Proposed Modification of Two Ruling Letters and Proposed Revocation of Treatment Relating to the Tariff Classification of Cotton Core-Spun Yarns

In Binding Ruling NY N304396, CBP classified cotton core-spun yarn in heading 5606, HTSUS, specifically in subheading 5606.00.00, HTSUS, which provides for "[g]imped yarn, and strip and the like of heading 5404 or 5405, gimped (other than those of heading 5605 and gimped horsehair yarn); chenille yarn (including flock chenille yarn); loop wale yarn.” CBP has reviewed NY N304396 and has determined the ruling letter to be in error. It is now CBP’s position that cotton core-spun yarn is properly classified in heading 5205, HTSUS, specifically in subheading 5205.12.10, HTSUS, which provides for "[c]otton yarn (other than sewing thread), containing 85 percent or more by weight of cotton, not put up for retail sale: Single yarn, of uncombed fibers: Exceeding 14 nm but not exceeding 43 nm: Unbleached, not mercerized."

In Binding Ruling In NY N304440, CBP classified cotton core-spun yarn in heading 5606, HTSUS, specifically in subheading 5606.00.00, HTSUS, which provides for "[g]imped yarn, and strip and the like of heading 5404 or 5405, gimped (other than those of heading 5605 and gimped horsehair yarn); chenille yarn (including flock chenille yarn); loop waleyarn." CBP has reviewed NY N304440 and has determined the ruling letter to be in error. It is now CBP's position that cotton core-spun yarn is properly classified in heading 5206, HTSUS, specifically in subheading 5206.32.00, HTSUS, which provides for "[c]otton yarn (other than sewing thread), containing less than 85 percent by weight of cotton, not put up for retail sale: Multiple (folded) or cabled yarn, of uncombed fibers: Exceeding 14 nm but not exceeding 43 nm per single yarn."

CBP is proposing to modify [beginning on page 39] NY N304396 and NY N304440 and to revoke or modify any other ruling not specifically identified to reflect the analysis contained in the proposed Headquarters Ruling Letter H311461. Additionally, 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 comments timely received.

In proposing these revocations, CBP states:

"CBP has held that gimped yarns and core-spun yarns are different and should be classified in different headings. See NY 866313, dated August 28, 1991 (stating the core spun yarns are not considered to be gimped yarns). Pursuant to EN to 56.06, a gimped yarn consists of a yarn, around which is wrapped spirally another yarn or filament or strip. It is distinguished from a twisted yarn in that the core yarn does not twist with the yarn that is wrapped around it; the surrounding yarn could be unwrapped and the core yarn would remain intact.

"Core-spun yarns are often confused with gimped yarns. They differ in that they consist of a core (usually a monofilament or multifilament yarn), around which fibers (not yarns) are wrapped. A common example is a spandex filament core with a wrapping of cotton fibers. Since it is sometimes difficult for the unaided eye to distinguish fibers wrapped around a core from yarn wrapped around a core, it may be necessary to request laboratory analysis to identify such yarns. Core-spun yarns are not classified as gimped yarns but rather as basic yarns in the appropriate provisions in chapters 50–55 (depending on chief weight, generally). See CBP’s Informed Compliance Publication (“ICP”), What Every Member of the Trade Community Should Know About: Classification of Fibers and Yarns under the HTSUS, dated September 2011. The Dictionary of Fiber & Textile Technology also describes core-spun yarn as 'a yarn made by twisting fibers around a filament or a previously spun yarn, thus concealing the core.' See Dictionary of Fiber & Textile Technology, 44 (1999)."

Comments must be received on or before April 9, 2021.

Tariff Classification of Core Spun Single Yarn and Eligibility for United States-Mexico-Canada Agreement

In a recent ruling (H309704) Customs addressed the tariff classification, country of origin, and USMCA elgibility of a 2-ply yarn constructed of one black partially oxidized polyacrylonitrile (PAN) staple yarn (36.2% by weight) twisted to one beige/yellow core-spun aramid/glass yarn (63.8% by weight). The core-spun yarn is constructed of a beige/yellow aramid yarn (53.3% by weight) that is wrapped around a core of glass fibers (46.7% by weight).

