CLA-2 RR:CR:TE 959442 RH
Port Director of Customs
Attn: Chief, Residual Liquidation
& Protest Branch
6 World Trade Center, Room 761
New York, NY 10048-0945
Re: Protest Nos. 1001-96-103632, 1001-96-103633, 1001-96-103849,
1001-96-103850;
19 CFR 12.130; finishing operations; shrinkage; country of
origin; dyeing; bleaching; printing; singeing; steaming;
stentering; sanforizing; substantial transformation;
Dear Sir:
This is in reply to your memorandum dated July 1, 1996, regarding
four protests, filed by the law firm of Politis & Politis, on
behalf of Emday Fabrics. The protests were timely filed and
review is warranted pursuant to 19 CFR 174.24(a) and (d).
Each protest is against a Notice to Redeliver stating that the
fabrics in question are products of China for which visas are
required. The protestant does not dispute the classification of
the merchandise under subheading 5516.14.0010 of the Harmonized
Tariff Schedule of the United States Annotated (HTSUSA).
FACTS:
The pertinent facts for each protest are set forth below.
Protest Number 1001-96-103632
This protest was timely filed on May 3, 1996, against a Notice to
Redeliver dated February 5, 1996. The merchandise in question is
27,907 meters of Chinese greige goods which the protestant claims
was substantially transformed in Turkey. Counsel claims that the
greige fabrics underwent singeing, desizing, bleaching,
stentering, dyeing, washing, stentering, printing, steaming,
washing, stentering, preshrinking, inspection and packing at Ete
Mensucat in Turkey.
- 2 -
Protest Number 1001-96-103633
This protest was timely filed on May 3, 1996, against a Notice to
Redeliver dated February 5, 1996. The fabric in question was
woven in China, and the protestant claims that it underwent
singeing, scouring (desizing), bleaching, stentering, dyeing,
stentering, printing, steaming, washing, stentering, pre-shrinking (Sanforizing ), inspection and packing, in Turkey by
Akbaslar Tekstil Sanayi Ve Ticaret A.S.
Protest Number 1001-96-103849
The protestant timely filed this action on May 10, 1996, against
a Notice to Redeliver dated February 12, 1996. The fabric in
question was woven in China and shipped to Turkey where the
protestant alleges Savcan Tekstil Sanayi Ve Ticaret A.S.
performed singeing, caustification (desizing), bleaching,
stentering, dyeing, stentering, printing, steaming, washing,
stentering, pre-shrinking (Sanforizing ), inspection and packing.
Protest Number 1001-96-103850
This protest was timely filed on May 10, 1996, against a Notice
to Redeliver dated February 12, 1996. The fabric at issue was
woven in China, and the Turkish manufacturer is Hamzagil Sanayi
Ve Ticaret A.S. The protestant asserts that the fabrics
underwent singeing, scouring (desizing), bleaching, stentering,
dyeing, stentering, printing, steaming, washing, stentering, pre-shrinking (Sanforizing ), inspection and packing.
In all four protests, a Customs laboratory determined that the
fabrics were bleached, dyed and printed in Turkey but did not
undergo a preshrinking process.
ISSUE:
Were the Chinese greige fabrics in question substantially
transformed in Turkey pursuant to
19 CFR 12.130?
LAW AND ANALYSIS:
At the time the fabrics in question entered the United States,
Section 12.130 of the Customs Regulations (19 CFR 12.130(b))
governed the country of origin determinations for textiles and
textile products subject to Section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C.
1854). Under that provision, the country of origin of textile
products was deemed to be that foreign territory or country where
the article last underwent a substantial transformation.
Substantial transformation occurs when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing.
- 3 -
The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(e). Section 12.130(e)(1) provides:
An article or material usually will be a product of a
particular foreign territory or country, or insular
possession of the U.S., when it has undergone prior to
importation into the U.S. in that foreign territory or
country, or insular possession any of the following:
(i) Dyeing of fabric and printing when accompanied
by two or more of the following finishing
operations: bleaching, shrinking, fulling,
napping, decating, permanent stiffening,
weighting, permanent embossing, or moireing.
