CLA-2 RR:CR:TE 959949 RH
Area Director of Customs
Attn: Chief, Residual Liquidation
& Protest Branch
6 World Trade Center, Room 761
New York, NY 10048-0945
Re: Protest No. 1001-96-106819; 19 CFR 12.130; finishing
operations; shrinkage;
country of origin; notice to redeliver; 19 CFR 141.113(b);
19 CFR 113.62; dyeing;
bleaching; printing; shrinking; sanforizing; substantial
transformation; rayon fabric
Dear Sir:
This is in reply to the Application for Further Review of Protest
(AFR)1001-96-106819 filed by the law firm of Grunfeld, Desiderio,
Lebowitz & Silverman, LLP, on behalf of Morex Enterprises, Inc.,
which you forwarded to our office for review. The protest was
timely filed, and headquarter's review is warranted pursuant to
19 CFR 174.24(b).
The protest is against a Notice to Redeliver goods covered by
three entries. The notice states that the fabrics in question
are products of Indonesia for which a visa is required. The
protestant does not dispute the classification of the merchandise
under subheading 5516.14.0010 of the Harmonized Tariff Schedule
of the United States Annotated (HTSUSA).
FACTS:
On March 28 and April 15, 1996, the protestant entered into the
United States 100 percent spun woven rayon fabrics. All of the
greige fabrics were produced in Indonesia. The finishing
operations were performed in Bursa, Turkey, by Ipeker Tekstil
Ticaret ve Sanayii Anonim Sirketi. Counsel claims that the
fabrics underwent singeing, bleaching, drying, dyeing, washing,
printing, steaming, washing, drying, finishing condensing and
sanforizing (shrinking) in Turkey.
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A Customs laboratory examined samples of the fabrics and reported
its findings, as follows:
the sample, a plain woven fabric, is composed wholly of single ply rayon
staple yarns.
Based on our examinations performed on the sample, we are of the opinion
that the sample has been bleached, dyed and printed.
There are no indications that the fabric was fulled, napped, moired, permanently stiffened, permanently embossed, decated, weighted or
pre-shrunk.
Customs determined that the greige fabrics had not been
substantially transformed in Turkey and issued Notices to
Redeliver on July 11 and July 29, 1996. The protestant maintains
that the fabrics were substantially transformed in Turkey into
products of that country.
ISSUE:
Were the greige fabrics in question substantially transformed in
Turkey pursuant to
19 CFR 12.130?
LAW AND ANALYSIS:
At the time the fabrics in question entered the United States,
Section 12.130 of the Customs Regulations (19 CFR 12.130)
governed the country of origin determinations for textiles and
textile products subject to Section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C.
1854). Country of origin determinations for textiles and
textile products imported prior to July 1, 1996, processed in
more than one country, are governed by the provisions in 19 CFR
12.130(b). Under that provision, 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.
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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(e)(1) provides:
An 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 does not contest that the fabrics were dyed, printed and
bleached inTurkey. However, a Customs laboratory found no
indication that the fabric underwent any of the other finishing
operations enumerated in 19 CFR 12.130. The Turkish
manufacturer, Ipeker, states on the Multiple Country Declaration
pertaining to these entries that the fabrics underwent the
following manufacturing and/or processing operations: singeing,
bleaching, drying, dyeing, washing, printing, steaming, washing,
drying, finishing condensing, sanforizing (shrinking) in Turkey.
Customs has been consistent in its determinations that where
dyeing and printing are not accompanied by two or more of the
operations enumerated in 19 CFR 12.130(e)(1), or where
processing involves only one or more finishing operation with no
dyeing and printing, or dyeing and printing alone, substantial
transformation does not occur for country of origin purposes.
See, Headquarters Ruling Letter (HQ) 734262, dated January 6,
1992, wherein Customs held that greige fabric which was treated
by bleaching, dyeing, printing, and resin finishing, including
special coating of the fabric, was not substantially transformed;
HQ 734435, dated January 10, 1991 (greige fabric produced in
Taiwan and processed in Hong Kong by desizing, scouring,
bleaching, dyeing, softening, stentering and calendering, was not
substantially transformed
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because the dyeing operation was not in conjunction with a
printing operation); HQ 089230,
dated May 10, 1991 (Chinese greige fabric exported to Hong Kong
where it underwent scouring,
bleaching, printing, napping and preshrinking, was not
substantially transformed in Hong Kong); HQ 953905, dated July
30, 1993 (fabrics which were dyed and printed and then underwent
scouring, singeing, mercerizing and bleaching did not satisfy the
two additional operations enumerated in 12.130(e) and were not
substantially transformed); HQ 953191, dated May 14, 1993 (a
substantial transformation did not occur in Kuwait where greige
fabric was desized and washed, scoured, shrunk, bleached, dyed,
sized and finished and cut on four sides and hemmed);
HQ 088901, dated July 5, 1991 (greige fabric shipped to Israel
where it was cut and sewn into 3000 foot lengths, singed and
desized, washed, dried, subjected to thermofixation (heating the
fabric to fix the final elasticity), bleached, printed, placed on
a stentor frame, dyed (a light shading), washed, calendered,
washed, and pressed, was not substantially transformed because
Customs found that the fabric was not printed and dyed).
