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HQ 961461

September 28, 1998
CLA-2 RR:CR:TE 961461 jb


TARIFF NO.: 5606.00.0090

Mr. Chris Guo
Fiber Option Industries
300 Northern Boulevard, Suite 14
Great Neck, NY 11021

RE: Request for Reconsideration of NY C80857; eligibility under the North
American Free Trade Agreement (NAFTA) and Tariff Preference Levels (TPL) for chenille yarn

Dear Mr. Guo:

This is in response to your letter, dated February 26, 1998, requesting reconsideration of New York Ruling Letter (NY) C80857, dated February 18, 1998, which classified chenille yarn in heading 5606, Harmonized Tariff Schedule of the United States (HTSUS), and determined that the merchandise neither qualified under NAFTA nor for consideration under the Tariff Preference Levels (TPL). A sample of the raw material (spun cotton) in addition to the finished product (chenille yarn) were submitted to this office for examination.

As you do not hold issue with either the determination rendered with respect to the classification of this merchandise or its eligibility under NAFTA, we will not repeat those relevant analyses in this letter. This letter will only address the issue of the eligibility of this merchandise for the TPL.


In your letter you state that you are planning "on importing raw materials from the Far East (Acrylic- 1/40 Nm, 1/30Nm from Taiwan or Indonesia; Cotton- 20/1 Ne, 30/1 Ne from India or Pakistan; Rayon- 20/1 Ne; 30/1 Ne from Indonesia or Taiwan) and process them into chenille yarns in Mexico." The sample which was submitted to this office consists of a chenille yarn from Mexico composed of twisted strands of textile yarn which grip short ends of textile yarns or fibers thereby creating a caterpillar like effect.

You emphasize in your letter that the most critical process of transforming the spun cotton into chenille yarns takes place in Mexico where you state all of the added value takes place. Additionally, you state that based upon your discussions with a member of the Office of Regulations and Rulings, you were advised that the manufacturing operations performed in Mexico would qualify the merchandise for the TPL under subheading 9999.00.64.


Does the subject merchandise qualify for the Tariff Preference Levels?


Subheading 9999.00.64, HTSUSA, states, in relevant part:

The following provisions must be utilized in reporting textile and apparel goods imported from Canada or from Mexico under the terms of additional U.S. notes 3, 4 and 5 to section XI of the tariff schedule; and the goods described in these provisions must be reported in terms of their square meter equivalent, determined in accordance with such additional U.S. notes:

Imports of textile and apparel goods from Mexico under additional U.S. notes 3 (other than subdivision (c)), 4 and 5 to section XI:

Goods described in additional U.S. note 5(b) to section XI.

Additional U.S. note 5(b) to section XI states:

The rate of duty in the "Special" subcolumn of rates of duty column 1 followed by the symbol "MX" in parentheses shall apply to imports from Mexico, up to the annual quantities specified in subdivision (d) of this note, of cotton or man-made fibers yarns provided for in headings 5205 through 5207 or 5509 through 5511 that are spun in the territory of a NAFTA party from fiber of headings 5201 through 5203 or 5501 through 5507, produced or obtained outside the territory of one of the NAFTA parties.

In determining whether merchandise is eligible for the Tariff Preference Levels, a provision for reduced duty under NAFTA, the HTSUS provides specific rules to which a proper analysis must adhere. In most instances, and in the case of this particular merchandise, the rules explicitly require a specific tariff shift in order for the merchandise to qualify for a TPL.

Although you mention in your letter that you received oral advice from a Customs official indicating subheading 9999.0064, HTSUS, as the proper classification qualifying this merchandise for the TPL, we refer you to 19 CFR 177.1(b), which states that "oral opinions or advice of Customs Service personnel are not binding on the Customs Service". Although subheading 9999.0064, HTSUS, is the correct classification by which to proceed, the terms of that subheading, when applied to this merchandise, exclude the merchandise from qualifying for eligibility under the TPL.

As heading 5606, HTSUS, is not specifically provided for under the terms of this note, the present merchandise, which is classified in heading 5606, is not eligible for the TPL.


The subject chenille yarn was properly determined in NY C80857 not to qualify for the Tariff Preference Levels.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent negotiations and changes, we suggest that your client check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service which is updated weekly and is available at the local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, your client should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.


John Durant, Director
Commercial Rulings Division

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