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NY J87464




August 13, 2003

CLA2-RR:NC:N3:351 J87464

CATEGORY: CLASSIFICATION

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

RE: Classification and country of origin determination for two-ply chenille yarn; 19 CFR 102.21(c)(3)

Dear Ms. Isreal:

This is in reply to your letter dated July 7, 2001, and received in our office July 21, requesting a classification and country of origin determination for two-ply chenille yarn which will be imported into the United States.

FACTS:

The subject merchandise consists of two chenille yarns which are twisted together to form a two-ply chenille yarn.

The manufacturing operations for the two-ply yarn are as follows: a 100% polyester filament chenille yarn is manufactured in Taiwan, wound on a hank, dyed, and wound on a cone. Another chenille yarn, this one 100% acrylic staple fibers, is produced in the United States, said to be of originating materials, dyed, and wound on cones. Both of these are imported into Canada where they are twisted together (one twist per inch). This finished two-ply yarn is balled and put up for sale in balls of 10-50 grams. The finished yarn will be 64.9% polyester and 35.1% acrylic. No NAFTA claim has been made.

ISSUES:

What are the classification and country of origin of the two-ply yarn? Is the U.S. portion of the two-ply yarn eligible for duty-free allowance under subheading 9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTS)?

CLASSIFICATION:

The applicable subheading for the two-ply yarn will be 5606.00.0090, HTS, which provides for chenille yarn. The rate of duty will be 8.4 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at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996.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 subject merchandise 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

5606 If the good is of continuous filaments . . . a change from those filaments . . . to heading . . . 5606 from any other heading . . ., and provided that the change is the result of an extrusion process; or

5606 If the good is of staple fibers, a change of those fibers to heading . . . 5606 from any other heading . . ., and provided that the change is the result of a spinning process.

Since both chenille yarns from which the two-ply yarn is assembled are already classified in heading 5606, and since they are twisted together, not spun or extruded together, Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) states, in pertinent part, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:

(ii) . . . 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 it is wholly assembled in Canada, Section 102.21(c)(3) applies and the country of origin is Canada.

APPLICABILITY OF SUBHEADING 9802.00.80:

Since the twisting operation performed in Canada constitutes an assembly operation of U.S.-supplied raw materials, an allowance in duty can be made for the cost or value of the U.S.-supplied component (acrylic yarn) under tariff heading 9802.00.80. That is, upon importation into the United States, duty would be assessed upon the full value of the imported two-ply yarn, less the cost or value of the yarn supplied from the United States.

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. If you contemplate using any marking indicating the U.S. origin of the acrylic yarn, 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.

HOLDING:

The country of origin of the finished two-ply chenille yarn is Canada. A duty allowance under subheading 9802.00.80 is allowable.

The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. In the event there is a change in the facts previously furnished, this may affect the determination of country of origin. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

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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