CLA-2 CO:R:C:T 953019 NLP
Area Director
United States Customs Service
J.F.K. Airport
Building 77
Jamaica, NY 11430
RE: Country of origin of rayon challis fabric; substantial
transformation; fabric woven into greige goods in Asia;
singeing, washing, scouring, bleaching, dyeing, washing,
drying, printing, steam setting and shrinking performed in
West Germany; 19 C.F.R. 12.130(b) and 12.130(e)(1)(i); HRL
734351
Dear Sir:
This is in response to Politis, Pollack & Doram's request,
on behalf of their client, Hi-Fashion Fabrics, Inc., for internal
advice on the country of origin of certain greige fabric
manufactured in Asia and processed in West Germany. Samples of
the merchandise in the greige and after processing were submitted
for our examination.
FACTS:
The fabric at issue is a rayon challis cloth which is first
woven into greige goods in various countries in Asia. After
weaving, the greige goods are shipped to West Germany for further
processing.
In West Germany, the greige fabric is finished by subjecting
it to a series of processing steps. First, the fabric undergoes
a singeing operation which, according to counsel's letter, is
necessary to burn away the fiber ends to remove the hairiness
from the surface of the fabric. The fabric is then washed,
scoured and bleached. According to counsel's letter, these
processes are necessary to remove impurities from the greige
fabric, to take out the sizing imparted in the weaving process,
to obtain a consistent white color and to improve the fabric's
color resorption.
Immediately after bleaching, the fabric is reactive dyed on
various machines, depending on the color. After dyeing, the
fabric is washed and dried. The fabric is then printed by rotary
printing machines either in reactive dye stuff colors or vat
discharge colors.
After printing, the fabric is steam set and washed. The
fabric then undergoes its final finishing, which entails its
passage on a stenter frame where fulling agents, a softener and
crease resistant chemicals are applied and baked into the fabric
at a high temperature to shrink it.
ISSUE:
Whether the finishing operations performed to the greige
goods woven in Asia have substantially transformed the fabric
according to 19 C.F.R. 12.130 for it to be considered of German
origin?
LAW AND ANALYSIS:
Country of origin determinations for textile products are
subject to Section 12.130 of the Customs Regulations (19 CFR
12.130). Section 12.130 provides that a textile product that is
processed in more than one country or territory shall be a
product of that country or territory 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 operations into a new and different article of
commerce.
Section 12.130(d) of the Customs Regulations sets forth
criteria for determining whether a substantial transformation of
a textile product has taken place. This regulation states that
these criteria are not exhaustive; one or any combination of
criteria may be determinative, and additional factors may be
considered.
Section 12.130(d)(1) of the Customs Regulations states that
a new and different article of commerce will usually result from
a manufacturing or processing operation if there is a change in:
(i) Commercial designation or identity,
(ii) Fundamental character or
(iii) Commercial use.
Section 12.130(d)(2) of the Customs Regulations states that
in determining whether merchandise has been subjected to
substantial manufacturing or processing operations, the following
will be considered:
(i) The physical change in the material or article as
a result of the manufacturing or processing operations
in each foreign territory or country, or insular
possession of the U.S.
(ii) The time involved in the manufacturing or
processing operations in each foreign territory or
country, or insular possession of the U.S.
(iii) The complexity of the manufacturing or processing
operations in each foreign territory or country, or
insular possession of the U.S.
(iv) The level or degree of skill and/or technology
required in the manufacturing or processing operations
in each foreign territory or country, or insular
possession of the U.S.
(v) The value added to the article or material in
each foreign territory or country, or insular
possession of the U.S., compared to its value when
imported onto the U.S.
Section 12.130(e) of the Customs Regulations sets forth
criteria which aid us in determining whether an article has been
subjected to certain manufacturing or processing operations which
serve to substantially transform an article into a new and
different article of commerce. Specifically, Section
12.130(e)(1)(i) is relevant in the instant case. This Section
provides that:
An article or material usually will be a product of a
particular foreign territory or country, or insular
possession of the U.S., when it has undergone prior to
importation into the U.S. in that foreign territory or
country, or insular possession any of the following:
(i) Dyeing of fabric and printing when accompanied by two
or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating,
permanent stiffening, weighting, permanent embossing,
or moireing.
The subject fabric has been dyed and printed in West
Germany. Therefore, the issue is whether these processes have
been accompanied by at least two additional finishing operations.
Bleaching is one of the named processes in the above Section and
it would appear to satisfy one of the two required processes set
forth. In order to verify that the process of bleaching the
rayon fabric is necessary in the overall finishing of the fabric,
we submitted the rayon fabric to the Customs Laboratory for
analysis.
The laboratory examined the fabric and pointed out that
rayon and other cellulosic fibers, yarns and fabrics require
preparation or treatment to remove impurities prior to dyeing or
printing. These impurities, whether natural in origin or
resulting from contaminants obtained during the spinning and
weaving processes, must be removed in order to ensure good
absorbency, low sizing content, minimal fiber degredation and
whiteness. While the laboratory stated that the degree of
bleaching that is necessary to whiten the fabric depends on the
desired shade to be obtained in subsequent dyeing processes, it
was their position that most fabrics undergo continuous
processing in preparation for dyeing and it is common for these
operations to include a standard bleaching operation. This
enables all fabrics to be prepared to be dyed in a full range of
shades. Therefore, the bleaching is a part of the operations
performed to prepare the fabric for dyeing and printing and does
not appear to be superfluous in the overall finishing of the
fabric. As a result, the rayon fabric is subjected to one of the
finishing operations enumerated above.
Moreover, as the rayon fabric is also subjected to a
shrinking operation, it is has satisfied the requirements set
forth in Section 12.130(e)(1)(i). Therefore, the rayon fabric is
considered substantially transformed and it will be considered a
product of West Germany when imported into the U.S. See,
Headquarters Ruling Letter (HRL) 734351, dated March 2, 1992,
which dealt with a similar country of origin issue. In that
case, a rayon challis fabric in the greige was produced in China
and exported to Mexico where the following operations were
performed: 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. HRL 734351 held that since the fabric
was dyed and printed in Mexico and was further subjected to two
of the finishing operations set forth in 12.130(e)(1)(i)-
bleaching and shrinking, the country of origin for the fabric was
Mexico.
HOLDING:
The country of origin for the rayon greige fabric is West
Germany.
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). This
section states that a ruling letter is issued on the assumption
that all 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