CLA-2-52:RR:NC:N3:351
Graciela Garza
Corrigan Dispatch Co.
Box 1240
Laredo, TX 78042-1240
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of cotton yarn; Article 509
Dear Ms. Garza:
In your letter dated March 6, 2007, on behalf of Cone Denim LLC of Greensboro, North Carolina, you requested a ruling on the status of cotton yarn processed in the United States under the NAFTA. You import jeans from Mexico but have asked us to rule whether or not the yarn used in the jeans is originating for purposes of NAFTA eligibility. If you wish a ruling on the NAFTA eligibility of the jeans, please submit a specific request for such a ruling, citing this ruling in your request; please include a sample of the jeans with such a request.
You state that Cone Denim imports from Taiwan polyester filament elastomeric yarn, which is classified within heading 5402, Harmonized Tariff Schedule of the United States (HTSUS), which provides for synthetic filament yarn (other than sewing thread), not put up for retail sale. In the United States, the polyester filaments are used as a core yarn and are covered with cotton staple fibers to produce a core spun yarn, a single yarn, of either 80% cotton or 72% cotton. The spools you submitted to us are well in excess of the definition of the term “put up for retail sale” as defined in Note 4 to Section XI, HTSUS.
You state the nE to be either 6.97 or 9.8, which convert to 11.8nm and 16.6nm, respectively. We assume the cotton fibers are uncombed.
The applicable tariff provision for the 11.8nm cotton core spun yarn will be 5206.11.0000, HTSUS, which provides for cotton yarn (other than sewing thread), containing less than 85 percent by weight of cotton, not put up for retail sale, single yarn, of uncombed fibers, not exceeding 14 nm. The applicable tariff provision for the 16.6nm cotton core spun yarn will be 5206.12.0000, HTSUS, which provides for cotton yarn (other than sewing thread), containing less than 85 percent by weight of cotton, not put up for retail sale, single yarn, of uncombed fibers, exceeding 14 nm but not exceeding 43 nm. The general rate of duty for both will be 9.2% 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/.
In your letter, you state your belief that the country of origin of this yarn is the United States and based on that you believe the yarn would be NAFTA-eligible. However, as noted above, country of origin alone does not confer NAFTA eligibility. Also, your letter did not request a country of origin ruling and we have not determined the country of origin of the yarn.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. GN 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
The core spun cotton yarn does not qualify for as "goods originating in the territory of a NAFTA party" because none of the above requirements are met. For your information, GN 12(t)/Chapter 52, which would cover the core spun cotton yarn, requires the following, at (1.):
A change to headings 5201 through 5207 from any other chapter, except from headings 5401 through 5405 or 5501 through 5507 [emphasis added].
As stated above, the cotton yarn is created using a polyester elastomeric filament yarn of heading 5402 and thus would not meet the change in tariff classification required.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
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.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division