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HQ 954800

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August 18, 1993

CLA-2 CO:R:C:T 954800 CMR

CATEGORY: CLASSIFICATION

Ms. Brenda S. Powers
Frederick Richards, Inc.
P.O. Box 1267
Charleston, South Carolina 29402

RE: Country of origin ruling HRL 731743 of October 3, 1989; revocation of ruling; 19 CFR 199.7

Dear Ms. Powers:

This ruling is to inform you that Customs has had occasion to review HRL 731743 which was issued to you on October 3, 1989. After re-examination of the facts in HRL 731743, we believe the decision is in error.

FACTS:

The processing was described in HRL 731743 as stated herein. Synthetic staple fiber produced in Malaysia is sent to China where it is processed. These processes include opening, carding, drawing, roving and spinning into single yarn with an "S" twist. The spun yarn is exported to Malaysia for assembly winding into 2 or 3 ply yarn with a "Z" twist, heat setting, spring winding, bleaching and dyeing.

HRL 731743 held that Malaysia was the country of origin of the sewing thread because it was twisted in a "Z" twist and lubricated in Malaysia thus making it usable on a lockstitch sewing machine.

ISSUE:

Does the twisting of yarns into a "Z" twist substantially transform the yarn?

LAW AND ANALYSIS:

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that "classification shall be determined according to the terms of the -2-
headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to [the remaining GRIs taken in order]."

As stated in HRL 731743, the determination of the country of origin of textiles and textile articles is governed by the language of section 12.130 of Volume 19 of the Code of Federal Regulations. Section 12.130 provides that origin will convey where a textile has been transformed by means of a substantial manufacturing or processing operations into a new and different article of commerce.

The processing in Malaysia, twisting, lubricating and finishing, does change the yarn from singles to plied yarn which can be used for sewing, however, it is nonetheless yarn. The yarn has been altered, but it is still recognized as yarn; it is merely a particular type of yarn now. Indeed, classification as sewing thread or yarn under the Harmonized Tariff Schedule is defined as meaning:
multiple (folded) or cabled yarn:

(a) Put up on supports (for example, reels, tubes) of a weight (including support) not exceeding 1000 g;

(b) Dressed; and

(c) With a final "Z" twist.

Thus, in defining sewing thread, it is recognized to be a yarn and if not put up on supports within the proper weight range, it will be classified as a yarn.

Section 12.130(e)(2) provides that an article or material usually will not be considered to be a product of a particular country by merely undergoing, among other things, a simple combining operation. The twisting of the singles into plied yarn with a "Z" twist is not, in our view, a substantial process. It is a simple assembly or combining process accomplished by running the yarns through a machine. The remaining processes which occur in Malaysia after the twisting of the yarns are finishing operations which are generally not viewed as substantially changing an article and are thus disregarded. The spring winding is basically cleaning. Bleaching, dyeing, drying (hydro extraction), lubricating and winding onto cones are finishing operations which do not substantially transform the yarn.

As Customs does not view the processing which occurs in Malaysia to constitute a substantial transformation of the yarn imported from China, the country of origin of the yarn is China where the fibers are spun into yarn.

HOLDING:

In order to insure uniformity and eliminate uncertainty, we are revoking HRL 731743, effective with the date of this letter.

This notice to you should be considered a revocation of HRL 731743 under 19 CFR 177.9(d)(1). It is not to be applied retroactively to HRL 731743 (19 CFR 177.9(d)(2)) and will not, therefore, affect past transactions for the importation of your merchandise under that ruling. However, for the purposes of future transactions in merchandise of this type, this revocation of HRL 731743 will be in effect. We recognize that pending transactions may be adversely affected by this revocation in that current contracts for importation arriving at a port subsequent to this decision will be classified pursuant to it. If such a situation arises, you may, at your discretion, notify this office and may apply for relief from the binding effects of this decision as may be warranted by the circumstances. However, please be advised that in some instances involving import restraints, such relief may require separate approvals from other government agencies.

Sincerely,

John Durant, Director
Commercial Rulings Division

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