CLA-2 CO:R:C:G 081888 KK

Margaret H. Sachter, Esq.
Soller, Singer & Horn
No. 10, The Mews
421 Hudson Street
New York, New York 10014

RE: Substantial transformation of wire rods fabricated into chain link fencing fabric

Dear Ms. Sachter:

This is our ruling in response to your letter of March 1, 1988, requesting a binding ruling as to the country of origin of chain link fencing to be imported from the Bahamas.


Wire rod from Trinidad and Tobago is transported to the Bahamas where it is drawn to wire and then cut, twisted and woven into steel wire chain link fencing fabric. Each fifty-foot length of fencing, with widths varying from 26 to 144 inches, is rolled and tied for shipping. The fencing is then galvanized either in the Bahamas or in the United States.


Whether the manufacturing process to which the wire rod will be subjected in the Bahamas to produce chain link fencing satisfies the criteria for substantial transformation of the wire rod into a product of the Bahamas.

Whether the galvanization of the fencing is a second substantial transformation.


The fundamental test for determining a substantial trans- formation is whether the processing, which must be a manufac- turing process, results in a change in name, character or use. Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556, (1908).


In our ruling letter dated July 25, 1986 (file 554164), we ruled that the processing of wire into non-galvanized chain link fence changes the wire in name, character or use, thereby constituting a substantial transformation. The facts in that ruling are similar to the facts under consideration at this time.

In this case, the material is wire rod from Trinidad and Tobago. The initial process by which the wire rod is drawn into wire is not a substantial transformation. See the court's decision in Superior Wire v. United States, 669 F. Supp. 472 (CIT 1987), appeal docketed No. 88-1-20. However, the subsequent twisting and weaving of the wires into a fencing fabric results in article with a new name, character, and use. See our ruling of July 25, 1986, (file 554164).

Galvanizing does not, in and of itself, constitute a substantial transformation. In Ferrostaal Metals Corp.v. United States, 664 F. Supp. 535 (CIT 1987), the court ruled that the heat treatment (annealing) and hot-dip galvanizing of full hard cold rolled steel resulted in a new and different article. Both the mechanical and chemical properties were changed, as noted by the court. Id., page 540. In this case, the coating of fencing by galvanizing is merely a finishing operation performed on a fabricated article. The change, i.e., adding a corrosion- resistant feature to the fencing, does not constitute a manufacture that results in a change in name, character, or use. Galvanizing may be necessary for the effective, long-term use of the fencing, but it does not change the fact that the uncoated article has but one use, i.e., fencing.


In view of the foregoing, the processing of the wire rod in the Bahamas into chain link fencing for export to the United States constitutes a substantial transformation of the wire rod into a product of the Bahamas. Because the fencing is a product of the Bahamas, it would not be subject to the export licensing requirements for certain steel products of Trinidad and Tobago imported into the United States. The additional galvanizing process does not result in a second substantial transformation.


John Durant, Director
Commercial Rulings Division

KKeefe:tj:typed 07/22/88