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NY N010750




May 10, 2007

CLA2-RR:NC:N3:351

CATEGORY: CLASSIFICATION

Linda M. Rasco
Metro Customs Brokers
P.O. Box 1066
40 Miramar Dr., Ste. 12
Champlain, NY 12919

RE: Classification and country of origin determination for chenille yarn; 19 CFR 102.21(c)(5)

Dear Ms. Rasco:

This is in reply to your letter dated May 2, 2007, requesting a classification and country of origin determination for chenille yarn that will be imported into the United States. This letter was a follow-up to our classification ruling N008292, dated March 16, 2007, in which we requested information to enable us to make a country of origin determination. You have now supplied that information. This ruling request is on behalf of your client Polarknit, Inc., of North Vancouver, British Columbia.

FACTS:

The subject merchandise is a ball of chenille yarn.

You submitted a ball of the chenille yarn. The manufacturing operations for the yarn are as follows, as stated in your original letter: fabric is knit in China of 100% polyester filament yarns; your original letter referred to it as “a double velour (face and back).” Each roll of fabric is 68 inches wide by 45 yards long. The fabric is shipped from China to Polarknit’s facility in Vancouver, where it is cut into strips 4-6” wide. These strips are fed into a machine that cuts them into the finished yarn, approximately 1/4" wide. The yarn is then vacuumed to remove any loose fibers, wound on balls, packaged, and shipped to craft stores in the United States and Canada. The yarn is used in hand knitting.

You now have included new information that Polartec, LLC, the manufacturer of the fabric in China, states that the filaments are extruded in China. You also state that according to Polartec the fabric is a circular knit looped pile fabric. You believe that the yarn cut from this fabric cannot be a chenille yarn.

ISSUES:

What are the classification and country of origin for the subject merchandise?

CLASSIFICATION:

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the Harmonized Tariff Schedule of the United States (HTSUS) at the international level. With regard to chenille yarn, the EN to heading 5606 states, at (B):

CHENILLE YARN (INCLUDING FLOCK CHENILLE YARN)

Chenille yarn consists generally of two or more strands of textile yarn twisted together and gripping short ends of textile yarn that may be practically perpendicular to them; the strands are sometimes maintained in loops formed on a hosiery loom. In all cases, it looks like yarn tufted with pile threads throughout its length. It is usually manufactured directly on special looms (ring twister and Raschel knitting machines, for example) or by cutting up special leno fabric; in the latter process, after the fabric has been cut along either side of each group of warp threads, it is these warp threads (ground and crossing threads) which serve as support in the chenille yarn, and the weft which forms the pile.

The EN makes it clear that a chenille yarn may be cut from a fabric. The type or classification of the fabric is not relevant to the classification of the chenille yarn.

As we ruled in N008292, the applicable subheading for the chenille yarn will be 5606.00.0090, HTSUS, which provides for chenille yarn. The rate of duty will be 8% ad valorem.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

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, “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 chenille yarn 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, “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, “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 of those filaments . . . to heading . . . 5606 from any other heading, except from heading 5001 through 5007, 5401 through 5408, and 5501 through 5502, and provided that the change is the result of an extrusion process; or If the good is of staple fibers, a change of those fibers to heading . . . 5606 from any other heading, except from heading 5106 through 5110, 5204 through 5207, 5306 through 5308, and 5508 through 5511, and provided that the change is the result of a spinning process.”

The yarn in question is made of both filaments and staple fibers. The staple fibers are created by the cutting of the filament fiber fabric and they create the chenille effect in the yarn. The filaments change from heading 6001 (knit pile fabric) to heading 5606 by a cutting process, not an extrusion process (as the rule requires). In addition, the staple fibers do not change to heading 5606 by a spinning process, but by the same cutting process. Thus, the yarn does not satisfy this rule and Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) states,

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.

Although the fabric from which the yarn is cut is a knit fabric, the chenille yarn is not considered knit to shape for tariff purposes. In addition, it is not wholly assembled in a single country, so Section 102.21(c)(3) is inapplicable.

Section 102.21 (c)(4) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred.”

The yarn is made from a knit fabric. Neither the manufacture of the original filament yarn, the knitting of the fabric, nor the cutting of the fabric can be considered the single most important assembly or manufacturing process. A country of origin determination cannot be made based on Section 102.21(c)(4).

Paragraph (c)(5) states, “Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory or insular possession in which an important assembly or manufacturing process occurred.”

Accordingly, in the case of the subject chenille yarn, country of origin is conferred by the last country in which an important assembly or manufacturing process occurred, that is, Canada, where the knit fabric is cut to form the chenille yarns.

HOLDING:

The country of origin of the chenille yarn is Canada.

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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