HQ 082527: Country of origin of certain fabric

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 082527

                                      March 9, 1989

             CLA-2 CO:R:C:G   082527 PR; NY 828427

             CATEGORY:  Classification

             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