Proposed Change to a Customs Ruling 12 Years Later Demonstrate the Need to Use a Trade Advisor Who Advocates for the Client, Not Just Filing Forms

In Binding Ruling Letter NY N015943, of September 6, 2007, CBP classified a polyester/rayon woven fabric composed of 46.2% textured filament polyester, 8.8% spun polyester and 45% rayon staple fibers in heading 5407, HTSUS, specifically in subheading 5407.93.2090, HTSUSA, which provides for “Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics: Of yarns of different colors: Other: Other.” Rate of duty 12%

CBP has reviewed NY N015943 and has determined the ruling letter to be in error. It is now CBP’s position that the polyester/rayon woven fabric is properly classified, in heading 5516, HTSUS, specifically in subheading 5516.23.00, HTSUS, which provides for “Woven fabrics of artificial staple fibers: Containing less than 85 percent by weight of artificial staple fibers, mixed mainly or solely with man-made filaments: Of yarns of different colors.” Rate of duty 8.5%

CBP is proposing to revoke NY N015943 and to revoke or modify any other ruling not specifically identified to reflect the latest analysis. CBP is proposing to revoke any treatment previously accorded by CBP to substantially identical transactions. Before taking this action, consideration will be given to any written received by April 19, 2019.

It is well-known in the trade that when a fabric contains more than one fiber, it is classified according the predominate fiber by weight. In this case filament polyester, at 46.2% was the predominate fiber, so CBP classified in 5407 for woven fabric of filament fiber. BUT WAIT, before we consider the 4-digit Heading we need to know we are in the correct 2-digit Chapter. Chapter 54 is for filament, but if you add together the 8.8% spun polyester and the 45% rayon staple, the fabric is chief weight of staple fiber, which puts it in Chapter 55, according to CBP current opinion, which rules out 5407, leaving the only question which classification in Chapter 55 applies. Since the rayon, at 45% is greater than the 8.8 staple polyester, is it classified an artificial staple fiber.

FIRST LESSON? Tariff classification is tricky, and even CBP gets it wrong sometimes. David Trumbull of Agathon Associates is licensed by the U.S. Department of Homeland Security as a Customs Broker competent to determine tariff classifications and duty rates.

SECOND LESSION? It's not enough just to have a licensed broker. You need someone who will advocate for you and seek ways to reduce your import costs. In this case the broker was unsure of the classification and asked customs, got an answer that left his client paying 12% and now, a dozen years later, CBP says "Oops, it should have been 8.5%." Of course they will get the difference back, since it was CPS's error. However, a broker who also acted as a TRADE ADVISOR to the client, as Agathon Associates does, would have suggested the lower classification to CBP in the request for a ruling. It appears that the broker in this case did not, because we do not see, in the original, erroneous ruling, any discussion by CBP of why the broker's suggestion of the lower rate is incorrect, as we would expect to see had the broker made such an argument.