Classification of chenille yarn from Taiwan and the applicability of tariff subheading 9802.00.80

N230956 September 7, 2012 CLA-2-56:OT:RR:NC:N3:351 CATEGORY: Classification TARIFF NO.: 5606.00.0090, 9802.00.80 Chris Guo Texlink Import Companies, Inc. 6 Highfield Lane East Hills, NY 11577 RE: Classification of chenille yarn from Taiwan and the applicability of tariff subheading 9802.00.80 Dear Mr. Guo: In your letters dated July 16 and July 30, 2012, you requested a tariff classification ruling. We had to return your first letter for samples, which you have now supplied. In your most recent letter you submitted samples of a chenille yarn composed of three plies: the core yarn (two plies, each described as 300 denier polyester, extruded in the United States) and the core yarn (20/1 Ne, polyester, spun in Taiwan). You describe the procedures in Taiwan as follows: Procedures performed in Taiwan. Taking two ends of core yarn plus 1 end of effect yarn and twist into chenille yarn using a chenille machine. Final product is 100% polyester, consist of approx. 78% effect yarn and 22% Core yarn. The applicable subheading for the chenille yarn will be 5606.00.0090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for chenille yarn. The rate of duty will be 8% ad valorem. You ask if the chenille yarn is 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. Twisting the plies together is considered an allowable assembly process. Therefore, the chenille yarn that is created in Taiwan 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. 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 the World Wide Web at http://www.usitc.gov/tata/hts/. The samples will be retained as part of our official case file. 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, Thomas J. Russo Director National Commodity Specialist Division