CLA-2 CO:R:CV:G 086826 JLV
Richard M. Belanger, Esq.
Powell, Goldstein, Frazer & Murphy
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
RE: Single loop bale ties; substantial transformation;
cutting to length and looping ends of galvanized wire
Dear Mr. Belanger:
In a letter of March 16, 1990, on behalf of your client,
Florida Wire Products Corporation, you request a ruling on the
country of origin of single loop bale ties that are made from
galvanized steel wire. A sample of the bale tie (looped end
only) has been submitted. This is our decision on the origin
issue.
FACTS:
Your client proposes to obtain galvanized steel wire from
a manufacturer in a country whose steel wire is subject to a
Voluntary Restraint Arrangement (VRA). The galvanized wire
will be shipped to Costa Rica (or possibly Aruba, Honduras or
other country) for processing into single loop bale ties. The
processing, to be performed on a "bale tie" machine, will
consist of the following:
1. Straighten the wire and cut to specified lengths
ranging from 6 to 21 feet.
2. Bend one end of each length to form a loop
(approximately 3.5 inches from the end).
3. Twist the looped end (approximately two complete
turns) to form a closed loop measuring
approximately 0.5 inch in diameter.
4. Package the completed bale ties in bundles of 150
to 250 ties.
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You conclude that the processing results in a product of
Costa Rica (or other country in which the single loop bale
ties are formed from the galvanized wire) because the
processing results in an article which has a new name,
character, and use. You note that the name changes from
"wire" to "bale ties." This change in name is also reflected
in a change in tariff classification from heading 7217 to
heading 7326, Harmonized Tariff Schedule of the United States
(HTSUSA). Furthermore, you note that the use of a
multipurpose galvanized wire is narrowed to a single use
article, a bale tie. Finally, you point out that the change
in use and the 30 to 40 percent value added by the processing
are evidence of a change that results in a product with a new
character, i.e., a recognizable finished wire product.
ISSUE:
Is the manufacture of single loop bale ties from
galvanized wire a substantial transformation of the wire into
a new and different article which, therefore, becomes a
product of the country in which the manufacture takes place?
LAW AND ANALYSIS:
The test for a substantial transformation is whether or
not the processing changes a material or article into a
different article which has a new name, character, or use. In
this case, the bale ties are different in name, character, and
use from the galvanized wire. The cutting and looping is a
process that changes a multi-use material (galvanized wire in
coil) into an identifiable article of commerce (single loop
bale tie).
HOLDING:
The processing of galvanized wire into single loop bale
ties is a substantial transformation which results in new and
different articles, i.e., single loop bale ties, which are
products of the country (in this case, Costa Rica) in which
the process takes place. Bale ties of wire are classified in
subheading 7326.20.00, HTSUSA.
The Office of Agreements Compliance, International Trade
Administration, Department of Commerce, has the responsibility
for interpreting the coverage of the VRA's. In this case,
galvanized wire from a VRA country would be substantially
transformed in Costa Rica into single loop bale ties. At the
time of entry for consumption in the United States, the bale
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ties would be products of Costa Rica. Therefore, we suggest
that you seek the advice of the Office of Agreements
Compliance on the application of the VRA to VRA wire which is
substantially transformed in a non-VRA country prior to entry
into the United States.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc: AD NY Seaport
2cc: Chief, CIE
1cc: Dir, OTO
1cc: Frank Crowe, OTO
1cc: Reading File
1cc: AC, CO
1cc: Dir, ComRulDiv
1cc: Office, Agreements
Compliance, ITA, Commerce
LIBRARY: valentin
FILE NAME: 086826