Notice to the Trade: Gimped Yarn is Exemption from the Yarn Forward Rule in US FTAs

In 14 free trade agreements ("FTAs") the United States is currently a partner to, non-originating gimped yarn, or for that matter any non-originating article classified in Chapter 56 of the HTSUS, contained in a textile or apparel article of Chapters 50 through 55, or Chapters 57 through 63, does not disqualify an otherwise qualifying article from the benefits of the FTA. Although the texts of the agreements seem clear on the matter, there has been some question, particularly as it relates to DR-CAFTA.

On May 20, 2008, CBP issued letter N028235, ruling, "The non DR-CAFTA [gimped] yarns, used in the production of the hosiery, meet the terms of the tariff shift rule. Therefore [the hosiery articles] are entitled to a free rate of duty under the DR-CAFTA." On June 12, 2009, CBP published in Customs Bulletin Vol. 43, No. 24 a proposal to revoke that ruling and bring gimped yarn under the yarn forward rule. CBP received 18 comments and, in end, on January 27, 2010, published in Customs Bulletin Vol. Vol. 45, No. 5 that it was withdrawing the proposal. Subsequently, On May 7, 2014, CBP issued letter HQ H236917, ruling, again, that, "The hosiery at issue containing non-originating elastomeric [gimped] yarn qualifies as originating goods under the DR-CAFTA."

AAFA Advocates for Specific TTP Provisions Relating to Hosiery, Gimped Yarn, and Nylon Yarn

On February 13, 2015, the American Apparel and Footwear Association ("AAFA") wrote to the United States Trade Representative to urge inclusion of a knit to shape ("KTS") rule of origin ("ROO") provision in the Trans Pacific Partnership ("TPP") trade agreement for legwear. The same day AAFA also sent a letter that stresses the importance of including specialized provisions relating to gimped and Israeli nylon filament yarn that had been included in previous U.S. free trade agreements.

MORE INFORMATION.

Agathon Associates' report on Nylon Yarn Exemption.

Agathon Associates' report on Gimped Yarn.

Clients of Agathon Associates may access these reports with their username and password. If you need your username and password sent to you, email David Trumbull at david@agathonassociates.com.

Tariff Classifications of Several Hand Knitting Yarns. Alpaca from Peru. Acrylic from Italy or Turkey.

With the increased interest in hand knitting in the U.S. more yarn, and more kinds of yarns, are being imported "put up for retail." Last month U.S. Customs and Border Protection issued Binding Ruling Letters relating to eleven such yarns.

Ruling #N250032 related to the tariff classification of four knitting yarns and a chenille yarn, from Italy or Turkey

1. Heartland Thick & Quick, is stated to be 100% acrylic. It is a three-ply twisted staple-fiber bulky yarn. The label states that the hank weighs five ounces.

2. Country 254 Quarry, is also said to be 100% acrylic. It is a two-ply twisted bulky staple-fiber yarn. The sample hank weighs 139 grams. A simple desk test reveals the decitex to be approximately 10,000.

3. Landscapes, is a 100% acrylic twisted yarn. The hank weighs 100 grams.

4. Gold Leaf, is a two-ply twisted yarn of 90% acrylic and 10% wool. The yarn is decorated with gold-colored foil, with a 3/4-inch piece every two inches or so. All of the above yarns meet the tariff definition of “put up for retail sale” found in Section XI, Note 4, Harmonized Tariff Schedule of the United States (HTSUS). The applicable subheading for the above yarns will be 5511.10.0030, HTSUS, which provides for yarn (other than sewing thread) of man-made staple fibers, put up for retail sale, of synthetic staples fibers, containing 85 percent or more by weight of such fibers, acrylic. The duty rate will be 7.5% ad valorem.

5. Style Pelt is a yarn of knit construction with loose fibers caught in the knitted loops and extending out approximately 3/4 of an inch, creating a chenille effect. The applicable subheading for the yarn, style Pelt, will be 5606.00.0090, HTSUS, which provides for chenille yarn. The rate of duty will be 8% ad valorem.

Ruling #N250281 related to five styles of knitting yarns from Italy or Turkey.

