HQ 084243
July 19,1989
CLA-2 CO:R:C:G 084243 CB
Mr. T. Nakamura
Nissho Iwai American Corporation
1211 Avenue of the Americas
New York, New York 10036
RE: Determination of country of origin for rayon fabrics
Dear Mr. Nakamura:
This is in reply to your letter of March 23, 1989 concerning
the country of origin of certain greige fabric manufactured in
the orient and processed in Canada. Our ruling on the matter
follows.
FACTS :
The inquirer has submitted five samples representing the
various processing stages to which the greige fabric has been
subjected. The loomstate fabric is manufactured in the orient
and subsequently shipped to Canada for further processing. It is
composed of 100 percent spun rayon and has been plain woven. It
contains 27 single threads per centimeter in both the warp and
filling. The fabric is constructed using 30/1 c.c. yarns in both
the warp and filling. Weighing 118.5 g/m2, the fabric will be
imported into Canada in 160 centimeter widths.
In Canada the greige fabric is finished by subjecting the
merchandise to a series of processing steps. The steps include
desizing, bleaching, drying, dyeing, printing, Sanforizing, and
inspecting.
ISSUE :
Whether the processing in Canada of rayon fabric
substantially transforms it for country of origin purposes?
LAW AND ANALYSIS :
Section 12.130(b), Customs Regulations, provides that a
textile product processed in more than one country or territory -2-
shall be a product of that country or territory where it last
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 usually 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.
With regard to the subject fabric, there is no doubt that
the fabric has been dyed and printed in Canada, thus satisfying
part of the requirement. However, it fails to meet the
requirement of at least two additional finishing operations.
Only the Sanforizing process is a significant and substantial
process. Although the bleaching process would usually qualify as
significant, in this case it is unnecessary in the overall
finishing of the fabric. It is Customs position that an unneeded
operation cannot be used to meet the substantial process
requirement. The other processes indicated are either part of
the printing and dyeing operations or are insignificant and
therefore cannot be used to meet the requirement.
HOLDING :
In view of the above, the subject goods have not been
substantially transformed in Canada and therefore remain products
of the oriental countries where they are woven.
The subject fabrics are classifiable in subheading
5516.14.0010, HTSUSA, which provides for woven fabrics of
artificial staple fibers, containing 85 percent or more by weight
of artificial staple fibers, printed, plain weave. The textile
category is 611 and the rate of duty is 17 percent ad valorem. -3-
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