CLA-2 CO:R:C:G 085299 CB
Mr. Roger S. Shatafian
Creative Natural Fabrics
110 East Ninth Street, A742
Los Angeles, CA 90079
RE: Substantial transformation and country of origin of
silk fabric
Dear Mr. Shatafian:
This is in response to your inquiry of July 31, 1989,
requesting a substantial transformation and country of origin
determination under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA), for certain silk fabric.
FACTS:
Samples of the fabric both prior to and after processing
were submitted. One sample is bleached white, a second fabric is
dyed blue and a third fabric is printed in a brown floral print
design with a blue background. You have stated that the subject
fabric is 100% silk fabric woven or knitted in the People's
Republic of China (ROC). The fabric is also bleached and de-
gummed in the ROC and then exported to Hong Kong. As stated, the
fabric will be further processed in Hong Kong. The primary
processing will involve dyeing and printing. You have also
indicated that the fabric will be subjected to at least two other
processes prior to being imported into the United States in 50
yard lengths. Among these finishing processes are re-bleaching,
decatizing, pre-shrinking, sponging and sandwashing. You have
indicated that the fabric is rebleached in Hong Kong because the
bleaching process performed in China produced a fabric of poor
quality and the uneven effects will affect the dyeing process.
ISSUE:
Whether the processing taking place in Hong Kong is
sufficient to make Hong Kong the country of origin for duty and
marking purposes?
LAW AND ANALYSIS:
Section 12.130(b), Customs Regulations, provides that a
textile product processed in more than one country or territory
shall be a product of that country or territory where it last
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underwent a substantial transformation. A textile product will
be considered to have undergone a substantial transformation if
it has been transformed by means of substantial manufacturing or
processing operations into a new and different article of
commerce.
In addition, Section 12.130(d), Customs Regulations,
provides that a new and different article of commerce will
usually result from manufacturing or processing operations if
there is a change in (1) commercial identity, (2) fundamental
character, or (3) commercial use. That provision also states
that in determining whether merchandise has been subjected to
substantial manufacturing or processing operations, we will
consider the physical change in the material or article, the time
involved, the complexity of the operation, the level or degree of
skill and/or technology involved, and the value added to the
article in each country or territory. Any one or a combination
of these factors may be determinative and other factors may also
be considered.
Our regulations further provide that a fabric will be a
product of the country where it is dyed and printed and
accompanied by two or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating, permanent
stiffening, weighting, permanent embossing, and moireing. In the
instant case the three fabric samples were sent to the Customs
Laboratory to determine if the fabric was first dyed and then
printed. The Laboratory examination concluded that the fabric
had not been dyed prior to printing. Two distinct processes have
not been used to produce the printed fabric. It has consistently
been Customs position that the dyeing and printing processes must
be performed individually accompanied by two or more of the
finishing operations listed above. In the instant case, the
processes performed in Hong Kong are insufficient to satisfy the
substantial transformation requirements. China remains the
country of origin for the fabric.
HOLDING:
In view of the above, the subject fabric has not been
substantially transformed in Hong Kong and therefore remains a
product of China.
Sincerely,
John Durant, Director
Commercial Rulings Division