours, quality defects, small packages etc." The letter also states that "NSO Resins take(s) the yarn off the tube, and melt(s) the resultant product to reform resin pellets that are sold to the injected moulded plastic market."

Finlay suggests that this yarn should be classified as waste of man-made fibers (of nylon) under tariff item 5505.10.2000. According to the Harmonized System Explanatory Notes (heading 5505), yarn wastes are "broken, knotted or tangled yarns collected as waste during the spinning, doubling, reeling, weaving, knitting, etc., operations." This yarn, although apparently of inferior quality, does not fit this description and is not classified as a waste product.

The applicable tariff provision for the yarn will be 5402.32.3000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for textured yarn; of nylon or other polyamides, measuring per single yarn more than 500 decitex; single yarn. The general rate of duty will be 9.8 percent ad valorem.

Assuming that the yarn is extruded and textured in Canada, and that all subsequent processes occur in Canada, each of the non-originating materials used to make the yarn has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/54. The yarn will be entitled to a 3 percent ad valorem rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.


Jean F. Maguire
Area Director

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