Customs interpretation of 19 CFR 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 stentering. 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
fabric without a visa from the Government of China.
Thus, we disagree with counsel that the finishing operations
performed on the subject fabric, i.e., singeing, steaming,
washing, condensing, and drying are substantial processes.
With regard to shrinking, counsel submitted three reports from
Vartest Laboratories, Inc., which tested the fabric in all three
entries and concluded the following:
Based on the results of this three cycle dimensional change
test (AATCC 135-95) this fabric has been pre-shrunk and
stabilized in additional to being bleached and printed.
If this 100% Spun Rayon had not been pre-shrunk, the length
and width shrinkages would have averaged 8 to 15% in machine
washing.
The Morex fabric tested for this report has been bleached,
printed, pre-shrunk and stabilized.
Having undergone these substantial transformation changes,
it meets the requirements for use in garments using a
Machine Wash Care Label and is therefore in compliance with
Federal Trade Commission Regulations.
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Congress granted Customs the statutory authority to verify the
nature of imports using, among other methods, laboratory testing.
19 U.S.C. 1499 (1994). Additionally, it is well established that
the methods of weighing, measuring, and testing merchandise used
by Customs officers and the results obtained are presumed to be
correct. See, Exxon v. United States, 462 F. Supp 378, 81 Cust.
Ct. 87, C.D. 4772 (1978). The burden of proof rests with the
importer to overcome the presumption that Customs has the
expertise and knowledge to use standard methods and analysis
techniques to obtain accurate results. HQ 950794, dated March
25, 1992.
In determining that the fabrics had not been subjected to a
shrinking process, Customs relied upon the standards set forth in
the American Society for Testing and Materials (ASTM) Standard D
4038. This performance specification covers woven women's and
girls' dress and blouse fabrics composed of any textile fiber or
mixture of textile fibers. Section 1.1, ASTM 4038. The standard
instructs that dimensional change be determined in accordance
with the procedure set out in the AATCC (American Association of
Chemists and Colorists) Test Method 135. The maximum allowable
dimensional change recommended by the ASTM 4038 standard is 3
percent.
In this case, the 3 percent maximum allowable dimensional change
used by the Customs laboratory to determine if the imported
fabrics were preshrunk is a recognized industry standard. The
ASTM standards are recognized by both the government and the
industry. HQ 224349, dated February 18, 1994. Recognition by
Customs of the ASTM standards for weighing, measuring and testing
merchandise is exhibited by an array of Customs rulings, a small
sampling of which include: HQ 085912, dated February 6, 1990
(Customs is of the opinion that the use of the ASTM standards
will properly fulfill Congressional intent regarding the
definition of a tariff term); HQ 081157, dated April 25, 1989
(it has always been Customs practice, as well as an industry
practice, that any product which does not meet the ASTM D 439
specifications may not
be considered automotive gasoline for either Customs or
commercial purposes); HQ 086218, dated March 26, 1990 (it has
consistently been the position of Customs to utilize
substantiality of construction as essential to a finding that an
article is designed for travel and thus could be designated as
luggage - Customs Service has used the ASTM designation D1593-91
as the
basis for determining substantiality); HQ 111846, dated April 28,
1992 (Customs has adopted for most cases standards established by
the ASTM to determine whether the gasoline or blending components
of gasoline are transformed into new and different products
because such standards represent industry developed criteria for
characterizing fuel oils); HQ 224340, dated May 25, 1994 (Customs
uses the ASTM standards to determine fungibility for certain
products); HQ 953997, dated January 24, 1994 (ASTM D3597-89 has
been adopted by Customs as the proper test method which sets
forth the abrasion standards for woven upholstery fabrics); HQ
954018, dated September 23, 1993 (in considering whether a
product consisting of 75 percent gray Portland cement and 25
percent calcium carbonate is classifiable as Portland cements,
Customs consulted several standards established by the ASTM).
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Under its statutory authority to verify the nature of imports
using laboratory testing, Customs has a long established practice
of relying on industry standards for its methods of weighing,
measuring and testing merchandise. Thus, we disagree with the
protestant's claim that Customs arbitrarily imposed the ASTM D
4038 standard of 3 percent to measure shrinkage of the fabrics.
There is also a presumption that the test methods and analysis
technique of the Customs laboratory was correct. The AATCC 135
is a test method intended for the determination of dimensional
changes in woven and knit fabrics when subjected to repeated
automatic laundering procedures commonly used in the home.
