CLA-2 RR:CR:TE 959788 RH
Port Director of Customs
Attn: Chief, Residual Liquidation
& Protest Branch
6 World Trade Center, Room 761
New York, NY 10048-0945
Re: Protest Number 1001-96-104367; Country of origin; 19 CFR 12.130; substantial
transformation; finishing operations; shrinkage; sanforizing
Dear Sir:
This is in reply to your memorandum dated September 20, 1996, regarding the Application for Further Review of Protest (AFR) Number 1001-96-104367, filed by the law firm of Folick & Bessich, P.C., on behalf of Euro-American Textile Corporation.
The protestant changed counsel and are now represented by the law firm of Grunfeld, Desiderio, Lebowitz & Silverman, LLP. Members of my staff met with Mr. Harold Loring of that firm on April 14, 1999, to discuss the issues raised in this case. As a result of the meeting, Mr. Loring tendered another submission on April 26, 1999.
FACTS:
The merchandise in question is 100 percent spun rayon fabric (crepon printed fabric - Article 150 and challis printed fabric - Article 144), which the protestant entered into the United States on December 7, 1995. At the time of entry, the protestant listed Turkey as the country of origin of the fabrics.
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One day after entry, on December 8, 1995, Customs sent a Request for Information (CF 28) to the protestant in which it advised the protestant that the merchandise was conditionally released “pending lab analysis.”
In the meantime, a Customs laboratory examined a sample of the fabrics and determined that Article 150 had been bleached, dyed and printed, and that Article 144 had been bleached and printed. Based on that information, Customs issued a Notice of Redelivery (CF 4647) dated March 11, 1996, informing the protestant that the fabric did not satisfy the requirements of 19 CFR §12.130, and instructed the protestant to submit a visa category 611 from China for the fabrics as they did not undergo a substantial transformation in Turkey.
The protestant failed to submit the category 611 visas or redeliver the merchandise, and Customs liquidated the entry on May 31, 1996. The protestant timely filed this AFR on the same day.
Further review is warranted under 19 CFR §174.24(b).
ISSUE:
Whether the Chinese greige fabric was 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 is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing.
Counsel asserts that Turkey is the country of origin of the Chinese greige fabrics at issue because they were substantially transformed there. The protestant submitted a Multiply Country Declaration from Ipeker Tekstil Tic ve Sanayii Anomin Sirketi, the Turkish manufacturer (Ipeker), which states that the Article 150 fabric and the Article 144 fabric were woven in China and underwent the following processing operations in Turkey: singing; bleaching; drying; dyeing; washing; printing; steaming; washing; drying; finishing; condensing; sanforizing (shrinkage); packing stages.
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The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d). Section 12.130(e)(1) provides:
[A]n 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:
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(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.
Customs does not contest that the fabrics was printed and bleached in Turkey. However, a Customs laboratory found no indication that the Article 144 fabric underwent any of the other finishing operations enumerated in 19 CFR 12.130(e)(2). As stated in 19 CFR §12.130(e)(1) and in the rulings cited above, an article must be both dyed and printed (accompanied by two or more of the enumerated finishing operations) to undergo a substantial transformation. Since the protestant submitted no evidence to rebut Customs laboratory findings, we find that the Article 144 fabric was not dyed. As a result, the issue regarding shrinkage for this fabric is moot.
In determining that the Article 150 fabric had not been subjected to a shrinking process, 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
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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.
Congress granted Customs 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.
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. Thus, we disagree with the protestant’s claim that Customs arbitrarily imposed the ASTM D 4038 standard of 3 percent to measure shrinkage of the fabrics.
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There is also a presumption that the test methods and analysis technique of the Customs laboratory was correct. 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 at a temperature of 120 +/- 5º F. It then provides that the fabrics be tumble dried on delicate cycle or line, drip or screen dried.
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 minus] 1) degree centigrade or 100 ([plus 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
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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.
The Multiple Country Declaration submitted by the Turkish manufacturer, Ipeker, states 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% +/-.
Counsel states that the Article 150 fabric was actually “sanforized” by a “Montortex sanforizing machine.” We also contacted a representative in Germany from the manufacturer of the Monfortex machine, Monfort Gmbh & Co. Moreover, the literature we received from Monfort stated that “[a]s a rule, residual shrinkage should not exceed +/- 1%.”
Customs test method is comparable to both the AATCC 135, the Federal Test Method Standard No. 191A, and the Monfortex standard, although Customs adopted less strenuous methods (cooler water temperature, shorter wash cycle, no dry-ironing, no wringing). We find no evidence that Customs test method was erroneous. Additionally, Customs has ruled previously that the presumption of correctness attached to a Customs laboratory analysis was not overcome by conflicting results from independent laboratory analyses, even when the same method of testing was utilized by both Customs and the independent laboratories. See HQ 070173, dated December 27, 1982.
As the Article 150 fabric shrunk in excess of the 3 percent maximum allowable industry standard set forth in the ASTM, there is no evidence showing that the Article 150 fabric was subjected to a shrinking process for the purposes of 19 CFR §12.130(c)(1)./*
HOLDING:
The fabrics in question did not meet the requirements for substantial transformation set forth in 19 CFR §12.130(e)(2). Accordingly, the should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to the mailing of this decision.
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Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division