HQ 954800: Country of origin ruling HRL 731743 of October 3, 1989; revocation of ruling; 19 CFR 199.7

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 954800 

                         August 18, 1993

CLA-2 CO:R:C:T 954800 CMR

CATEGORY: Classification

Ms. Brenda S. Powers
Frederick Richards, Inc.
P.O. Box 1267
Charleston, South Carolina 29402

RE: Country of origin ruling HRL 731743 of October 3, 1989;       
    revocation of ruling; 19 CFR 199.7

Dear Ms. Powers:

     This ruling is to inform you that Customs has had occasion
to review HRL 731743 which was issued to you on October 3, 1989. 
After re-examination of the facts in HRL 731743, we believe the
decision is in error.

FACTS:

     The processing was described in HRL 731743 as stated herein. 
Synthetic staple fiber produced in Malaysia is sent to China
where it is processed.  These processes include opening, carding,
drawing, roving and spinning into single yarn with an "S" twist. 
The spun yarn is exported to Malaysia for assembly winding into 2
or 3 ply yarn with a "Z" twist, heat setting, spring winding,
bleaching and dyeing.

     HRL 731743 held that Malaysia was the country of origin of
the sewing thread because it was twisted in a "Z" twist and
lubricated in Malaysia thus making it usable on a lockstitch
sewing machine. 

ISSUE:

     Does the twisting of yarns into a "Z" twist substantially
transform the yarn?

LAW AND ANALYSIS:

     Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRIs).  GRI 1 provides that
"classification shall be determined according to the terms of the                               -2-



headings and any relative section or chapter notes and, provided
such headings or notes do not otherwise require, according to
[the remaining GRIs taken in order]."

     As stated in HRL 731743, the determination of the country of
origin of textiles and textile articles is governed by the
language of section 12.130 of Volume 19 of the Code of Federal
Regulations.  Section 12.130 provides that origin will convey
where a textile has been transformed by means of a substantial
manufacturing or processing operations into a new and different
article of commerce.

     The processing in Malaysia, twisting, lubricating and
finishing, does change the yarn from singles to plied yarn which
can be used for sewing, however, it is nonetheless yarn.  The
yarn has been altered, but it is still recognized as yarn; it is
merely a particular type of yarn now.  Indeed, classification as
sewing thread or yarn under the Harmonized Tariff Schedule is
defined as meaning: 

     multiple (folded) or cabled yarn:

          (a) Put up on supports (for example, reels, tubes) of a
          weight (including support) not exceeding 1000 g;

          (b) Dressed; and

          (c) With a final "Z" twist.

Thus, in defining sewing thread, it is recognized to be a yarn
and if not put up on supports within the proper weight range, it
will be classified as a yarn.

     Section 12.130(e)(2) provides that an article or material
usually will not be considered to be a product of a particular
country by merely undergoing, among other things, a simple
combining operation.  The twisting of the singles into plied yarn
with a "Z" twist is not, in our view, a substantial process.  It
is a simple assembly or combining process accomplished by running
the yarns through a machine.  The remaining processes which occur
in Malaysia after the twisting of the yarns are finishing
operations which are generally not viewed as substantially
changing an article and are thus disregarded.  The spring winding
is basically cleaning.  Bleaching, dyeing, drying (hydro
extraction), lubricating and winding onto cones are finishing
operations which do not substantially transform the yarn.
                               -3-



     As Customs does not view the processing which occurs in
Malaysia to constitute a substantial transformation of the yarn
imported from China, the country of origin of the yarn is China
where the fibers are spun into yarn.

HOLDING:

     In order to insure uniformity and eliminate uncertainty, we
are revoking HRL 731743, effective with the date of this letter. 

     This notice to you should be considered a revocation of HRL
731743 under 19 CFR 177.9(d)(1).  It is not to be applied
retroactively to HRL 731743 (19 CFR 177.9(d)(2)) and will not,
therefore, affect past transactions for the importation of your
merchandise under that ruling.  However, for the purposes of
future transactions in merchandise of this type, this revocation
of HRL 731743 will be in effect.  We recognize that pending 
transactions may be adversely affected by this revocation in that
current contracts for importation arriving at a port subsequent
to this decision will be classified pursuant to it.  If such a
situation arises, you may, at your discretion, notify this office
and may apply for relief from the binding effects of this
decision as may be warranted by the circumstances.  However,
please be advised that in some instances involving import
restraints, such relief may require separate approvals from other
government agencies.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division