1. Vanna’s Tapestry, is 100% acrylic. It is a four-ply twisted staple-fiber yarn. The label states that the hank is 136 meters and weighs 85 grams.

2. Vanna’s Palette, is eight small hanks, each 16 meters and 10 grams, 100% acrylic, twisted yarn packaged together in a plastic bag; each yarn is a different color.

3. Zanzibar, style 826, is a 53% wool and 47% acrylic twisted yarn. The hank weighs approximately 50 grams.

All of the above yarns meet the tariff definition of “put up for retail sale” found in Section XI, Note 4, Harmonized Tariff Schedule of the United States (HTSUS). The applicable subheading for Vanna’s Tapestry and Vanna’s Palette will be 5511.10.0030, HTSUS, which provides for yarn (other than sewing thread) of man-made staple fibers, put up for retail sale, of synthetic staples fibers, containing 85 percent or more by weight of such fibers, acrylic. The duty rate will be 7.5% ad valorem. The applicable subheading for style 826, Zanzibar, will be 5109.90.9000, HTSUS, which provides for yarn of wool, put up for retail sale:… Other: Other: Other. The rate of duty will be 6% ad valorem.

4. Style Modern Baby is a 50% acrylic/50% nylon knit yarn, 158 meters, 75 grams. It, too, meets the tariff definition of “put up for retail sale” found in Section XI, Note 4. The applicable subheading for Modern Baby will be 5511.10.0060, HTSUS, which provides for yarn (other than sewing thread) of man-made staple fibers, put up for retail sale, of synthetic staples fibers, containing 85 percent or more by weight of such fibers, other. The duty rate will be 7.5% ad valorem. Note 2(A) to Section XI, HTSUS, noted.

5. Style Keppi is an acrylic yarn intermittently combined with (either twisted with or gimped by) a chenille yarn that includes polyester textile strips that add to the chenille effect; 10 feet of the chenille yarn alternate with twenty or more feet of the twisted yarn. This yarn is considered a chenille yarn for tariff classification purposes. Keppi comes packaged with a pompom that is made of a knit pile fabric formed into a 2-3”- diameter ball filled with textile staple fibers. The yarn and pompom are retail-packaged with a crochet hook and instructions for a hat with a pompom. The yarn, pompom, and hook imported as a retail whole are considered a set for tariff classification purposes under the terms of General Rule of Interpretation (GRI) 3. According to the terms of GRI 3(b), the essential character of the set is imparted by the yarn and the set will be so classified. The applicable subheading for the yarn set Keppi will be 5606.00.0090, HTSUS, which provides for chenille yarn. The rate of duty will be 8% ad valorem.

Ruling #N249380 related to a alpaca/silk yarn from Peru, described as follows: 74% Suri Alpaca and 26% silk, called Andean Mist. (Suri Alpaca is a breed of the animal with longer hair, among other characteristics making it’s hair and the yarn made from it softer and finer, and thus more desirable and expensive.) Alpaca is considered fine animal hair for tariff classification purposes. Legal Note 1(b) to Chapter 51, Harmonized Tariff Schedule of the United States (HTSUS), noted. The yarn will be sold in 25-gram skeins. The yarn as imported meets the tariff definition of “put up for retail sale” found in Section XI, Note 4(b), HTSUS.

The applicable subheading for the alpaca /silk yarn as described above will be 5109.90.9000, HTSUS, which provides for yarn of wool or fine animal hair, put up for retail sale:…Other:…Other:…Other. The general rate of duty will be 6% ad valorem.

The yarn is manufactured in Peru. The alpaca is of Peru origin and silk fibers that are imported into Peru from China. The rule of origin in the U.S.-Peru Free Trade Promotion Agreement for goods classified in heading 5109 requires: "A change to heading 5106 through 5110 from any heading outside that group." The non-originating silk fibers are classified in Chapter 50, HTSUS and meet the terms of the tariff shift rule. Based on the facts provided, the yarn qualifies for Peru TPAIA preferential treatment because it meets the requirements of HTSUS General Note 32(b)(ii)(A). The merchandise will therefore be entitled to a Free rate of duty under the Peru TPAIA upon compliance with all applicable laws, regulations, and agreements.