"Dimensional change" is defined in section 3.1 of the test method
as "a generic term for changes in length or width of a fabric
specimen subjected to specified conditions. The change is
usually expressed as a percentage of the initial dimension of the
specimen." Section 3.4 describes "shrinkage" as "a dimensional
change resulting in a decrease in the length or width of a
specimen."
The AATCC 135 test method provides that delicate fabrics shall be
machine washed on delicate cycle for 8 minutes in 120§ +/- 5§ F.
It then provides that the fabrics be tumble dried on delicate
cycle or line, drip or screen dried.
Because the Customs laboratory which did the test is not equipped
with a washing machine, Customs also consulted TEXTILE TESTING
Physical, Chemical and Microscopical (1949) by John H. Skindle,
Associate Professor of Textile Chemistry, Lowell Textile
Institute. This text describes in detail the ASTM test methods
for rayon woven goods. At page 117 the author states that the
"Wash Wheel Testing Method" and "Launderometer Method" type of
tests are suitable for laboratories doing a lot of shrinkage
testing, but another method requiring no special
apparatus would be desirable for laboratories making only
occasional tests. An example of such a method is described at
page 118. The sample fabric is immersed in a beaker containing
0.3 percent soap solution in water at 40§ C for at least two
hours. The sample is then rinsed, squeezed as dry as possible
and dry-ironed. The sample is rewet, wrung out, ironed until
dry, conditioned several hours and then measured again.
The author states that:
A guaranteed shrinkproof or 100% shrinkproof fabric
should have no appreciable shrinkage; a pre-shrunk
fabric should have only a small amount of shrinkage (1-2%). A Sanforized label implies not over 1% shrinkage
in any direction and should be so understood. In
general, we may say that, even without any label or
claim, a shrinkage of more than 5% in either direction
is excessive, except in the case of wool.
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Customs tailored its test after the AATCC 135 and Testing Textile
methods. The method Customs used was as follows:
A 12" x 12" test sample from the submitted fabric was
tested for shrinkage. The sample was marked 10" apart
in the warp and filling direction with an indelible ink
marker. The marked sample was treated at 38 ([plus
minus] 1) degree centigrade or 100 ([plus minus] 2)
degrees fehrenheit for 15 minutes with a 0.5% soap
solution (1:30 material to liquor ratio). Then the
treated sample was washed with water (38 c or 100 f)
for 5 minutes followed by a warm wash (25 c or 77 f)
for 5 minutes and then a cold wash also for 5 minutes.
The sample was dried flat. The distances between two
markings were measured and the percent shrinkage
calculated.
Counsel submits that the fabrics are machine washable. He
further claims that the fabrics were "sanforized" by a "Montortex
sanforizing machine." SANFORIZED is a trademark owned by Cluett,
Peabody and Company, Inc. We contacted a representative from
that company who advised us that Cluett, Peabody and Company,
Inc., recognizes two test methods to determine shrinkage of
SANFORIZED fabrics. One is the Federal Test Method Standard No.
191A, which allows for shrinkage of +/- 1%. The other is the
AATCC 135 which allows for +/- 3%.
We also contacted a representative in Germany from the
manufacturer of the Monfortex machine, Monfort Gmbh & Co.
Moreover, the literature we received from Monfort stated that
"[a]s a rule, residual shrinkage should not exceed +/- 1%."
Customs test method is comparable to both the AATCC 135, the
Federal Test Method Standard No. 191A, and the Monfortex
standard, although Customs adopted less strenuous methods (cooler
water temperature, shorter wash cycle, no dry-ironing, no
wringing). We find no evidence that Customs test method was
erroneous. Additionally, Customs has ruled previously that the
presumption of correctness attached to a Customs laboratory
analysis was not overcome by conflicting results from independent
laboratory analyses, even when the same method of testing was
utilized by both Customs and the independent laboratories. See
HQ 070173, dated December 27, 1982.
As the fabrics in question shrunk in excess of the 3 percent
maximum allowable industry standard set forth in the ASTM, they
are not considered to be preshrunk for the purposes of 19 CFR
12.130(e)(1).
HOLDING:
The Indonesian greige fabrics in question were not substantially
transformed into products of Turkey. The fabrics were dyed,
printed and bleached in Turkey but lacked one of the additional
operations enumerated in 12.130(e). Accordingly, the protest
should be denied.
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In accordance with section 3A(11)(b) of Customs Directive Number
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be attached to the Customs Form
19, Notice of Action, and furnished to the protestant no later
than 60 days from the date of this letter. Any reliquidation of
the entry in accordance with the decision must be accomplished
prior to mailing of the decision. Sixty days from the date of
the decision (o n that date) the Office of Regulations and
Rulings will take steps to make the decision available to Customs
personnel via the Customs Ruling Module in ACS and to the public
via the Diskette Subscription Service, Freedom of Information
Act, and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division