HQ 086826: Single loop bale ties; substantial transformation; cutting to length and looping ends of galvanized wire

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 086826

                                      July 16, 1990

             CLA-2 CO:R:CV:G  086826 JLV

             CATEGORY:  Classification

             TARIFF NO.:  7326.20.00

             Richard M. Belanger, Esq.
             Powell, Goldstein, Frazer & Murphy
             1001 Pennsylvania Avenue, N.W.
             Washington, D.C. 20004

             RE:  Single loop bale ties; substantial transformation;
                  cutting to length and looping ends of galvanized wire

             Dear Mr. Belanger:

                  In a letter of March 16, 1990, on behalf of your client,
             Florida Wire Products Corporation, you request a ruling on the
             country of origin of single loop bale ties that are made from
             galvanized steel wire.  A sample of the bale tie (looped end
             only) has been submitted.  This is our decision on the origin
             issue.

             FACTS:

                  Your client proposes to obtain galvanized steel wire from
             a manufacturer in a country whose steel wire is subject to a
             Voluntary Restraint Arrangement (VRA).  The galvanized wire
             will be shipped to Costa Rica (or possibly Aruba, Honduras or
             other country) for processing into single loop bale ties.  The
             processing, to be performed on a "bale tie" machine, will
             consist of the following:

                  1.    Straighten the wire and cut to specified lengths
                        ranging from 6 to 21 feet.

                  2.    Bend one end of each length to form a loop
                        (approximately 3.5 inches from the end).

                  3.    Twist the looped end (approximately two complete
                        turns) to form a closed loop measuring
                        approximately 0.5 inch in diameter.

                  4.    Package the completed bale ties in bundles of 150
                        to 250 ties.











                                          - 2 -

                  You conclude that the processing results in a product of
             Costa Rica (or other country in which the single loop bale
             ties are formed from the galvanized wire) because the
             processing results in an article which has a new name,
             character, and use.  You note that the name changes from
             "wire" to "bale ties."  This change in name is also reflected
             in a change in tariff classification from heading 7217 to
             heading 7326, Harmonized Tariff Schedule of the United States
             (HTSUSA).  Furthermore, you note that the use of a
             multipurpose galvanized wire is narrowed to a single use
             article, a bale tie.  Finally, you point out that the change
             in use and the 30 to 40 percent value added by the processing
             are evidence of a change that results in a product with a new
             character, i.e., a recognizable finished wire product.

             ISSUE:

                  Is the manufacture of single loop bale ties from
             galvanized wire a substantial transformation of the wire into
             a new and different article which, therefore, becomes a
             product of the country in which the manufacture takes place?

             LAW AND ANALYSIS:

                  The test for a substantial transformation is whether or
             not the processing changes a material or article into a
             different article which has a new name, character, or use.  In
             this case, the bale ties are different in name, character, and
             use from the galvanized wire.  The cutting and looping is a
             process that changes a multi-use material (galvanized wire in
             coil) into an identifiable article of commerce (single loop
             bale tie).

             HOLDING:

                  The processing of galvanized wire into single loop bale
             ties is a substantial transformation which results in new and
             different articles, i.e., single loop bale ties, which are
             products of the country (in this case, Costa Rica) in which
             the process takes place.  Bale ties of wire are classified in
             subheading 7326.20.00, HTSUSA.

                  The Office of Agreements Compliance, International Trade
             Administration, Department of Commerce, has the responsibility
             for interpreting the coverage of the VRA's.  In this case,
             galvanized wire from a VRA country would be substantially
             transformed in Costa Rica into single loop bale ties.  At the
             time of entry for consumption in the United States, the bale














                                          - 3 -

             ties would be products of Costa Rica.  Therefore, we suggest
             that you seek the advice of the Office of Agreements
             Compliance on the application of the VRA to VRA wire which is
             substantially transformed in a non-VRA country prior to entry
             into the United States.

                                          Sincerely,




                                          John Durant, Director
                                          Commercial Rulings Division





















































































             6cc:  AD NY Seaport
             2cc:  Chief, CIE
             1cc:  Dir, OTO
             1cc:  Frank Crowe, OTO
             1cc:  Reading File
             1cc:  AC, CO
             1cc:  Dir, ComRulDiv
             1cc:  Office, Agreements
                  Compliance, ITA, Commerce

             LIBRARY:   valentin
             FILE NAME: 086826