Section 12.130(e)(2) further provides:
An article or material usually will not be considered
to be a product of a particular foreign territory or
country, or insular possession of the U.S. by virtue of
merely having undergone any of the following:
* * *
(iv) One or more finishing operations on
yarns, fabrics, or other textile articles,
such as showerproofing, superwashing,
bleaching, decating, fulling, shrinking,
mercerizing, or similar operations; or
(v) Dyeing and/or printing of fabrics or
yarns.
Counsel argues that Customs must consider the final stentering
operations in each protest as one of the finishing operations
enumerated in the regulations because it is the same as a
decating process. Additionally, counsel states that the Chinese
greige goods were significantly changed in Turkey and that the
fundamental character of the fabric changed from a crude
unfinished product into a finished, new and different article of
commerce. He also claims that the cost of the greige goods is
far less than half of the finished fabric, which demonstrates the
complex and time-consuming nature of the processing in Turkey.
Finally, counsel argues that the greige goods had no use other
than to be processed into finished fabric whereas the finished
fabric has many commercial uses.
Customs has been consistent in its determinations that where
dyeing and printing are not accompanied by two or more of the
operations enumerated in 19 CFR 12.130(e)(1), or where
processing involves only one or more finishing operation with no
dyeing and printing, or dyeing and printing alone, substantial
transformation does not occur for country of origin purposes.
See, Headquarters Ruling Letter (HQ) 734262, dated January 6,
1992, wherein Customs held that greige fabric which was treated
by bleaching, dyeing, printing, and resin finishing, including
- 4 -
special coating of the fabric, was not substantially transformed;
HQ 734435, dated January 10, 1991 (greige fabric produced in
Taiwan and processed in Hong Kong by desizing, scouring,
bleaching, dyeing, softening, stentering and calendering, was not
substantially transformed
because the dyeing operation was not in conjunction with a
printing operation); HQ 089230,
dated May 10, 1991 (Chinese greige fabric exported to Hong Kong
where it underwent scouring,
bleaching, printing, napping and preshrinking, was not
substantially transformed in Hong Kong); HQ 953905, dated July
30, 1993 (fabrics which were dyed and printed and then underwent
scouring, singeing, mercerizing and bleaching did not satisfy the
two additional operations enumerated in 12.130(e) and were not
substantially transformed); HQ 953191, dated May 14, 1993 (a
substantial transformation did not occur in Kuwait where greige
fabric was desized and washed, scoured, shrunk, bleached, dyed,
sized and finished and cut on four sides and hemmed);
HQ 088901, dated July 5, 1991 (greige fabric shipped to Israel
where it was cut and sewn into 3000 foot lengths, singed and
desized, washed, dried, subjected to thermofixation (heating the
fabric to fix the final elasticity), bleached, printed, placed on
a stentor frame, dyed (a light shading), washed, calendered,
washed, and pressed, was not substantially transformed because
Customs found that the fabric was not printed and dyed).
Customs interpretation of 19 CFR 12.130 was upheld by the United
States Court of International Trade in Mast Industries Inc. v.
United States, 652 F. Supp. 1531 (1987); aff'd 822.F. 2d 1069
(CAFC, 1989). That case involved greige cotton fabric produced
in China and sent to Hong Kong for singeing, desizing, scouring,
bleaching, mercerizing, dyeing, softening, and stentering. The
court stated that in determining the meaning of an agency's
regulation, it would defer to that agency's interpretation unless
the interpretation is plainly erroneous or inconsistent with the
regulation. The court found that Customs' interpretation was
reasonable and approved of Customs denying entry to the finished
fabric without a visa from the Government of China.
Thus, we disagree with counsel that the finishing operations
performed on the subject fabric, i.e., singeing, steaming,
washing, condensing, and drying are substantial processes.
