MAR-2-05 CO:R:C:V 734351 GRV
Mr. Kevin Kiley
Executive Vice President
S. Shamash & Sons Inc.
42 West 39th Street - 12th Floor
New York, N.Y. 10018
RE: Country of origin of greige fabric from China, processed in
Mexico. Textile products; 19 CFR 12.130; T.D. 85-38; T.D.
90-17; substantial transformation; 19 CFR 12.130(e)(1)(i);
dyeing; printing; bleaching; shrinking
Dear Mr. Kiley:
This is in response to your letters of September 24 and
October 30, 1991, requesting a ruling on the country of origin
of textile products (rayon challis) in the greige that are
processed in a country (Mexico) other than the country of origin
where the fabric was manufactured (China). Samples of the
merchandise in the greige and after processing were submitted for
examination.
FACTS:
Rayon Challis fabric in the greige, produced in China, will
be exported to Mexico for the following processing operations:
prewashing, scouring, bleaching, causticizing, singeing, dyeing
framing, printing, steam developing, washing, application of an
optical bright solution, drying and framing to width, application
of various micro-fiber finishes, sanforizing, re-framing and
packaging.
Regarding the process you denominate causticizing, you state
that it entails partially destroying the subject yarn to accept
dyes better--resulting in deeper and more brilliant color shades.
Regarding the sanforizing process, you state that it employs a
machine to contract shrinkage and achieve a very soft pliable
result.
You inquire as to which country--China or Mexico--is the
country of origin of the imported fabric, for purposes of the
U.S. marking laws.
ISSUE:
Do the processing operations performed in Mexico substan-
tially transform the Chinese greige fabric for purposes of 19
U.S.C. 1304 and 19 CFR 12.130.
LAW AND ANALYSIS:
The country of origin rules for textiles and textile prod-
ucts are found at 19 CFR 12.130. For purposes of 12.130, where
a textile or textile product, subject to 204 of the Agricultural
Act of 1956, as amended (7 U.S.C. 1854), consists of materials
produced or derived from, or processed in, more than one foreign
territory or country, or insular possession of the U.S., the
country of origin is defined as that foreign territory or coun-
try, or insular possession where it last underwent a substantial
transformation. A textile or textile product will be considered
to have undergone a substantial transformation if it has been
transformed by means of substantial manufacturing or processing
into a new and different article of commerce. 19 CFR 12.130(b).
Thus, the substantial transformation test for textiles embraces
two separate findings: (1) whether there has been a new and
different article of commerce created, and (2) whether the new
article was created by means of a substantial manufacturing or
processing operation. See, Mast Industries, Inc. v. United
States, 11 CIT 30, 652 F.Supp. 1531 (1987), aff'd, 5 Fed.Cir.
105, 822 F.2d 1069 (1987).
Factors indicating whether or not particular manufacturing/
processing operation is substantial are set forth in 19 CFR
12.130(d)-(e). While 12.130(e)(1)(i) provides that an article
or material usually will be a product of the particular country
where it has been both dyed and printed when accompanied by two
or more of the finishing operations enumerated, 12.130(e)(2)
provides that the article or material usually will not be
considered to be a product of the particular country by virtue of
merely having undergone one or more finishing operations or been
dyed and/or printed. (Emphasis supplied).
As the merchandise imported is classifiable in HTSUS section
XI and was processed in more than one foreign country, the coun-
try of origin rules of 12.130(b) are applicable, and Customs has
stated that the principles of origin contained in 12.130 are
applicable to such merchandise for all purposes, including duty
and marking. T.D. 85-38, 19 Cust.Bull. 58, 68 (1985), and T.D.
90-17, 24 Cust. Bull. ___ (1990). Further, regarding the sub-
stantial transformation criteria and examples found at 12.130,
Customs has stated that "[a]ny factual situations not squarely
within those examples will be decided by Customs in accordance
with the provisions of section 12.130(b) and (d)." T.D. 85-38,
at p. 72.
After examining the textile samples submitted and for the
reasons which follow, we find that the fabric will be a product
of Mexico when imported into the U.S., as the Chinese fabric will
be substantially transformed by the textile processing operations
performed in Mexico. The Chinese greige fabric will be dyed and
printed in Mexico and further subjected to two of the finishing
operations enumerated at 12.130(e)(1)(i)--bleaching and
shrinking. The factual situation fitting squarely within the
example set forth at 12.130(e)(1)(i), the regulatory determina-
tion is controlling, and specific findings for the criteria at
12.130(b) and (d) are not required.
HOLDING:
The processing operations performed in Mexico substantially
transform the Chinese greige fabric for purposes of 19 U.S.C.
1304 and 19 CFR 12.130.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in section
177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)), which
provides that a ruling letter is issued on the assumption that
all of the information furnished in connection with the ruling
request and incorporated in the ruling letter, either directly,
by reference, or by implication is accurate and complete in every
material respect. Should it subsequently be determined that the
information furnished is not complete and does not comply with 19
CFR 177.9(b)(1), the ruling will be subject to modification or
revocation. In the event there is a change in the facts
previously furnished this may affect the determination of country
of origin. Accordingly, it is recommended that a new ruling
request be submitted in accordance with section 177.2, Customs
Regulations (19 CFR 177.2).
Sincerely,
John Durant, Director
Commercial Rulings Division