CLA-2 CO:R:C:T 956421 CAB
Mr. Allan R. Grant
International Development Systems Inc.
733 15th Street, N.W.
Suite 520
Washington, D.C. 20005
RE: Classification of fabric; Heading 5516; Section 12.130,
Customs Regulations
Dear Mr. Grant:
This is in response to your inquiry of May 16, 1994,
requesting the country of origin and tariff classification under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA) for certain woven printed fabric on behalf of Carolina
Fabrics Limited. A sample was submitted for examination.
FACTS:
The submitted sample is a printed woven fabric composed of 100
percent viscose rayon. It contains 26.8 single yarns per
centimeter in the warp and 23.6 single yarn per centimeter in the
filling. The manufacturing process for the subject fabric is
as follows: Yarn from either Indonesia or India is woven into
greige goods in the United Arab Emirates [hereinafter U.A.E.]; the
greige fabric will also undergo warping, sizing, weaving,
inspection and packing in the U.A.E.. The fabric is then shipped
to Pakistan for further processing. In Pakistan, the greige fabric
will be desized, scowed (singed), semi-bleached, and printed. The
fabric is then exported to the United States.
ISSUES:
I. What is the proper tariff classification for the material at
issue?
II. What is the country of origin for the material at issue?
LAW AND ANALYSIS:
TARIFF CLASSIFICATION
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI's). GRI 1 provides that
classification shall be determined according to the terms of the
headings and any relative section or chapter notes. Merchandise
that cannot be classified in accordance with GRI 1 is to be
classified in accordance with subsequent GRI's taken in order.
Heading 5516, HTSUSA, is the provision for woven fabrics of
artificial staple fibers.
Note 1 to Chapter 54, HTSUSA, which defines man-made
artificial fibers, states the following:
Throughout the tariff schedule, the term "man-made fibers"
means staple fibers and filaments of organic polymers produced
by manufacturing processes, either:
(a) By polymerization of organic monomers, such as
polyamides, polyesters, polyurethanes or
polyvinyl derivatives; or
(b) By chemical transformation of natural organic polymers
(for example, cellulose, casein, proteins or algae),
such as viscose rayon, cellulose acetate, cupro or alginates.
The terms "synthetic" and "artificial", used in relation to
fibers, mean: synthetic: fibers as defined at (a); artificial:
fibers as defined at (b).
The terms "man-made", "synthetic" and "artificial" shall have
the same meanings when used in relation to "textile materials".
The instant fabric is a woven fabric comprised of 100 percent
rayon, which is an artificial fiber and thus, the fabric fits
squarely into Heading 5516, HTSUSA.
COUNTRY OF ORIGIN
Country of origin determinations for textile products are
subject to Section 12.130, 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 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), Customs Regulations, sets forth criteria
for determining whether a substantial transformation of a textile
product has taken place. This regulation states 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), 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), Customs Regulations, states that for
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;
(ii) The time involved in the manufacturing or processing
operations;
(iii) The complexity of the manufacturing or
processing operations;
(iv) The level or degree of skill and/or technology
required in the manufacturing or processing
operations;
(v) The value added to the article or material.
Section 12.130(e)(1) provides the following, in pertinent
part:
* * * [A]n 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;
Section 12.130(e)(2) further provides:
An article or material usually will not be considered to be a
product of a particular foreign territory or country, or
insular possession of the U.S. by virtue of merely having
undergone any of the following:
(iv) One or more finishing operations on yarns, fabrics,
or other textile articles, such as showerproofing,
superwashing, bleaching, decating, fulling,
shrinking, mercerizing, or similar operations; or
(v) Dyeing and/or printing of fabrics or yarns.
Customs has been consistent in its determinations that where
dyeing and printing are not accompanied by two or more of the
operations enumerated in 12.130(e)(1)(i), or where processing
involves only one or more finishing operations with no dyeing and
printing, or dyeing and printing alone, substantial transformation
does not occur for country of origin purposes. See Headquarters
Ruling Letter (HRL) 953905, dated July 30, 1993. See also, HRL
952759, dated November 25, 1992, where Customs concluded that
fabric that had been manufactured in Country "A", bleached and
printed in Country "B", and finally brushed, pre-shrunk, cut,
hemmed, labeled, folded and packaged in Country "X" was a product
of Country "A".
In the instant case as well as the cited Customs rulings, the
fabric in question is not dyed and printed in addition to other
processing in any single country. Instead, the subject fabric is
warped, sized and woven in the U.A.E. The fabric is then shipped
to Pakistan where it is
desized, scowed (singed), semi-bleached, and printed.
Consequently, since the fabric has not
been processed in accordance with Section 12.130(e)(1)(i), it
underwent its last substantial transformation in the U.A.E where
the fabric was woven.
This interpretation of Section 12.130 was upheld by the United
States Court of International Trade in Mast Industries Inc. v.
United States, 652 F.Supp. 1531 (1987); aff'd 822 F.2d 1069 (CAFC,
1989). That case involved greige cotton fabric produced in China
and sent to Hong Kong for singeing, desizing, scouring, bleaching,
mercerizing, dyeing, softening, and tentering. The court stated
that in determining the meaning of an agency's regulation, it would
defer to that agency's interpretation unless the interpretation is
plainly erroneous or inconsistent with the regulation. The court
found that Customs' interpretation was reasonable and approved of
Customs denying entry to the finished product without a visa from
the Government of China.
HOLDING:
The country of origin of the subject fabric is the U.A.E.
This ruling is issued pursuant to the provisions of Part 177
Customs Regulations (19 CFR Part 177). The holding in this ruling
only applies to the specific factual situation presented and the
merchandise identified in the ruling request. If the information
furnished is not accurate or complete, or there is a change in the
factual situation, this ruling will no longer be valid. In such an
event, a new ruling request should be submitted.
Based on the foregoing, the subject fabric is classifiable
under subheading 5516.14.0010, HTSUSA, which provides for woven
fabrics of artificial staple fibers, containing 85 percent or more
by weight of artificial fibers, printed, plain weave. The
applicable rate of duty is 17 percent ad valorem and the textile
restraint category is 611.
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, to obtain the most current
information available, 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.
Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories applicable to textile
merchandise, you should contact your local Customs office prior to
importing the merchandise to determine the current status of any
import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division