CLA 2-OT:RR:NC:N3:351
David Wrench
SDV (USA) Inc.
114 Southfield Parkway, Suite 110
Forest Park, GA 30297
RE: Classification and country of origin determination for filament yarn; 19 CFR 102.21(c)(2); tariff shift
Dear Mr. Wrench:
This is in reply to your letter dated March 17, 2011, requesting a classification and country of origin determination for filament yarn that will be imported into the United States. No sample was submitted with your request.
FACTS:
The subject merchandise consists of multifilament yarn. It is described as flat Torcon™ PPS, which is described as follows on the company’s website (http://www.toray-auto.us/ products/torcon.html):
PPS (Polyphenylene Sulfide) is a high-performance engineering plastic, with excellent heat resistance, chemical resistance, and flame retardant properties. From PPS polymer, Toray produces a PPS fiber, called TORCON™
This is a synthetic fiber for tariff purposes. Note 1(a) to Chapter 54, Harmonized Tariff Schedule of the United States (HTSUS), noted.
Your correspondence further describes the yarn as 200 denier, 50 filament, with a 6.1 “Z” twist.
The manufacturing operations for the yarn are as follows: The PPS yarn is extruded in Japan and exported to Canada where it is processed “by twisting and steam setting.”
ISSUE:
What are the classification and country of origin of the subject merchandise? You also seek valuation advice.
CLASSIFICATION:
The yarn will be classified in heading 5402, Harmonized Tariff Schedule of the United States (HTSUS). We are unable to classify it in any specific subheading because we lack certain information. (We will still be able to determine the country of origin; see below.) If you would like a classification ruling, please supply the following information regarding the yarn as imported from Canada into the United States:
Is the yarn a single or multiple yarn?
You state that in Canada, the yarn will be twisted and steam set. Is this yarn considered a textured yarn? Please note that twisting and heat-setting are both considered, for tariff purposes, to be processes of texturizing.
How many turns per meter in the finished yarn?
Submit a sample of the yarn.
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 merchandise 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
5401-5406 A change to heading 5401 through 5406 from any other heading, provided that the change is the result of an extrusion process.
As the yarn is extruded as filaments in a single country, that is, Japan, as per the terms of the tariff shift requirement, country of origin is conferred in Japan.
VALUATION:
You have also inquired as to the value of the imported yarn. You state the following: “The supplier [in Japan, we presume] invoices the value of the yarn. The additional process is invoiced separately by the processor [in Canada].”
You ask us to confirm that “The value of the yarn upon import is the total payable value invoiced by the supplier plus the value invoiced by the processor.”
The primary basis of valuation for duty assessment purposes of imported merchandise is transaction value. The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States plus amounts for packing costs, selling commissions, assists, royalties or license fees and the proceeds of any subsequent resale that accrue to the seller. The price is exclusive of international freight, insurance and other costs relating to the international shipment of the yarn from the country of exportation, in this case, Canada, to the place of importation in the U.S. The cost must include all costs from the supplier in Japan, including all shipping costs, etc., (as enumerated above) involved in transporting the goods from Japan to Canada. Section 402(b)(1) of the Trade Agreements Act of 1979 (codified at 19 U.S.C. 1401a), noted.
HOLDING:
The country of origin of the yarn is Japan.
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
National Commodity Specialist Division