CLA-2-57:S:N:N6:349 811371
Mr. Jeff Martin
Orian Rugs Inc.
P.O. Drawer 2276 - Highway 81 North
Anderson, South Carolina 29622
RE: The tariff classification of two rugs from Belgium.
Dear Mr. Martin:
In your letter dated May 30, 1995, received by this office
on June 8, 1995, you requested a tariff classification ruling.
You submitted two representative swatches of woven pile
rugs. Both rugs will be made of 100 percent olefin
(polpropylene) yarn for the pile surface, polyester/cotton warp
yarns, polyester fringe yarn, and jute wefts. The rugs have a
floral design formed by the pile yarn. One rug has green, beige,
and dusty rose colored pile yarns forming a floral design. The
upper surface of the other carpet consists of black, blue, pink,
and white pile yarns.
In your letter, you mention that you export United States
made BCF Olefin yarn and 3-ply polyester fringe yarn to Belgium.
In Belgium the yarn will be made into rugs. Attached to your
letter is a weight and percentage breakdown sheet. It is your
belief that since a large portion of the content of the rug is
made in the United States you would qualify for a duty rate
reduction. Please note, subheading 9802.00.80, Harmonized Tariff
Schedule of the United States (HTS), provides a partial duty
exemption for:
[a]rticles assembled abroad in whole or in part of
fabricated components, the product of the United States,
which (a) were exported in condition ready for assembly
without further fabrication, (b) have not lost their
physical identity in such articles by change in form,
shape, or otherwise, and (c) have not been advanced in value
or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating, and painting.
All three requirements of subheading 9802.00.80, HTS, must be
satisfied before a component may receive a duty allowance.
Customs has consistently held that the weaving process used to
manufacture fabrics is not regarded as an acceptable assembly
under subheading 9802.00.80, HTS, but rather, is a further
fabrication of the thread or yarn. The third example set forth
in 19 CFR 10.16(a) provides that:
[t]he manufacture abroad of cloth on a loom using thread or
yarn exported form the U.S. on spools, cops, or pirns is not
considered an assembly but a weaving operation, and the
thread or yarn does not qualify for the exemption.
In this case the U.S. yarn sent aboard has been woven to make the
rug and as such does not constitute an acceptable assembly
operation. The rugs are ineligible for partial duty exemption
under subheading 9802.00.80, HTS.
Also note, that if the olefin and polyester yarns are
provided free of charge or at a reduced cost to the Belgian
manufacturer, the yarns constitute on assist as defined in
Section 152 of the Customs Regulations (19 C.F.R. 152.102(a)).
Under section 152 of the Customs Regulations, to the extent that
the value of the assist is not otherwise included in the price
actually paid or payable for the merchandise, the value of the
assist must be added to the price paid or payable for the
merchandise in determining the transaction value of the imported
merchandise (19 C.F.R. 152.102, 19 C.F.R. 152.103).
The applicable subheading for the rugs will be 5702.42.1000,
Harmonized Tariff Schedule of the United States (HTS), which
provides for carpets and other textile floor coverings, woven,
not tufted or flocked, whether or not made up, including "Kelem",
"Schumacks", "Karamnie" and similar hand-woven rugs: other, of
pile construction, made up: of man-made textile materials: Wilton
(including brussels) and velvet (including tapestry) floor
coverings and floor coverings of like character or description.
The rate of duty will be 9 percent ad valorem.
This ruling is being issued under the provisions of Section
177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport