COTTON

Chapter 52 of the EU Customs Tariff is entirely devoted to cotton -- one of the most important textile raw materials in the world. It covers cotton, not carded or combed, cotton waste, cotton, carded or combed, cotton sewing thread, cotton yarn and cotton fabrics. CN codes in this chapter range from heading 5201 (cotton, not carded or combed) to heading 5212 (other woven fabrics of cotton). Raw cotton, being one of the key imported raw materials, is the starting point of the processing chain encompassing spinning, weaving and finishing. This chapter is essential for importers of cotton raw materials, manufacturers of yarn and fabrics, and apparel companies. Cotton yarns classified under headings 5204-5207 differ in terms of linear mass, number of twists and intended use. Woven cotton fabrics (headings 5208-5212) are classified by surface mass, type of weave, composition and degree of processing (unbleached, bleached, dyed, of yarns of different colours or printed). The correct classification of woven cotton fabrics requires consideration of the percentage of cotton in the blend -- a fabric must contain at least 85% cotton by weight to be classified under headings 5208-5211.

Raw cotton (heading 5201) is subject to a zero duty rate, reflecting the EU's policy of supporting the import of raw materials for processing. Cotton waste (5202) also benefits from a zero rate. Cotton yarns (headings 5204-5207) are subject to duty rates from 4% to 5%. Woven cotton fabrics constitute the most highly taxed category in this chapter, with rates from 8% to 12% depending on mass, weave and finishing treatment. A 23% VAT is added to each import. Importers may benefit from preferential duty rates under EU trade agreements with countries such as Pakistan or Bangladesh.

The classification of cotton requires the precise determination of several parameters. For yarn, the key factors are linear mass (expressed in decitex), number of twists and commercial designation. Fabrics are classified on the basis of surface mass (above or below 200 g/m2), type of weave (plain, twill, satin) and degree of processing. It should be noted that fabrics containing less than 85% cotton by weight are classified under separate headings (5210-5212). Blends of cotton with synthetic fibres may be classified in Chapter 55 if the cotton content is in the minority.