CLA-2 CO:R:C:G 082574 CRS
Ms. Shirley A. Waltos
Manager
Karl Schroff & Associates, Inc.
Route 6, Box 384 - 17
Springfield, Missouri 65803
RE: Hand-Woven Fabric from Guatemala
Dear Ms. Waltos:
This is in reply to your letter dated July 6, 1988, to our
New York office, in which you requested a ruling under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA) concerning the classification of hand-woven fabric
imported from Guatemala. You also enquired as to the country of
origin marking requirements for the fabrics. Three samples of
the fabric were submitted with your request.
FACTS:
The first article is a 100 percent cotton hand-woven fabric,
and is made of basket weave construction with fast edges. It
measures three-quarters of an inch in width and will be imported
in continuous lengths.
The second item is a 100 percent cotton hand-woven fabric
patch measuring 6 inches by four inches and has fast edges on two
sides. Both the patch and the woven narrow fabric will be sewn
in the United States to shirts or shorts made by a U.S.
manufacturer.
The third sample is a macrame string article made from hand-
crafted 100 percent cotton yarn. The macrame strings are
designed to be used with hang tags which will be attached to the
U.S.-made garments.
ISSUE:
Whether the articles in question are classifiable under
headings 5806 and 5804, HTSUSA, or whether the second and third
articles should be classified under heading 6307, HTSUSA?
Secondly, whether the articles in question will be substantially
transformed in the United States such that they are exempt from
country of origin marking requirements?
LAW AND ANALYSIS:
Articles are classified under the HTSUSA in accordance with
the General Rules of Interpretation (GRIs). GRI 1 provides that
the classification of articles is to be determined according to
the terms of the headings and any relative section or chapter
notes and, provided the headings or notes do not otherwise
require, according to the remaining GRIs taken in order.
Heading 5806, HTSUSA, covers narrow woven fabrics, other
than goods of heading 5807. Note 5 to chapter 58 states in
pertinent part that
For the purposes of heading 5806, the expression "narrow
woven fabrics" means:
(a) Woven fabrics of a width not exceeding 30 cm, whether
woven as such or cut from wider pieces, provided with
selvages...on both edges.
The first sample is 3/4 of an inch, or approximately 1.9
centimeters (cm) wide and has selvages on both edges and is
therefore a narrow woven fabric for the purposes of heading 5806,
HTSUSA.
Customs is also of the opinion that the second item, the
hand-woven fabric patch, is a narrow woven fabric within the
meaning of heading 5806, HTSUSA. It too, measures under 30 cm in
width and has selvages on both edges. Moreover, we do not
consider the patch to be an article of heading 6307, HTSUSA. The
Explanatory Notes, which constitute the official interpretation
of the Harmonized System at the international level, state in
regard to heading 6307, that the
heading covers made up textile articles of any textile
material which are not included more specifically in other
headings of Section XI or elsewhere in the Nomenclature.
However, the patch meets the definition of a narrow woven fabric
of heading 5806. Thus it is specifically described in Section XI
and consequently, excluded from heading 6307, HTSUSA.
Heading 5804, HTSUSA, covers tulles and other net fabrics...
lace in the piece, in strips or in motifs. The Explanatory Note
to heading 5804 describes lace as an ornamental or decorative
openwork fabric. Specifically, Note (II)(D)(4) to heading 5804
defines macrame lace as:
a heavy lace made by knotting in various ways a series of
threads fixed at right angles to a leading thread.
Textiles: Fiber to Fabric, (5th ed., 1979), at 168-69, refers to
macrame as one of the "lesser-known" laces and states that it
"differs from other laces in texture and appearance."
The article in question is an openwork fabric, that is,
there are numerous small openings in the material. Furthermore,
it is designed as an ornamental means of attaching paper tags to
finished garments. Finally, it is made by knotting together a
series of threads as described above. Consequently, it is
Customs position that the macrame string is a lace fabric of
heading 5804, HTSUSA.
You also enquired as to the country of origin marking
requirements for the three articles in question. Section 304(a)
of the Tariff Act of 1930, as amended (19 U.S.C. 1304(a)),
requires that articles of foreign origin imported into the United
States be marked in such a manner as to indicate to the ultimate
purchaser in the United States the country of origin of the
imported merchandise. Nevertheless, there is an exception to
this requirement for articles used in manufacture and which
result in the articles having a name, character, or use
differing from that of the imported articles (U.S. v. Gibson-
Thomsen Company, Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940)). In
such a case, the U.S. manufacturer who converts the imported
merchandise into the different article will be considered the
ultimate purchaser and the article will be exempt from marking.
See section 134.35, Customs Regulations (19 CFR 134.35).
Here, the imported narrow woven fabrics are sewn to shirts
and shorts made in the United States, or in the case of the
macrame, attached to paper tags which are themselves attached by
means of the macrame to the finished garments. As a result, the
articles lose their former character and are incorporated into
the shirts and shorts as decorative trim. Thus the U.S.
manufacturer is the ultimate purchaser and the fabrics and
macrame are exempt from marking. Nevertheless, the outermost
containers of the imported articles remain subject to the
marking requirements of 19 CFR 134.35.
However, we note that the tag attached to the sample macrame
bears a U.S. address. Section 134.36(b), Customs Regulations
(19 CFR 134.36(b)), provides that exceptions from marking shall
not apply to articles bearing misleading markings, i.e., words,
letters, names, or symbols which imply that the articles were
made or produced in a country other than the actual country of
origin. A U.S. address such as appears on the sample tag is
misleading within the meaning of section 134.36, Customs
Regulations (19 CFR 134.36) as it implies the possibility that
the macrame was made in the United States rather than Guatemala.
Consequently, if the tags actually used with the macrame were to
bear a U.S. address, we would require that the tags also indicate
the macrame's country of origin, i.e., that the macrame was made
in or a product of Guatemala pursuant to 19 CFR 134.46.
HOLDING:
The first and second items, the narrow woven fabrics are
classified under subheading 5806.31.0000, under the provision for
narrow woven fabrics...; other woven fabrics; of cotton. They
are subject to duty at a rate of 10 percent ad valorem; the
textile category is 229.
The third item, the macrame lace string, is classified under
subheading 5804.30.0020, under the provision for tulles and other
net fabrics...; lace in the piece, in strips or in motifs; hand-
made lace; of cotton. The macrame is dutiable at a rate of 15
percent ad valorem; the textile category is 229. Under General
U.S. Note 3(c)(v)(D), HTSUSA, exports (of subheading 5804.30.00)
of handloom fabrics of the cottage industry or traditional
folklore handicraft textile products from Caribbean Basin
Economic Recovery Act (CBERA) beneficiary countries may be
eligible for duty-free treatment if such products are properly
certified. Guatemala is a designated CBERA beneficiary country.
The cotton hand-woven fabrics themselves are exempt from
marking, except for the outermost containers in which the
articles are imported which remain subject to the marking
requirements of 19 CFR 134.35. The macrame string is also exempt
from marking, unless the string tags to which the macrame will be
attached bear a U.S. address, in which case the tags should
indicate the macrame's country of origin.
The designated textile and apparel category may be
subdivided into parts. If so, visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available, we
suggest that you check, close to the time of shipment, the Status
Report on Current Import Quotas (Restraint Levels), an internal
issuance of the Customs Service, which is available for
inspection at your local Customs office.
Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories, 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