In determining that the fabrics had not been preshrunk, Customs
relied upon the standards set forth in the American Society for
Testing and Materials (ASTM) Standard D 4038. This performance
specification covers woven women's and girls' dress and blouse
fabrics composed of any textile fiber or mixture of textile
fibers. Section 1.1, ASTM 4038. The standard instructs that
dimensional change be determined in accordance with the procedure
set out in the AATCC (American Association of Chemists and
Colorists) Test Method 135. The maximum allowable dimensional
change recommended by the ASTM 4038 standard is 3 percent.
It is well established that Customs has the statutory authority
to verify the nature of imports using, among other methods,
laboratory testing. 19 U.S.C. 1499 (1994). Additionally, It is
well established that the methods of weighing, measuring, and
testing merchandise used by customs officers and the results
obtained are presumed to be correct. See, Exxon v. United
States, 462 F. Supp 378 (1978), 81 Cust. Ct. 87, Cust. Dec. 4772.
The burden of proof rests with the importer to overcome the
presumption that Customs has the expertise and knowledge to use
standard methods and analysis techniques to obtain accurate
results. HQ 950794, dated March 25, 1992.
- 5 -
In this case, the 3 percent maximum allowable dimensional change
used by the Customs laboratory to determine if the imported
fabrics were preshrunk is a recognized industry standard. The
ASTM standards are recognized by both the government and the
industry. HQ 224349, dated February 18, 1994. Recognition by
Customs of the ASTM standards for weighing, measuring and testing
merchandise is exhibited by an array of Customs rulings, a small
sampling of which include: HQ 085912, dated February 6, 1990
(Customs is of the opinion that the use of the ASTM standards
will properly fulfill Congressional intent regarding the
definition of a tariff term; HQ 081157, dated April 25, 1989 (it
has always been Customs practice, as well as an industry
practice, that any product which does not meet the ASTM D 439
specifications may not be considered automotive gasoline for
either Customs or commercial purposes); HQ 086218, dated March
26, 1990 (it has consistently been the position of Customs to
utilize substantiality of construction as essential to a finding
that an article is designed for travel and thus could be
designated as luggage - Customs Service has used the ASTM
designation D1593-91 as the
basis for determining substantiality); HQ 111846, dated April 28,
1992 (Customs has adopted for most cases standards established by
the ASTM to determine whether the gasoline or blending components
of gasoline are transformed into new and different products
because such standards represent industry developed criteria for
characterizing fuel oils); HQ 224340, dated May 25, 1994 (Customs
uses the ASTM standards to determine fungibility for certain
products); HQ 953997, dated January 24, 1994 (ASTM D3597-89 has
been adopted by Customs as the proper test method which sets
forth the abrasion standards for woven upholstery fabrics); HQ
954018, dated September 23, 1993 (in considering whether a
product consisting of 75 percent gray Portland cement and 25
percent calcium carbonate is classifiable as Portland cements,
Customs consulted several standards established by the ASTM).
Under its statutory authority to verify the nature of imports
using laboratory testing, Customs has a long history of relying
on industry standards for its methods of weighing, measuring and
testing merchandise. There is also a presumption that the test
methods and analysis technique of the Customs laboratory was
correct. Exxon, supra. The AATCC 135 is a test method intended
for the determination of dimensional changes in woven and knit
fabrics when subjected to repeated automatic laundering
procedures commonly used in the home. "Dimensional change" is
defined in section 3.1 of the test method as "a generic term for
changes in length or width of a fabric specimen subjected to
specified conditions. The change is usually expressed as a
percentage of the initial dimension of the specimen." Section
3.4 describes "shrinkage" as "a dimensional change resulting in a
decrease in the length or width of a specimen."
The AATCC 135 test method provides that delicate fabrics shall be
machine washed on delicate cycle for 8 minutes in 120 +/- 5 F.
It then provides that the fabrics be tumble dried on delicate
cycle or line, drip or screen dried.
