CLA-2 CO:R:C:S 557404 MLR
Mr. Pradeep Khatiwada
First Secretary
Royal Nepalese Embassy
2131 Leroy Place, N.W.
Washington, D.C. 20008
RE: Eligibility of hand-knotted Nepalese woolen carpets for
duty-free treatment under the Generalized System of
Preferences; classification; quota
Dear Mr. Khatiwada:
This is in response to your letter dated June 4, 1993,
requesting a ruling on the eligibility of hand-knotted Nepalese
woolen carpets for duty-free treatment under the Generalized
System of Preferences (GSP). A sample carpet was submitted with
your request.
FACTS:
The carpets, at issue, consist of 100 percent wool yarn pile
on a 100 percent cotton foundation. Wool from Nepal, New
Zealand, and Tibet, and spun cotton from Nepal are used to make
the carpets. The manufacturing process in Nepal includes carding
the raw wool, spinning the raw wool into yarn, dyeing the yarn,
simultaneously weaving the cotton foundation and knotting the
woolen pile using traditional Tibetan rod-weaving techniques,
shearing the finished carpet, and carving elements of the design.
The carding and dyeing may be done by hand or by machine; all
other stages of the process are done by hand.
ISSUE:
Whether the hand-knotted Nepalese woolen carpets are
eligible for duty-free treatment under the GSP.
LAW AND ANALYSIS:
Under the GSP, eligible articles the growth, product or
manufacture of a designated beneficiary developing country (BDC)
which are imported directly into the customs territory of the
U.S. from a BDC may receive duty-free treatment if the sum of (1)
the cost or value of materials produced in the BDC, plus (2) the
direct costs of the processing operations performed in the BDC,
is equivalent to at least 35 percent of the appraised value of
the article at the time of entry into the U.S. See 19 U.S.C.
2463(b).
As stated in General Note 3(c)(ii)(A), Harmonized Tariff
Schedule of the United States (HTSUS), Nepal is a designated BDC
for purposes of the GSP. To determine whether an article will be
eligible to receive duty-free treatment under the GSP, it must
first be classified under a tariff provision for which a rate of
duty of "Free" appears in the "Special" subcolumn followed by the
symbol "A" or "A*." We find that the hand-knotted Nepalese
woolen carpets are classifiable under subheading 5701.10.2010,
HTSUS, which provides for carpets and other textile floor
coverings, knotted, whether or not made up: of wool or fine
animal hair: Other, hand-hooked, that is, in which the tufts
were inserted and knotted by hand or by means of a hand tool.
This is not a GSP-eligible provision. The textile quota category
is 465. Therefore, because the carpets are not classified in a
GSP-eligible provision, they may not receive duty-free treatment
when imported into the U.S.
HOLDING:
Based on the information and sample submitted, we find that
the hand-knotted Nepalese woolen carpets are classifiable under
subheading 5701.10.2010, HTSUS, which is not a GSP-eligible
provision. Because the carpets are subject to a quota, you
should contact your local Customs office prior to importation of
this merchandise to determine the current status of any import
restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division