RE: U.S.-Caribbean Basin Trade Partnership Act; Yarn Wholly Formed in the United States

NY L87593 October 25, 2005 CLA-2:RR:NC:N3:351 L87593 CATEGORY: Classification Chandri Navarro-Bowman Hogan & Hartson L.L.P. Columbia Square 555 Thirteenth Street, NW Washington, DC 20004-1109 RE: RE: U.S.-Caribbean Basin Trade Partnership Act; Yarn Wholly Formed in the United States Dear Ms. Navarro-Bowman: In your letter dated Oct. 7, 2005, on behalf of your client, INVISTA S.a r.l. (hereinafter Invista), you requested a tariff classification ruling. You state that Invista manufactures Lycra® fibers and yarns at a facility in Waynesboro, Virginia. Lycra® are spandex fibers produced by a solution dry spinning process. An isocyanate terminated prepolymer is formed by the reaction of a polyether glycol with MDI. This prepolymer is put into a solution with DMAc and then reacted with a diamine at near stoichiometry and a small amount of monofunctional amine to control final polymer molecular weight. Additives are then mixed in to provide certain desirable properties to the final product. The fibers are formed in the spinning process where the solution is extruded into filaments in an inert gas and the DMAc solvent is removed. A finish is applied to the fibers to aid in the downstream processing. In Invista’s Waynesboro facility, the yarn is wound onto cardboard tubes. The tubes are packed into cardboard cartons with 30 to 100 tubes per carton. The cartons are then packed onto pallets and shipped to Mexico where the tubes are removed from the cartons and loaded onto a creel (or frame). There are about 1400 to 1600 tubes set onto each creel. The ends are then wound onto a large metal beam; this process is known as “beaming.” The yarns on the beams are then sold to fabric mills in the U.S. or in a CBTPA beneficiary country. It is made into fabric that will be used to manufacture garments in a CBTPA beneficiary country; the garments will be shipped to the U.S. Your letter asks that we determine whether or not the yarn that is manufactured in the United States and repackaged in Mexico will be considered “wholly formed” in the U.S. under CBTPA? For purposes of the CBTPA, section 10.222 of the Customs Regulations defines “wholly formed” as follows: “Wholly formed,” when used with reference to yarns, means that all of the production processes, starting with the extrusion of filament, strip, film, or sheet and including slitting a film or sheet into strip or the spinning of all fibers into yarn or both and ending with a yarn or plied yarn, took place in a single country. . . . As applied to the facts of this case, the subject Lycra® yarns are manufactured in the United States with all of the production processes, starting with the extrusion of the filaments and ending with a yarn, taking place at Invista’s Waynesboro facility. The beaming of the yarns in Mexico is to convert the packaging of the yarn from single end to multiple ends. In essence the action that occurs to the subject yarns in Mexico is a repackaging process. Since there are no production processes affecting the yarn formation which occur in Mexico nor is there any sort of chemical property change to the yarn which occurs as a result of the repackaging, Customs believes that the subject Lycra® yarns would be considered “wholly formed” in the United States for purposes of CBTPA pursuant to 19 C.F.R. 10.222. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mitchel Bayer at 646-733-3102. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division