CLA 2-OT:RR:NC:N3:351
Nancy deVries C.C.S.
Spinrite, Inc.
320 Livingstone Avenue South
Listowel, Ontario, Canada N4W 3H3
RE: Classification of acrylic yarn processed in Canada and returned to the United States
Dear Ms. deVries:
This is in reply to your letter dated June 8, 2011, requesting a classification for acrylic yarn that will be re-imported into the United States after processing in Canada.
The subject merchandise consists of four-ply twisted staple fiber acrylic yarn. No sample was included but you state that the yarn and the circumstances of its production are the same as in New York Ruling Letter N085359, issued to you on Dec. 3, 2009. In that ruling, the yarn was described as follows:
The manufacturing operations for the yarn are as follows: The fibers are imported into the United States from Portugal in the form of acrylic tow (of Harmonized Tariff Schedule of the United States (HTSUS) heading 5501) or staple fibers carded, combed, or otherwise prepared for spinning (of heading 5506). The yarn is spun in the U.S. and wound onto 10-lb. cones. Our examination indicates that the yarn is approximately 5600 decitex. These cones of U.S.-made yarn are exported to Canada where the yarn is rewound into various size balls weighing between 50 and 400 grams. These balls of yarn are labeled and imported into the U.S. According to the terms of Note 4(A)(b)(iii) to Section XI, HTSUS, these balls of yarn are considered “put up for retail sale.”
In N085359 we determined that the applicable subheading for the four-ply twisted staple fiber acrylic yarn that is imported into the U.S. from Canada in balls weighing between 50 and 400 grams is 5511.10.0030, HTSUS, which provides for yarn (other than sewing thread) of man-made staple fibers, put up for retail sale, of synthetic staple fibers, containing 85 percent or more by weight of such fibers, acrylic or modacrylic. The general rate of duty for that provision is 7.5% ad valorem. We also determined that the country of origin of the yarn is conferred in the United States.
N085359 went on to discuss the processing that occurs to the finished yarn in Canada:
The despooling, cutting to length, rewinding, and repackaging of the U.S.-origin yarn in Canada is considered an alteration under the terms of subheading 9802.00.50, HTSUS. Subheading 9802.00.50 provides for the assessment of duty on the value of repairs or alterations performed on articles returned to the U.S. after having been exported for that purpose provided that the documentary requirements of section 181.64 (for articles returned from Canada or Mexico) of the CBP Regulations (19 CFR §§ 181.64) are satisfied.
Goods entitled to classification in subheading 9802.00.50 treatment after having been repaired or altered in Canada are subject to duty upon the value of the repairs or alterations using the applicable NAFTA “CA” rate set forth in the applicable HTSUS tariff provision describing the good. Chapter 98, Subchapter II, U.S. Note 3(d) states:
For the purposes of subheadings 9802.00.40 and 9802.00.50, the rates of duty in the “Special” subcolumn of column 1 followed by the symbol “CA” or “MX” in parentheses shall apply to any goods which are returned to the United States after having been repaired or altered in Canada or in Mexico, respectively, whether or not such goods are goods of Canada or goods of Mexico under the terms of general note 12 to the tariff schedule.
Since there is a CA after the Free in the Special subcolumn for subheading 5511.10.0030, HTSUS, there will be no duty on the cost (or value) of the processing performed in Canada.
The applicable Chapter 98 subheading for the yarn processed in Canada as described above will be 9802.00.5060, HTSUS, which provides for “Other” Repairs or alterations, not made pursuant to a warranty. The rate of duty will be free under the terms of U.S. Note 3 to Chapter 98, Subchapter II.
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/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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