HQ 953229: Country of origin under 19 CFR 12.130 for certain rayon fabrics; bleaching; significant process.

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 953229

                        December 21, 1993

CLA-2 CO:R:C:T 953229 ch

CATEGORY:  Classification

Jane B. O'Dell
Senior Manager
KPMG Peat Marwick
3100 Two Union Square
601 Union Street
Seattle, Washington  98101-2327

RE:  Country of origin under 19 CFR 12.130 for certain rayon
     fabrics; bleaching; significant process.

Dear Ms. O'Dell:

     This letter is in response to your inquiry, dated January 4,
1993, on behalf of your client, B. Rawe BmbH, requesting a
country of origin determination for certain rayon fabrics woven
in Korea or Taiwan and further processed in Germany.

FACTS:

     The submitted samples are woven rayon fabrics designated as
Cinderella, Belinda, Cosana, Jauako, Cilla and Christina.  A
laboratory analysis of the sample entitled Cinderella indicates
that it is composed of approximately equal parts filament and
staple rayon.  The fabrics are woven in Korea or Taiwan.  In
Germany, they are scoured, bleached, sanforized (pre-shrunk),
printed and dyed.  You have submitted samples of the greige
fabrics prior to bleaching, as well as samples of the finished
products.  Pursuant to our request, you have furnished this
office with printed and dyed products from greige fabrics which
have merely been scoured, as well as from greige fabrics which
have been both scoured and bleached.

ISSUE:

     What is the country of origin for the subject merchandise?

LAW AND ANALYSIS:

     Country of origin determinations for textile products are
subject to Section 12.130 of the Customs Regulations (19 CFR
12.130).  Section 12.130(b) provides that a textile product that
is processed in more than one country or territory shall be a
product of that country or territory where it last underwent
substantial transformation.  A textile product will be considered
to have undergone a substantial transformation if it has been
transformed by means of substantial manufacturing or processing
operations into a new and different article of commerce.

     Section 12.130(d) of the Customs Regulations sets forth
criteria in determining whether a substantial transformation of a
textile product has taken place.  This regulation states that
these criteria are not exhaustive; one or any combination of
criteria may be determinative, and additional factors may be
considered.

     Section 12.130(d)(1) states that a new and different article
of commerce will usually result from a manufacturing or
processing operation if there is a change in:

     (i)    Commercial designation or identity,
     (ii)   Fundamental character or
     (iii)  Commercial use.

     Section 12.130(d)(2) of the Customs Regulations states that
in determining whether merchandise has been subjected to
substantial manufacturing or processing operations, the following
will be considered:

     (i)  The physical change in the material or article as
     a result of the manufacturing or processing operations
     in each foreign territory or country, or insular
     possession of the United States.

     (ii)  The time involved in the manufacturing or
     processing operations in each foreign territory or
     country, or insular possession of the United States.

     (iii)  The complexity of the manufacturing or
     processing operations in each foreign territory or
     country, or insular possession of the United States.

     (iv)  The level or degree of skill and/or technology
     required in the manufacturing or processing operations
     in each foreign territory or country, or insular
     possession of the United States.

     (v)  The value added to the article or material in each
     foreign territory or country, or insular possession of
     the United States, compared to its value when imported
     into the United States.

     Section 12.130(e)(1) clarifies the application of these
standards by setting forth examples of processing operations
which will usually result in a substantial transformation.
Subsection 12.130(e)(1)(i) provides for:

     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.  (Emphasis added).

In this instance, each of the fabrics has been dyed and printed
and has been subjected to the finishing operations of bleaching
and shrinking.  Hence, it appears that they underwent a
substantial transformation in Germany.  (See Headquarters Ruling
Letter (HRL) 734354 and HRL 734351, dated March 2, 1992, rayon
greige fabrics exported to a second country are products of that
second country for marking purposes when they have been printed,
dyed, bleached and pre-shrunk).

