HQ 555014: Application of Subheading 9802.00.80, HTSUS, to binding fabric of foreign origin cut to width in the U.S.

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 555014

                          June 13, 1989

CLA-2-CO:R:C:V  555014 RA

CATEGORY: Classification

TARIFF NO.: 9802.00.80, HTSUS

Leslie Alan Glick, Esq.
Duncan, Allen and Mitchell
1575 Eye Street, N.W.
Washington, D.C. 20005

RE: Application of Subheading 9802.00.80, HTSUS, to binding
    fabric of foreign origin cut to width in the U.S.

Dear Mr. Glick:

     This is in response to your letter of May 5, 1988, on behalf
of Service Manufacturing Corporation, requesting reconsideration
of our ruling of March 7, 1988 (554878), which held that binding
fabric cut to width from material of foreign origin was not
transformed into a product of the U.S. and so was not eligible
for tariff treatment under subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS)(formerly item
807.00, Tariff Schedules of the United States (TSUS)).  We regret
the delay in responding to your letter.

FACTS:

     Fabric used as binding material for camera and cassette bags
in Mexico is cut to width in the U.S. from foreign-made fabric.
The fabric is imported in bulk rolls having a width of 60
inches.  It is die cut to width in the U.S. into 30 pieces each
having a width of two inches.  In Mexico, the binding material is
sewn to various other components in the assembly process.

ISSUE:

     Does the die cutting to width of foreign-made fabric in the
U.S. to form strips of binding material constitute a substantial
transformation of the fabric into a U.S.-fabricated component
which is eligible for tariff allowance under subheading
9802.00.80, HTSUS?



LAW AND ANALYSIS:

     Subheading 9802.00.80, HTSUS, applies to fabricated
components of U.S. origin assembled abroad.  Section 10.14(b),
Customs Regulations (19 CFR 10.14(b)), states that foreign-made
articles or materials may become products of the U.S. if they
undergo a process of manufacture in the U.S. which results in
their substantial transformation into a new and different article
having a distinctive name, character, or use different from that
originally possessed.  However, the mere finishing or
modification of a partially or nearly complete foreign product in
the U.S. will not result in a substantial transformation.
Cutting of textile material to length or width is not usually
considered sufficient to change the country of origin.  See
section 12.130(e)(2)(ii), Customs Regulations (19 CFR
12.130(e)(2)(ii)).

     The cutting of the foreign fabric to width is not a
processing which substantially increases the value of the
imported product or involves a considerable investment in plant
facilities and production costs.  National Juice Products
Association et al. v. U.S., 10 CIT 48, 628 F. Supp. 990 (1986).
The fact that the cutting is a minor finishing step which may be
accomplished easily anywhere with a minimum of effort and
investment may be considered in determining whether there is a
substantial transformation.  Ferrostaal Metals Corporation v.
U.S., 11 CIT     , 614 F. Supp. 535 (1987).  A substantial
transformation results only if the article processed has a new
name, character, or use, and if the processing is a minor one
which leaves the identity intact, a substantial transformation
has not occurred.  The relative costs, manufacturing time, and
complexity of operations are important considerations.  Uniroyal,
Inc. v. U.S., 3 CIT 220, 542 F. Supp. 1026 (1982).


HOLDING:

     In view of the simple, inexpensive, and uncomplicated nature
of the operation of cutting fabric to width, we remain of the
opinion that this processing does not result in a substantial
transformation of the foreign-made fabric.  Accordingly, the cut
material cannot be considered to be a fabricated U.S. component
which is eligible for tariff treatment under subheading
9802.00.80, HTSUS.

                               Sincerely,




                               Harvey B. Fox
                               Director, Office of
                               Regulations and Rulings