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Eligibility of hand-knotted Nepalese woolen carpets for duty-free treatment under the Generalized System of Preferences; classification; quota
Issued August 20, 1993 by U.S. Customs and Border Protection.
Cite this ruling
Copies to clipboard55 557404 (August 20, 1993)
Tariff classification
HTS codes: 2131, 1993, 2463, 5701.10.2010
Product description
The carpets, at issue, consist of 100 percent wool yarn pile on a 100 percent cotton foundation. Wool from Nepal, New Zealand, and Tibet, and spun cotton from Nepal are used to make the carpets. The manufacturing process in Nepal includes carding the raw wool, spinning the raw wool into yarn, dyeing the yarn, simultaneously weaving the cotton foundation and knotting the woolen pile using traditional Tibetan rod-weaving techniques, shearing the finished carpet, and carving elements of the design. The carding and dyeing may be done by hand or by machine; all other stages of the process are done by hand.
CBP rationale
Under the GSP, eligible articles the growth, product or manufacture of a designated beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations performed in the BDC, is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the U.S. See 19 U.S.C. 2463(b). As stated in General Note 3(c)(ii)(A), Harmonized Tariff Schedule of the United States (HTSUS), Nepal is a designated BDC for purposes of the GSP. To determine whether an article will be eligible to receive duty-free treatment under the GSP, it must first be classified under a tariff provision for which a rate of duty of "Free" appears in the "Special" subcolumn followed by the symbol "A" or "A*." We find that the hand-knotted Nepalese woolen carpets are classifiable under subheading 5701.10.2010, HTSUS, which provides for carpets and other textile floor coverings, knotted, whether or not made up: of wool or fine animal hair: Other, hand-hooked, that is, in which the tufts were inserted and knotted by hand or by means of a hand tool. This is not a GSP-eligible provision. The textile quota category is 465. Therefore, because the carpets are not classified in a GSP-eligible provision, they may not receive duty-free treatment when imported into the U.S.
Full text
HQ 557404 August 20, 1993 CLA-2 CO:R:C:S 557404 MLR CATEGORY: Classification Mr. Pradeep Khatiwada First Secretary Royal Nepalese Embassy 2131 Leroy Place, N.W. Washington, D.C. 20008 RE: Eligibility of hand-knotted Nepalese woolen carpets for duty-free treatment under the Generalized System of Preferences; classification; quota Dear Mr. Khatiwada: This is in response to your letter dated June 4, 1993, requesting a ruling on the eligibility of hand-knotted Nepalese woolen carpets for duty-free treatment under the Generalized System of Preferences (GSP). A sample carpet was submitted with your request. FACTS: The carpets, at issue, consist of 100 percent wool yarn pile on a 100 percent cotton foundation. Wool from Nepal, New Zealand, and Tibet, and spun cotton from Nepal are used to make the carpets. The manufacturing process in Nepal includes carding the raw wool, spinning the raw wool into yarn, dyeing the yarn, simultaneously weaving the cotton foundation and knotting the woolen pile using traditional Tibetan rod-weaving techniques, shearing the finished carpet, and carving elements of the design. The carding and dyeing may be done by hand or by machine; all other stages of the process are done by hand. ISSUE: Whether the hand-knotted Nepalese woolen carpets are eligible for duty-free treatment under the GSP. LAW AND ANALYSIS: Under the GSP, eligible articles the growth, product or manufacture of a designated beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations performed in the BDC, is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the U.S. See 19 U.S.C. 2463(b). As stated in General Note 3(c)(ii)(A), Harmonized Tariff Schedule of the United States (HTSUS), Nepal is a designated BDC for purposes of the GSP. To determine whether an article will be eligible to receive duty-free treatment under the GSP, it must first be classified under a tariff provision for which a rate of duty of "Free" appears in the "Special" subcolumn followed by the symbol "A" or "A*." We find that the hand-knotted Nepalese woolen carpets are classifiable under subheading 5701.10.2010, HTSUS, which provides for carpets and other textile floor coverings, knotted, whether or not made up: of wool or fine animal hair: Other, hand-hooked, that is, in which the tufts were inserted and knotted by hand or by means of a hand tool. This is not a GSP-eligible provision. The textile quota category is 465. Therefore, because the carpets are not classified in a GSP-eligible provision, they may not receive duty-free treatment when imported into the U.S. HOLDING: Based on the information and sample submitted, we find that the hand-knotted Nepalese woolen carpets are classifiable under subheading 5701.10.2010, HTSUS, which is not a GSP-eligible provision. Because the carpets are subject to a quota, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements. Sincerely, John Durant, Director Commercial Rulings Division
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