CLA-2 CO:R:C:T 952801 jb
Mr. David R. McCauley
Jacky Maeder Ltd.
Harbour Tech Center
P.O. Box 6070
Chelsea, MA 02150
RE: Classification and country of origin of metalized embroidery
thread; gimping; subheading 5605.00.0090, HTSUSA
Dear Mr. McCauley:
This is in response to your letter, dated September 14,
1992, on behalf of your client, Madeira USA Ltd, requesting
classification under the Harmonized Tariff Schedule of the United
States Annotated and country of origin determination for
metalized embroidery thread imported from Singapore. Samples
were provided to this office for examination.
FACTS:
The submitted samples, referred to as "Metalfil" yarn,
consist of a core of German-made polyester filament core yarn,
wrapped with a Japanese-made metallic foil plastic strip with a
final "S" twist. The final twisting (gimping) operation is done
in a third country, Singapore, to make the finished product.
Based on results from the Customs New York laboratory, the 1/64
inch ST silver foil strip from Japan in the gimped yarn is
metalized polyester strip.
ISSUE:
1. What is the classification of the metalized embroidery
thread?
2. What is the country of origin of the submitted
merchandise?
LAW AND ANALYSIS:
I. Classification
Classification of merchandise under the HTSUSA is governed
by the General Rules of Interpretation (GRI). GRI 1 requires
that classification be determined according to the terms of the
headings and any relative section or chapter notes, taken in
order. Where goods cannot be classified solely on the basis of
GRI 1, the remaining GRI will be applied, in the order of their
appearance.
The samples at issue appear to be gimped metalized yarns.
Heading 5605, HTSUSA, provides for metalized yarn, whether or not
gimped, being textile yarn, or strip or the like of heading 5404
or 5405, combined with metal in the form of thread, strip or
powder or covered with metal.
Gimping is a kind of twisting. Gimped yarn is defined as:
Yarn consisting of a tightly twisted center or heart yarn
wrapped around by soft twisted yarn, and usually colored,
novelty yarn. Spirality in gimp is very important to bring out
the effect. George E. Linton, The Modern Textile and
Apparel Dictionary, at 265, (1973).
Thus, in a gimped yarn, the yarn's core is separate from the
outer covering. The core is straight and wrapped with the
covering. In a plied yarn on the other hand, the plies are
twisted together at the same rate of speed by the twisting
machine.
The Explanatory Notes to the Harmonized Commodity
Description and Coding System (EN) are the official
interpretation of the tariff at the international level. The EN
to heading 5605, HTSUSA, state:
This heading covers:
(1) Yarn consisting of any textile material (including
monofilament, strip and the like and paper yarn) combined
with metal thread or strip, whether obtained by a process of
twisting, cabling or by gimping, whatever the proportion of
the metal present. The gimped yarns are obtained by
wrapping metal thread or strip spirally round the textile
core which does not twist with the metal. Precious metals
or plated metals are frequently used.
Accordingly, the samples are classifiable in subheading
5605.00.0090, HTSUSA, which provides for gimped metalized yarn.
II. Country of Origin
Section 12.130 of the Customs Regulations (19 CFR 12.130),
sets forth the principles of country of origin for textiles and
textile products subject to section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).
Pursuant to 19 CFR 12.130(b), the standard of substantial
transformation governs the country of origin determination where
textiles and textile products are processed in more than one
country. The country of origin of textile products is deemed to
be that foreign territory or country where the article last
underwent a substantial transformation. Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing.
The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(d). Section 12.130(d)(1) 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 into
the U.S.
As the metalized gimped yarns at issue consist of components
of two countries, assembled in a third country, a determination
must be made as to where the last substantial transformation
occurred. It is Customs' view that the assembly of two yarns
into one yarn, whether by plying or gimping, does not
substantially transform those yarns. While they may have new
uses, it does not change the fact that the articles are still
yarns. Thus, the assembly of the yarns in Singapore is not a
substantial transformation.
In a case such as this, where Section 12.130 does not
address the situation where an article is composed of two
components, each contributing equally to the finished article,
and the article is not substantially transformed in a third
country, a different test must be applied to determine country of
origin.
Where for the purposes of our international textile
agreements, a determination must be made in regard to the country
of origin of a composite article comprised of components of
different countries, where the joining of the components is not
sufficient to confer origin, the origin of the article will be
determined by the component which would be selected under
GRI 3, HTSUSA, as being determinative of classification.
GRI 3(c) provides:
When goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which
occurs last in numerical order among those which
equally merit consideration.
In the case at hand, individually, we have a core polyester
yarn and a metallic foil plastic strip (subheadings 5402.43.0040
and 5605.00.0010, HTSUSA, respectively). In HQ 952802, dated
June 11, 1993, we concluded that in a situation involving gimped
yarn where the rubber core yarn component provided elasticity and
the surrounding cotton yarn component provided strength, a GRI
3(c) determination was necessary. Similarly, in the submitted
merchandise where we have a core polyester yarn component
providing strength and a metallic foil component providing a
decorative or ornamental effect, both components equally impart
essential character. As the metallic foil portion of the yarn,
from Japan, occurs last in numerical order, the subject yarn is a
product of Japan.
HOLDING:
The submitted "Metalfil" yarn is classified in subheading
5605.00.0090, HTSUSA, which provides for metalized yarn, whether
or not gimped, being textile yarn, or strip or the like of
heading 5404 or 5405, combined with metal in the form of thread,
strip or powder or covered with metal, other. The applicable
rate of duty is 15 percent ad valorem and the textile category is
201. The country of origin of the merchandise is Japan.
The designated textile and apparel category may be
subdivided into parts. If so, the visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
changes, to obtain the most current information available, the
Status Report on Current Import Quotas (Restraint Levels), an
internal issuance of the U.S. Customs Service which is updated
weekly and is available at the local Customs office.
Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories, your client should contact the
local Customs office prior to importation of this merchandise to
determine the current status of any import restraints or
requirements.
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 of the information furnished in the ruling letter,
either directly, by reference, or by implication, is accurate and
complete in every material respect.
Should it be subsequently 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