United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1990 HQ Rulings > HQ 0082527 - HQ 0082703 > HQ 0082527

Previous Ruling Next Ruling

HQ 082527

March 9, 1989

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


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.


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.


The issue presented is whether the processing in the Dominican Republic is sufficient to convert the fabrics into products of that country.


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
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.


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.


John Durant, Director

Previous Ruling Next Ruling