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HQ 084243


July 19,1989

CLA-2 CO:R:C:G 084243 CB

CATEGORY: CLASSIFICATION

TARIFF NO.: 5516.14.0010

Mr. T. Nakamura
Nissho Iwai American Corporation
1211 Avenue of the Americas
New York, New York 10036

RE: Determination of country of origin for rayon fabrics

Dear Mr. Nakamura:

This is in reply to your letter of March 23, 1989 concerning the country of origin of certain greige fabric manufactured in the orient and processed in Canada. Our ruling on the matter follows.

FACTS :

The inquirer has submitted five samples representing the various processing stages to which the greige fabric has been subjected. The loomstate fabric is manufactured in the orient and subsequently shipped to Canada for further processing. It is composed of 100 percent spun rayon and has been plain woven. It contains 27 single threads per centimeter in both the warp and filling. The fabric is constructed using 30/1 c.c. yarns in both the warp and filling. Weighing 118.5 g/m2, the fabric will be imported into Canada in 160 centimeter widths.

In Canada the greige fabric is finished by subjecting the merchandise to a series of processing steps. The steps include desizing, bleaching, drying, dyeing, printing, Sanforizing, and inspecting.

ISSUE :

Whether the processing in Canada of rayon fabric substantially transforms it for country of origin purposes?

LAW AND ANALYSIS :

Section 12.130(b), Customs Regulations, provides that a textile product processed in more than one country or territory -2-
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.

In addition, Section 12.130(d), Customs Regulations, provides that a new and different article of commerce will usually result from manufacturing or processing operations if there is a change in (1) commercial identity, (2) fundamental character, or (3) commercial use. That provision also states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, we will consider the physical change in the material or article, the time involved, the complexity of the operation, the level or degree of skill and/or technology involved, and the value added to the article in each country or territory. Any one or a combination of these factors may be determinative and other factors may also be considered.

Our regulations further provide that a fabric usually will be a product of the country where it is dyed and printed and accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, and moireing.

With regard to the subject fabric, there is no doubt that the fabric has been dyed and printed in Canada, thus satisfying part of the requirement. However, it fails to meet the requirement of at least two additional finishing operations. Only the Sanforizing process is a significant and substantial process. Although the bleaching process would usually qualify as significant, in this case it is unnecessary in the overall finishing of the fabric. It is Customs position that an unneeded operation cannot be used to meet the substantial process requirement. The other processes indicated are either part of the printing and dyeing operations or are insignificant and therefore cannot be used to meet the requirement.

HOLDING :

In view of the above, the subject goods have not been substantially transformed in Canada and therefore remain products of the oriental countries where they are woven.

The subject fabrics are classifiable in subheading 5516.14.0010, HTSUSA, which provides for woven fabrics of artificial staple fibers, containing 85 percent or more by weight of artificial staple fibers, printed, plain weave. The textile category is 611 and the rate of duty is 17 percent ad valorem. -3-

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director

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