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HQ 734354


March 2, 1992

MAR-2-05 CO:R:C:V 734354 GRV

CATEGORY: MARKING

Mr. Allan R. Grant
International Development Systems Inc.
733 15th Street, N.W. - Suite 520
Washington, D.C. 20005

RE: Country of origin of greige fabric from China, processed in Thailand. Textile products; 19 CFR 12.130; T.D. 85-38; T.D. 90-17; substantial transformation; 19 CFR 12.130(e)(1)(i); dyeing; printing; bleaching; shrinking.

Dear Mr. Grant:

This is in response to your letters of September 26, 1991, and January 13, 1992, on behalf of The Thonburi Textiles Mills, Ltd., Bangkok, Thailand, requesting a ruling on the country of origin of textile products (rayon fabric) in the greige that are processed in a country (Thailand) other than the country of origin where the fabric was manufactured (China). Samples of the merchandise in the greige and after processing were submitted for examination and, although their return is requested, will be kept with the file in this case.

FACTS:

Rayon fabric in the greige, produced in China, will be exported to Thailand for the following processing operations:
inspection/mending, singeing/desizing, washing, scouring, bleaching, mercerizing (causticizing), dyeing, pad-dyeing and drying, application of an optical whitening bright solution, stretching, printing, steaming, soaping/ washing, pigment tinting, finishing/stentering/heat setting, pre-shrinking, and inspection/packaging.

You inquire as to which country--China or Thailand--is the country of origin of the imported fabric, for purposes of the U.S. marking laws.

ISSUE:

Do the processing operations performed in Thailand substantially transform the Chinese greige fabric for purposes of 19 U.S.C. 1304 and 19 CFR 12.130. LAW AND ANALYSIS:

The country of origin rules for textiles and textile products are found at 19 CFR 12.130. For purposes of 12.130, where a textile or textile product, subject to 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854), consists of materials produced or derived from, or processed in, more than one foreign territory or country, or insular possession of the U.S., the country of origin is defined as 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 into a new and different article of commerce. 19 CFR 12.130(b). Thus, the substantial transformation test for textiles embraces two separate findings: (1) whether there has been a new and different article of commerce created, and (2) whether the new article was created by means of a substantial manufacturing or processing operation. See, Mast Industries, Inc. v. United States, 11 CIT 30, 652 F.Supp. 1531 (1987), aff'd, 5 Fed.Cir. 105, 822 F.2d 1069 (1987).

Factors indicating whether or not particular manufacturing/ processing operation is substantial are set forth in 19 CFR 12.130(d)-(e). While 12.130(e)(1)(i) provides that an article or material usually will be a product of the particular country where it has been both dyed and printed when accompanied by two or more of the finishing operations enumerated, 12.130(e)(2) provides that the article or material usually will not be considered to be a product of the particular country by virtue of merely having undergone one or more finishing operations or been dyed and/or printed. (Emphasis supplied).

As the merchandise imported is classifiable in HTSUS section XI and was processed in more than one foreign country, the country of origin rules of 12.130(b) are applicable, and Customs has stated that the principles of origin contained in 12.130 are applicable to such merchandise for all purposes, including duty and marking. T.D. 85-38, 19 Cust.Bull. 58, 68 (1985), and T.D. 90-17, 24 Cust.Bull. 34 (1990). Further, regarding the substantial transformation criteria and examples found at 12.130, Customs has stated that "[a]ny factual situations not squarely within those examples will be decided by Customs in accordance with the provisions of section 12.130(b) and (d)." T.D. 85-38, at p. 72.

After examining the textile samples submitted and for the reasons which follow, we find that the fabric will be a product of Thailand when imported into the U.S., as the Chinese fabric will be substantially transformed by the textile processing operations performed in Thailand. The Chinese greige fabric will be dyed and printed in Mexico and further subjected to two of the finishing operations enumerated at 12.130(e)(1)(i)--bleaching and shrinking. The factual situation fitting squarely within the example set forth at 12.130(e)(1)(i), the regulatory determination is controlling, and specific findings for the criteria at 12.130(b) and (d) are not required.

HOLDING:

The processing operations performed in Thailand substantially transform the Chinese greige fabric for purposes of 19 U.S.C. 1304 and 19 CFR 12.130.

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 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)), which provides that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication is accurate and complete in every material respect. Should it subsequently be 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 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,


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