CLA-2 CO:R:C:T 087648 DRR
Ms. Frances Jones
J. Ovington Fabrics Ltd.
2142 Marne St.
Victoria, British Columbia, Canada V854J9
RE: Classification and country of origin of fabrics woven and
embroidered in India and dyed in Canada
Dear Ms. Jones:
This is in response to your letter of June 20, 1990, in
which you requested a tariff classification ruling, under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), for two samples of fabric.
FACTS:
The merchandise at issue is represented by two sample
swatches of 100 percent handloomed cotton fabric embroidered
with 100 percent wool yarn. The samples weigh 241 grams per
square meter. The fabric is loomed and embroidered in India
according to designs which originate in Canada and exported to
Canada where some will be sold as imported and some will be
dyed to order. The undyed fabric costs US $11.40 per meter,
the cost of the dyeing averages US $18.00 per meter. The
fabric is intended to be used in upholstery.
ISSUE:
What is the classification of the fabric in question.
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA is in
accordance with the General Rules of Interpretation (GRI),
taken in order. GRI 1 provides that classification shall be
determined according to the terms of the headings and any
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relative section or chapter notes. Heading 5810, HTSUSA,
provides for embroidery in the piece, in strips or in motifs.
Subheading 5810.91.0010, HTSUSA, provides for embroidery in the
piece, in strips or in motifs, other embroidery, of cotton
weighing over 200 g/m. According to additional Note 1, Chapter
58, embroidery in the piece of subheading 5810.91 is dutiable
at 8.4 percent ad valorem, but not less than the rate of duty
that would apply if the fabric were not embroidered. If
unembroidered, the undyed sample would be classifiable in
subheading 5209.19.00, HTSUSA. The dyed sample would be
classifiable under subheading 5209.39.00, HTSUSA. If the dyed
sample is certified handloomed, it would be classifiable under
subheading 5209.31.3000, HTSUSA.
Section 12.130, Customs Regulations (19 CFR 12.130, copy
enclosed), provides, in pertinent part, that a textile or
textile product which consists of materials produced or derived
from, or processed in, more than one foreign territory or
country, or insular possession of the U.S., shall be a product
of that foreign territory or country, 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 operations
into a new and different article of commerce. A new and
different article of commerce will usually result from a
manufacturing or processing operation if there is a change in
commercial designation or identity, fundamental character or
commercial use. The criteria used to determine whether a
substantial transformation has taken place include the physical
change in the article, the time, complexity and value added by
the operation. Section 12.130 (e)(2)(v), Customs Regulations
states that the dyeing and/or printing of yarn or fabric is
insufficient processing to constitute a substantial
transformation.
With regard to the eligibility of the fabric for special
tariff treatment under the United States-Canada Free Trade
Agreement Implementation Act of 1988, the dyeing of the fabric
in Canada does not result in a change of classification under
General Note 3(c)(vii)(R)(11), HTSUSA. Accordingly the fabric
is subject to the rates of duty in the "General" subcolumn.
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HOLDING:
The fabrics in question are classified under subheading
5810.91.0010, HTSUSA. The undyed fabric is dutiable at a rate
of 8.4 percent ad valorem. The dyed fabric, if not certified
handloomed, is dutiable at a rate of 8.9 percent ad valorem.
In either condition, the fabric is subject to textile visa
category 229. If the fabric is handloomed and hand embroidered
and certified as exempt, it would be dutiable at a rate of 8.4
percent ad valorem, even if dyed. Shipments not accompanied by
the exemption certificate would require a normal circular visa
and may be subject to quota restraint levels. The country of
origin of both the dyed and undyed fabric is India.
Your question as to the proper marking of the fabric has
been referred to our Value and Marking Branch. They will
respond to you under separate cover. Your question about the
procedures applicable while the fabric is in Canada should be
addressed to Canadian Customs.
Due to the changeable nature of the statistical annotation
and the restraint (quota/visa) categories applicable to textile
merchandise, you should contact the local Customs office prior
to importation of this merchandise to determine the current
status of any import restraints or requirements.
The designated textile and apparel category may be
subdivided into parts. If so, visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, we suggest that you check, close to the time of
shipment, the Status Report on Current Import Quotas (Restraint
Levels), an internal issuance of the U.S. Customs Service,
which is available for inspection at your local Customs office.
Sincerely,
John Durant, Director
Commercial Rulings Division
drimmer library / 087648
6cc: A.D., N.Y. Seaport
DRimmer:jaj:02/07/91