CLA-2 CO:R:C:G 082527 PR; NY 828427
TARIFF NO: (no tariff number used)
Mr. Bernard Josephs
Josephs Bros. Embroidery Corporation
6030 Monroe Place
West New York, New Jersey 07093
RE: Country of origin of certain fabric
Dear Mr. Josephs:
This is in reply to your letter of February 9, 1988, as
modified by your letter of January 17, 1989, and telephone
conversations with members of this division, concerning the
country of origin of certain fabric. Our ruling on the matter
follows.
FACTS:
Four samples of fabric were submitted. All are plain
woven and are 65 percent polyester and 35 percent cotton; two
are greige fabrics and two are bleached. Each contains
extensive allover embroidery produced on a Schiffli embroidery
machine, pictures of which were submitted. The base fabrics
will be produced in Thailand, Malaysia, or another country in
the far east, the products of which are entitled to column one
rates of duty. The fabrics will then be sent to the
Dominican Republic where they will be embroidered with complex
designs. Attached as addendum to this ruling are photocopies
of the four fabrics to be imported.
ISSUE:
The issue presented is whether the processing in the
Dominican Republic is sufficient to convert the fabrics into
products of that country.
LAW AND ANALYSIS:
Section 12.130(b), Customs Regulations, provides that a
textile product 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
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substantial transformation if it has been transformed by means
of substantial manufacturing or processing operations into a
new and different article of commerce.
In addition, Section 12.130(d), Customs Regulations,
provides that a new and different article of commerce will
usually result from manufacturing or processing operations if
there is a change in (1) commercial identity, (2) fundamental
character, or (3) commercial use. That provision also states
that in determining whether merchandise has been subjected to
substantial manufacturing or processing operations, we will
consider the physical change in the material or article, the
time involved, the complexity of the operations, the level or
degree of skill and/or technology involved, and the value
added to the article in each country or territory. Any one or
a combination of these factors may be determinative and other
factors may also be considered.
We recognize that the base fabric is relatively
inexpensive to produce while Schiffli machines are very
costly, expensive to run, and labor intensive. In our view,
the processing of plain woven fabrics into fabrics with
elaborate allover designs containing decorative eyelet
embroidery, done with a Schiffli machine, constitutes
substantial processing into new articles of commerce.
HOLDING:
The four submitted samples, embroidered in the Dominican
Republic, have undergone a substantial transformation and are
considered on importation to be products of that country.
Sincerely,
John Durant, Director
Commercial Rulings Division