- 6 -
Because the Customs laboratory which did the test is not equipped
with a washing machine, Customs also consulted TEXTILE TESTING
Physical, Chemical and Microscopical (1949) by John H. Skindle,
Associate Professor of Textile Chemistry, Lowell Textile
Institute. This text describes in detail the ASTM test methods
for rayon woven goods. At page 117 the author states that the
"Wash Wheel Testing Method" and "Launderometer Method" type of
tests are suitable for laboratories doing a lot of shrinkage
testing, but another method requiring no special apparatus would
be desirable for laboratories making only occasional tests. An
example of such a method is described at page 118. The sample
fabric is immersed in a beaker containing 0.3 percent soap
solution in water at 40 degrees C for at least two hours. The
sample is then rinsed, squeezed as dry as possible and dry-ironed. The sample is rewet, wrung out, ironed until dry,
conditioned several hours and then measured again.
The author states that:
A guaranteed shrinkproof or 100% shrinkproof fabric
should have no appreciable shrinkage; a pre-shrunk
fabric should have only a small amount of shrinkage (1-2%). A Sanforized label implies not over 1% shrinkage
in any direction and should be so understood. In
general, we may say that, even without any label or
claim, a shrinkage of more than 5% in either direction
is excessive, except in the case of wool.
Customs tailored its test after the AATCC 135 and Testing Textile
methods. The method Customs used was as follows:
A 12" x 12" test sample from the submitted fabric was
tested for shrinkage. The sample was marked 10" apart
in the warp and filling direction with an indelible ink
marker. The marked sample was treated at 38 ([plus or
minus] 1) degree centigrade or 100 ([plus or minus] 2)
degrees fehrenheit for 15 minutes with a 0.5% soap
solution (1:30 material to liquor ratio). Then the
treated sample was washed with water (38 c or 100 f)
for 5 minutes followed by a warm wash (25 c or 77 f)
for 5 minutes and then a cold wash also for 5 minutes.
The sample was dried flat. The distances between two
markings were measured and the percent shrinkage
calculated.
In all but one of the protests, counsel claims that the fabrics
were "Sanforized." SANFORIZED is a trademark owned by Cluett,
Peabody and Company, Inc. We contacted a representative from
that company who advised us that Cluett, Peabody and Company,
Inc., recognizes two test methods to determine shrinkage of
SANFORIZED fabrics. One is the Federal Test Method Standard No.
191A, which allows for shrinkage of +/- 1%. The other is the
AATCC 135 which allows for +/- 3%.
- 7 -
Customs test method is comparable to both the AATCC and Testing
Textile methods, and we find no evidence that it is erroneous.
In fact, Customs adopted the least strenuous AATCC and Textile
Testing methods (cooler water temperature, shorter wash cycle, no
dry-ironing, no wringing).
In one of the protests, counsel claims that the fabric was
preshrunk but does not describe the manufacturing process used.
Nevertheless, the fabric in that protest, as well as the other
fabrics in question, shrunk in excess of the 3 percent maximum
allowable industry standard set forth in the ASTM. Accordingly,
they are not considered to be preshrunk for the purposes of 19
CFR 12.130(e)(1).
Finally, we note that the two country of origin declarations
required by 19 CFR 12.130(f), which were submitted with these
four protests, state that the goods were wholly produced in a
single country. If those declarations are accurate, there would
have been no reason for Customs to determine the proper country
of origin of the subject goods.
HOLDING:
The Chinese greige fabrics in question were not substantially
transformed into products of Turkey. The fabrics were dyed,
printed and bleached in Turkey but lacked one of the additional
operations enumerated in 19 CFR 12.130(e).
In accordance with section 3A(11)(b) of Customs Directive Number
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be attached to the Customs Form
19, Notice of Action, and furnished to the protestant no later
than 60 days from the date of this letter. Any reliquidation of
the entry in accordance with the decision must be accomplished
prior to mailing of the decision. Sixty days from the date of
the decision (o n that date) the Office of Regulations and
Rulings will take steps to make the decision available to Customs
personnel via the Customs Ruling Module in ACS and to the public
via the Diskette Subscription Service, Freedom of Information
Act, and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division