     However, in HRL 078040, dated November 24, 1986, we were
asked to determine the country of origin for 100 percent rayon
greige goods exported from China to West Germany.  In Germany,
the fabrics were dyed, printed, bleached and treated to prevent
shrinkage.  In that decision, we stated:

     It is our understanding that fabrics composed of man-
     made fibers are commonly white or off-white as
     manufactured.  In this case involving greige fabric of
     man-made fibers that is to be dyed and printed,
     bleaching which is chemical process used to whiten
     fabrics, yarns, or fibers is superfluous.  Under these
     circumstances, bleaching is excluded as one of the
     processing operations that usually will result in a
     substantial transformation.

This language indicates that bleaching man-made fibers such as
rayon is normally not a substantial manufacturing process despite
the general rule contained in Subsection 12.130(e)(1)(i).  

     Similarly, in HRL 084243, dated July 19, 1989, certain rayon
greige fabrics were exported to Canada where they were dyed,
printed, bleached and sanforized.  In that ruling, we concluded
that the processes undertaken in Canada were "unnecessary in the
overall finishing of the fabric."  For this reason, we again
found that the bleaching of rayon greige fabric was not a
substantial manufacturing process.

     At a meeting held at Customs Headquarters on September 22,
1993, you argued that bleaching was a necessary process in the
manufacture of the instant merchandise.  Specifically, you
contended that bleaching insures an even background for dyeing,
so that the final products are uniform in color and without flaws
caused by impurities contained in the underlying fabric.  In
order to substantiate your claims, you offered to supply this
office with samples of the finished product printed and dyed on
scoured and bleached greige fabrics, as well as on greige fabrics
which had merely been scoured.  

     In light of the arguments you advanced at our initial
meeting, we consulted with specialists in the area of textile
chemistry.  Based upon these inquiries, we have confirmed that
many manufacturers do not bleach man-made fibers such as rayon
unless the final product is white.  However, certain high quality
fabrics of man-made fibers are bleached in order to obtain a high
and uniform degree of whiteness to ensure the purity of bright
dye shades.  Bleaching of rayon fabrics is particularly useful
when the fabric is dyed with a light, soft hue or tint.  Under
these circumstances, the bleaching of rayon fabric would not be
superfluous or unnecessary.

     On November 9, 1993, a second conference was convened to
inspect several samples of the instant merchandise which had been
dyed and printed with various colors and designs.  Each pattern
was printed upon rayon fabric which had been scoured, as well as
rayon fabric which had been both scoured and bleached. 
Representatives from the Office of Regulations and Rulings and
the Office of Laboratories and Scientific Services attended this
meeting on behalf of Customs.

     Upon close examination of the fabric samples we noticed
appreciable overall differences in color between the bleached and
unbleached rayon fabrics.  These differences were particularly
evident in the samples which were dyed with light colors.  In
addition, you were able to identify slight impurities or
variations in color found in the unbleached fabrics which were
not present in the bleached fabrics.  Finally, the submitted
samples appeared to be high quality fabrics which would be
marketed to a discriminating clientele.  Hence, it is reasonable
to conclude that the benefits conferred upon the materials
through bleaching would enhance their marketability.  For these
reasons, we find that you have affirmatively demonstrated that
bleaching the merchandise is a substantial manufacturing process
in this instance.

     As the subject merchandise has been dyed, printed, bleached
and sanforized (pre-shrunk) in Germany, it is a product of that
country pursuant to Subsection 12.130(e)(1)(i).

HOLDING:

     The country of origin of the subject merchandise is Germany.
  
     The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request.  This position is clearly set forth in section
177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)), which
states that a ruling letter is issued on the assumption that all
the information furnished in connection with the ruling request
and incorporated in the ruling letter, either directly, by
reference, or by implication, is accurate and complete in every
material respect.  Should it subsequently be determined that the
information furnished is not complete and does not comply with 19
CFR 177.9(b)(1), the ruling will be subject to modification or
revocation.  In the event there is a change in the facts
previously furnished this may affect the determination of country
of origin.  Accordingly, it is recommended that a new ruling
request be submitted in accordance with section 177.2, Customs
Regulations (19 CFR 177.2).  

                         Sincerely,



                         John Durant, Director