CLA-2 RR:CR:TE 961461 jb
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.
FACTS:
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.
ISSUE:
Does the subject merchandise qualify for the Tariff
Preference Levels?
LAW AND ANALYSIS:
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.
HOLDING:
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.
Sincerely,
John Durant, Director
Commercial Rulings Division