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HQ 952220


September 24, 1992

CLA-2 CO:R:C:T 952220 CAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 5508.10.0000

Frank G. Bates
Gutermann of America, Inc.
P.O. Box 7387
Charlotte, N.C. 28241-7387

RE: Country of origin of sewing thread; classifiable in Heading 5508; Section XI, Note 5.

Dear Mr. Bates:

This letter is in response to your inquiry of July 9, 1992, requesting a tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) and a country of origin ruling.

FACTS:

A box of six spools of spun 100% polyester thread was submitted for examination. Each spool measures 100 meters and weighs 7.26 grams. According to a Customs Laboratory report, the sample thread consists of a dressed, three ply yarn containing a final Z twist of 18.3 turns per inch.

The importer states that he intends to export large cones of sewing thread, 1-2 kilos, from the Gutermann plant in Germany, to the Gutermann plant in Mexico. In Mexico, the sewing thread will be rewound onto smaller spools with varying lengths ranging from 100 to 250 meters. The spools of thread will then be shipped to the United States.

ISSUE:

I. What is the applicable tariff classification for the merchandise in question?

II. What is the country of origin for the merchandise in question?

LAW AND ANALYSIS:

I. 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, taken in order. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's.

Heading 5508, HTSUSA, provides for sewing thread of man- made staple fibers, whether or not put up for retail sale. Section XI, Note 5, which pertains to textiles and textile articles states the following:

For the purposes of headings 5204, 5401 and 5508, the expression "sewing thread" means multiple (folded) or cabled yarn:

(a) Put up on supports (for example, reels, tubes) of a weight (including support) not exceeding 1,000 g:

(b) Dressed; and

(c) With a final "Z" twist.

The sample meets the requirements for sewing thread in accordance with Section XI, Note 5. Consequently, the merchandise in question is classifiable under Heading 5508.

II. 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

(iii) The complexity of the manufacturing or processing

(iv) The level or degree of skill

(v) The value added to the article or material

When applying the above criteria to this situation, it does not appear that the sewing thread will undergo a substantial transformation in Mexico. The minor processing in Mexico will simply involve rewinding the thread onto smaller spools. This process does not amount to the complex operation requirements referred to in Section 12.130(d)(2). Thus, the country of origin for the article in question is Germany.

HOLDING:

The country of origin for the merchandise in question is Germany.

Based on the foregoing, the instant merchandise is classifiable in subheading 5508.10.0000, HTSUSA, which provides for sewing thread of man-made staple fibers, whether or not put up for retail sale. The applicable rate of duty is 13 percent ad valorem, and the textile restraint category is 200.

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 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 section 177.2, Customs Regulations (19 CFR 177.2).

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 importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Rulings Division

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