HQ 081888: Substantial transformation of wire rods fabricated into chain link fencing 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 081888

                                   August 1, 1988

          CLA-2 CO:R:C:G  081888 KK

          CATEGORY: Classification

          TARIFF NO.:  None

          Margaret H. Sachter, Esq.
          Soller, Singer & Horn
          No. 10, The Mews
          421 Hudson Street
          New York, New York 10014

          RE: Substantial transformation of wire rods fabricated into
              chain link fencing fabric

          Dear Ms. Sachter:

               This is our ruling in response to your letter of March 1,
          1988, requesting a binding ruling as to the country of origin of
          chain link fencing to be imported from the Bahamas.

          FACTS:

               Wire rod from Trinidad and Tobago is transported to the
          Bahamas where it is drawn to wire and then cut, twisted and woven
          into steel wire chain link fencing fabric.  Each fifty-foot
          length of fencing, with widths varying from 26 to 144 inches, is
          rolled and tied for shipping.  The fencing is then galvanized
          either in the Bahamas or in the United States.

          ISSUES:

               Whether the manufacturing process to which the wire rod will
          be subjected in the Bahamas to produce chain link fencing
          satisfies the criteria for substantial transformation of the wire
          rod into a product of the Bahamas.

               Whether the galvanization of the fencing is a second
          substantial transformation.

          LAW AND ANALYSIS:

               The fundamental test for determining a substantial trans-
          formation is whether the processing, which must be a manufac-
          turing process, results in a change in name, character or use.
          Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556,
          (1908).













                                         -2-


               In our ruling letter dated July 25, 1986 (file 554164), we
          ruled that the processing of wire into non-galvanized chain link
          fence changes the wire in name, character or use, thereby
          constituting a substantial transformation.  The facts in that
          ruling are similar to the facts under consideration at this time.

               In this case, the material is wire rod from Trinidad and
          Tobago.  The initial process by which the wire rod is drawn into
          wire is not a substantial transformation.  See the court's
          decision in Superior Wire v. United States, 669 F. Supp. 472 (CIT
          1987), appeal docketed No. 88-1-20.  However, the subsequent
          twisting and weaving of the wires into a fencing fabric results
          in article with a new name, character, and use.  See our ruling
          of July 25, 1986, (file 554164).

               Galvanizing does not, in and of itself, constitute a
          substantial transformation.  In Ferrostaal Metals Corp.v. United
          States, 664 F. Supp. 535 (CIT 1987), the court ruled that the
          heat treatment (annealing) and hot-dip galvanizing of full hard
          cold rolled steel resulted in a new and different article.  Both
          the mechanical and chemical properties were changed, as noted by
          the court.  Id., page 540.  In this case, the coating of fencing
          by galvanizing is merely a finishing operation performed on a
          fabricated article.  The change, i.e., adding a corrosion-
          resistant feature to the fencing, does not constitute a
          manufacture that results in a change in name, character, or use.
          Galvanizing may be necessary for the effective, long-term use of
          the fencing, but it does not change the fact that the uncoated
          article has but one use, i.e., fencing.

          HOLDING:

               In view of the foregoing, the processing of the wire rod in
          the Bahamas into chain link fencing for export to the United
          States constitutes a substantial transformation of the wire rod
          into a product of the Bahamas.  Because the fencing is a product
          of the Bahamas, it would not be subject to the export licensing
          requirements for certain steel products of Trinidad and Tobago
          imported into the United States.  The additional galvanizing
          process does not result in a second substantial transformation.

                                          Sincerely,




                                          John Durant, Director
                                          Commercial Rulings Division













          KKeefe:tj:typed 07/22/88