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HQ 231004




June 30, 2005

CON-9-04 RR:CR:DR 231004 RDC

CATEGORY: TEMPORARY IMPORTATION BOND

Larry Ordet, Esq.
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, FL 33126-2022

RE: American Textile Company; temporary importation under bond; subheading 9813.00.05, HTSUS; cotton fabric; application of flame retardant; process.

Dear Mr. Ordet:

This is in response to your letter of 5/3/2005, on behalf of your client, American Textile Company, which was received in this office via electronic mail on 6/2/2005. On 6/7/2005 we received via facsimile the additional information requested. In your letter you request a binding ruling regarding importing cotton fabric into the U.S. for processing and subsequent export under subheading 9813.00.05, HTSUS, (Harmonized Tariff Schedule of the United States).

FACTS:

American Textile Company will import cotton fabric into the U.S. from El Salvador. You describe the cotton fabric as “plain weave and bleached” with a weight of 136 grams per square meter and an average yarn size of 42 or less. In the U.S. a flame retardant will be applied to the fabric. First, the cotton is impregnated with a phosphonium salt precondensate chemical. This chemical promotes the charring of the fabric which inhibits combustion by reducing the fuel source thereby rendering the fabric flame retardant. After this chemical is applied, the fabric is dried and then cured with ammonia gas. Finally, the fabric is oxidized and neutralized to remove any residual by products. The cotton is then exported back to El Salvador.

ISSUE:

Whether the application of the flame retardant is a process for purposes of subheading 9813.00.05, HTSUS?

LAW AND ANALYSIS:

General Note 1, HTSUS, dictates that all merchandise imported into the United States is subject to duty unless specifically exempted there from. Pursuant to U.S. Notes 1(a) and (c) of Subchapter XIII of Chapter 98, HTSUS, which contains subheading 9813.00.05, articles to be repaired, altered or processed, including processes which result in articles manufactured or produced in the United States, may enter into the U.S. temporarily free of duty under a Temporary Importation Under Bond (TIB) for exportation within one year from the date of importation. This one-year period may be extended for one or more additional periods, which when added to the initial period may not exceed three years. See 19 C.F.R. § 10.37. The imported merchandise may not be imported for the purpose of a sale or sale on approval.

Articles may be entered into the U.S. under subheading 9813.00.05, HTSUS, only if they are to be “repaired, altered or processed.” You assert that the application of a flame retardant to the cotton is a process for purposes of TIB. In Headquarters Ruling Letter (HRL) 224661 (1/11/1994), which pertained to subheading 9813.00.05, we stated that “[t]he processing can be a relatively minor procedure or extensive enough to be considered a manufacture or production.” In HRL 228825 (6/14/2000) we held that the seaming, de-sizing, scouring, bleaching, dyeing, heat setting, finishing and cauterizing of cotton greige goods falls within the definition of process for purposes of subheading 9813.00.05, HTSUS. In HRL 226858 (7/12/1996) we determined that the dyeing and sizing of hat bodies is a processing. In HRL 225700 (6/16/1995) it was decided that impregnation of fabric with plastic resin qualified as a processing under subheading 9813.00.05, HTSUS.

We have also held the following to be a process for purposes of importation under subheading 9813.00.05, HTSUS: the application of adhesive coating to polyester film (HRL HQ 227432, 4/23/1997); application of waterborne coating or “dry lube” to stainless steel strip in coils (HRL 230110, 12/12/2003). Based on the above precedent, the steps taken to apply the instant flame retardant to the imported cotton constitutes a process for purposes of subheading 9813.00.05, HTSUS.

Finally we note that the imported cotton may be subject to visa requirements as well as quota. Any merchandise subject to a quota which has been filled cannot be released under a temporary importation bond (see T.D.s 54802(53) and (54). However, entry under subheading 9813.00.05, HTSUS, is not precluded if the textiles are subject to a quota when the quota is not filled. Since TIB entries are considered consumption entries for purposes of administering quotas, the merchandise entered under TIB would be charged against the quota. (See also HRL 225785, 4/11/1995; HRL 224687, 5/13/1993). The bond for the TIB should be set in an amount to take into account the tariff rate quota in order to protect the revenue (see HRL 225642, 4/3/1995).

HOLDING:

The application of a flame retardant to the cotton fabric is a process for purposes of temporary importation under subheading 9813.00.05, HTSUS.

Sincerely,

Myles B. Harmon, Director

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