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HQ 088550

May 29, 1991

CLA-2 CO:R:C:T 088550 HP


TARIFF NO.: 5810.92.0080

Ms. Kaye Crabill
Eva Haynal Forsyth for Forsyth Enterprises Ltd.
P.O. Box 7139
Charlottesville, VA 22906

RE: Beaded dress fabric not readily identifiable as dress part is embroidered fabric. Country of origin; 9802.00.80

Dear Ms. Crabill:

This is in reply to your letter of January 24, 1991, con- cerning the tariff classification of fabric, produced in Japan, China, and the United States, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


The merchandise at issue consists of 65% filament rayon / 35% silk satin woven fabric, intended to be used in the manu- facture of apparel. It is unbleached or bleached, and not yarn dyed. The fabric is created in Japan, and imported into the United States in 48" wide rolls. The fabric at this point is not yet the subject of your ruling request.

Upon entry into the U.S., the fabric is cut into panels and pieces. The samples submitted with your request are a straight 4" wide strip and a scalloped 3" strip. Although you mention that the cut pieces may eventually be either a skirt panel, a large piece of fabric for a neckline binding, a bodice piece, a sleeve binding, or a sleeve, we can only rule upon those samples presented.

After the fabric is cut, the pieces are exported to China. They are then rectangularly beaded on a visible tex- tile ground, in a decorative pattern along the center of the fabric, with imitation pearls and plastic tubes. The beaded fabric is then re-imported into the U.S., where it is cut (if required) and assembled into a dress.

Whether the beaded fabric is considered U.S. merchandise exported and returned?


Potential Duty Exemption

Heading 9802.00.80, HTSUSA, provides a partial duty exemption for:

Articles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were ex- ported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such arti- cles by change in form, shape or other- wise, and (c) have not been advanced in value or improved in condition abroad ex- cept by being assembled and except by op- erations incidental to the assembly pro- cess such as cleaning, lubricating and painting. [Merchandise covered by this subheading was previously covered by item 807.00, Tariff Schedules of the United
States (TSUS).]

All three requirements of HTSUSA heading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under HTSUSA heading 9802.00.80 is subject to a duty upon the full value of the imported article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentary re- quirements of section 10.24, Customs Regulations (19 CFR 10.24).

A [product of the U.S.] is an article manufactured within the Customs territory of the U.S. and may consist wholly of U.S. components or materials, of U.S. and for- eign components or materials, or wholly of foreign components or materials. If the article consists wholly or partially of foreign components or materials, the manu- facturing process [in the U.S.] must be such that the foreign components or mate- rials have been substantially transformed into a new and different article, or have been merged into a new and different arti- cle. Section 10.12(e), Customs Regula- tions.

As we stated above, after the fabric is imported into the U.S. from Japan, it is cut into pieces to be used in the manufacture of apparel. In a telephone conversation with Howard Plofker of my staff, you stated that, in most cases, the pieces cut in the U.S. prior to being sent to China are not recognizable as garment parts. You described them as being roughly cut to approximate shape; e.g., large trapezoid- al pieces for skirt panels. This mere cutting of fabric into pieces not identifiable as garment parts is not considered a substantial transformation. See section 10.14(a)(example 1), Customs Regulations. Therefore, the processes taking place in the U.S. do not transform the Japanese fabric into a "product of the U.S.," and heading 9802.00.80, HTSUSA, is inapplicable.

Country of Origin of Beaded Fabric

Textile commodities produced in more than one foreign
country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that:

... a textile product ... which consists of materials produced or derived from, or processed in, more than one foreign ... country shall be a product of that foreign ... country where it last underwent a substan- tial transformation.

12.130(b). A textile product undergoes a substantial trans- formation when it is "... transformed by means of substantial manufacturing or processing operations into a new and differ- ent article of commerce."

Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regula- tions is considered in determining whether a textile product has undergone substantial manufacturing or processing opera- tions, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determina- tive, and additional factors may be considered."

In determining whether merchandise has undergone substan- tial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country.

While much of the information described in the preceding paragraph was not submitted, it is clear that the beading operation in China has not substantially transformed the Japanese fabric. See HRL 088442 PR of April 25, 1991 (ruling that attachment of sequins to lace-like fabric is not a sub- stantial transformation). Therefore, the beaded fabric is considered a product of Japan for tariff, quota, and visa purposes.


Heading 6217, HTSUSA, provides for, inter alia, parts of garments. In order for the beaded fabric to be considered parts of garments, they must be readily identifiable as such parts at the time of importation. See United States v. Buss & Co., 5 Ct. Cust. Appls. 110, 113 T.D. 34138 (1914) (stating that character or identity of article must be fixed with certainty before product may be classified as article rather than fabric). As we stated above, this identity was not fixed prior to beading. It is our opinion, based upon your descrip- tion of the processes taking place once the beaded fabric arrives, that the beaded fabric at issue is still not recog- nizable as a garment part. Therefore, classification in heading 6217, HTSUSA, would be incorrect.

Heading 5810, HTSUSA, provides for embroidery in the
piece, in strips or in motifs. The General Rules of Interpre- tation (GRIs) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part, that:

... classification shall be determined according to the terms of the headings and any relative section or chapter notes ...

Goods which cannot be classified in accordance with GRI 1 are to be classified in accordance with subsequent GRIs, taken in order.

Note 6 to Chapter 58, HTSUSA, defines embroidery to mean, inter alia, "sewn applique work of sequins, beads or ornamen- tal motifs of textiles or other materials." Therefore, as the instant samples meet this description, they are classified in heading 5810, HTSUSA.


As a result of the foregoing, the instant merchandise is classified as under subheading 5810.92.0080, HTSUSA, textile category 229, as embroidery in the piece, in strips or in motifs, other embroidery, of man-made fibers, other, other. The country of origin is Japan.

Additional U.S. Note 1 to Chapter 58, HTSUSA, states that the applicable rate of duty is not less that the rate of duty which would have applied had the fabric not been embroidered. Therefore, the applicable rate of duty, as necessitated by subheading 5408.31.2050, HTSUSA, is 17 percent ad valorem.The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent negotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at your local Customs office.

Due to the changeable nature of the statistical annota- tion (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

The holding in this ruling 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 C.F.R. 177.9(b)(1)). This section states that a ruling letter is issued on the assumption that all of 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 subsequent- ly be determined that the information furnished is not com- plete and does not comply with 19 C.F.R. 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. In such a case, it is recommended that a new ruling request be submitted in accordance with section 177.2, CUSTOMS REGULATIONS (19 C.F.R. 177.2).


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