CLA-2-56:OT:RR:NC:N3:351
Ms. Analisa Coria
UPS Trade Management Services, Inc.
19701 Hamilton Ave., Suite 250
Torrance, CA 90502
RE: Classification and country of origin determination for gimped elastomeric filament yarns; 19 CFR 102.21(c)(3)
Dear Ms. Coria:
This is in reply to your letter dated August 6, 2012, requesting a classification and country of origin determination for gimped elastomeric filament yarns which will be imported into the United States. Your request was filed on behalf of your client, Regal Yarns, of Hickory, N.C.
FACTS:
The subject merchandise consists of gimped elastomeric filament yarns.
In your letter you submitted samples of three gimped elastomeric filament yarns, styles 20020, 52707, and 60182. With each you also submitted samples of the two component filaments, the elastomeric (Lycra®) core yarn and the nylon covering yarn.
The manufacturing operations for the gimped elastomeric filament yarns are as follows: in each case, the elastomeric (i.e., spandex) yarns are manufactured in the United States. The covering yarns, flat nylon filaments, are manufactured in Israel. All of the nylon and spandex filaments are classifiable in within headings 5402 through 5404, Harmonized Tariff Schedule of the United States (HTSUS).
Both component filament yarns are shipped to Colombia where they are combined to form the finished gimped elastomeric filament yarns. The three gimped yarns vary in size but are otherwise essentially the same. All of the finished yarns will be used in the U.S in the manufacture of hosiery (including embolism hosiery) and spandex shorts and tops.
ISSUES:
What are the classification and country of origin of the subject merchandise?
CLASSIFICATION:
The applicable subheading for the gimped elastomeric filament yarns, styles 20020, 52707, and 60182, will be 5606.00.0010, HTSUS, which provides for gimped yarn, containing elastomeric filaments. The general rate of duty will be 8% 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/.
You ask if the gimped yarns are entitled to a duty reduction under subheading 9802.00.80, HTSUS, which provides a partial duty exemption for:
Articles 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 (a, b, and c, above) of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full value of the imported article, less the cost or value of such U.S. components assembled therein, upon compliance with the documentary requirements of Section 10.24, Customs Regulations (19 C.F.R. 10.24).
Section 10.14(a) Customs Regulations (19 C.F.R. 10.14(a)) states that the components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly before, during, or after their assembly with other components. Section 10.16(a) Customs Regulations (19 C.F.R. 10.16(a)) provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components. Operations incidental to the assembly process are not considered further fabrication operations if they are of a minor nature.
Gimping is considered an allowable assembly process. Therefore, the gimped yarns that are created in Colombia may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components incorporated therein, upon compliance with the documentary requirements of 19 C.F.R. 10.24.
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
5606 If the good is of continuous filaments, including strips, a change of those filaments, including strips, to heading 5605 through 5606 from any other heading, except from heading 5001 through 5007, 5401 through 5408, and 5501 through 5502, and provided that the change is the result of an extrusion process [emphasis added]. . . .
As stated above, the nylon and spandex filaments are classified within headings 5402 through 5404, HTSUS, so the finished gimped yarn does not meet the terms of the tariff shift and thus Section 102.21(c)(2) is inapplicable.
Section 102.21(c)(3) states,
Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:
(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or
(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.
The subject merchandise is not knit to shape but the yarns are wholly assembled in a single country. Accordingly, the country of origin of the gimped elastomeric filament yarns is Colombia.
HOLDING:
The country of origin of the gimped elastomeric filament yarns is Colombia.
The samples will be retained as part of our official case file.
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,
Thomas J. Russo
Director
National Commodity Specialist Division