HQ 560429

April 30, 1997

CLA-2: RR:TC:SM 560429 BLS

CATEGORY: Classification

Port Director

U.S. Customs Service

Charlotte Amalie

St. Thomas, Virgin Islands 00801

RE: Applicability of General Note 3(a)(iv), HTSUS, to dolls

imported from the Virgin

Islands; substantial transformation

Dear Sir:

This is in reference to a letter from your office dated

April 15, 1997, forwarding letters from St. Croix Handicraft

Industries Inc., dated October 21, 1996 and March 21, 1997,

requesting a ruling concerning the applicability of General Note

3(a)(iv), Harmonized Tariff Schedule of the United States

(HTSUS), to certain dolls that may be imported into the U.S. from

the Virgin Islands.

FACTS:

Raw wicker reeds (strands) from China or Malaysia are

imported into the U.S. and then exported to St. Croix, Virgin

Islands, where they undergo dyeing operations. The strands are

then shipped to Trinidad where they are weaved or plaited into

three different styles of dolls. The dolls are returned to St.

Croix where finishing operations are performed, as follows:

Market Lady Doll - A hook ring used to hang the doll is pierced

through the head basket and verti-vert (potpourri) or bay leaves

are put into the basket. A scarf is glued to the head and a tag

is hung around the doll\'s neck.

Dancing Lady (Quadrille Dancer) - The finishing operations

performed on this doll also involve the attachment of a head

scarf, hook ring, and tag.

Mockie-Jumbie Doll - This doll is completely woven or plaited in

Trinidad with the exception of the long stilt legs. In St.

Croix, the unwoven reeds or strands at the legs are twisted

around the stilts. A hat is woven to the head. The mask, which

is a stripe of

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fabric, is attached to the face. Thin reed strips which are

woven together in St. Croix to form a whip are attached to the

right hand. A stand for this doll is produced in St.

Croix by gluing a piece of upholstery fabric to a round piece of

wood. The doll is

then attached to the stand.

ISSUE:

Whether the dolls will be considered a product or

manufacture of the Virgin Islands, for purposes of determining

whether they will be eligible for duty-free treatment under

General Note 3(a)(iv), HTSUS, upon importation into the U.S.

LAW AND ANALYSIS:

Under General Note 3(a)(iv), HTSUS, goods imported from an

insular possession (including the Virgin Islands) may enter the

customs territory of the U.S. free of duty if they:

l\. Are manufactured or produced in the possession;

2\. Do not contain foreign materials which represent more

than 70% of the goods\' total value (or more than

50%with respect to articles ineligible for the Caribbean

Basin Economic Recovery Act (CBERA) treatment); and

3\. Are imported directly to the customs territory of the

U.S. from the possession.

Materials imported into an insular possession, as in this case,

become a product or manufacture of that possession only

if they are substantially transformed there into a new

and different article of commerce. A substantial transformation

occurs when an article emerges from a process with a

new name, character, or use different from that

possessed by the article prior to processing. See Texas

Instruments v. United States, 69 CCPA 152, 681 F.2d 778 (1982).

Customs has ruled that the shell of a doll imparts its

essential character and that stuffing a doll does not effect a

substantial transformation. See Headquarters Ruling Letter (HRL)

733838 dated February 7, 1991 and HRL 734149 dated November 25,

1991\. (See also HRL 735242 dated July 6, 1994, where we held

that the shell of a teddy bear imparts its essential character

and sewing a musical button into the teddy bear does not effect a

substantial transformation.)

In the instant case, the wicker dolls are essentially

complete as a result of the operations performed in Trinidad.

These articles are recognizable as dolls when imported into the

Virgin Islands and only finishing operations are required to be

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performed in St. Croix before exportation of the dolls to the

U.S. As in HRLs 734149,

733838 and 735242, the articles imported into St. Croix from

Trinidad impart the essential character to the completed dolls

and the finishing operations performed in the insular possession

do not effect a change in the character or use of the articles.

Therefore, we find that the operations performed in the Virgin

islands do not result in a substantial transformation, and when

imported into the U.S., the dolls will be considered a product of

Trinidad and not the insular possession.

HOLDING:

Wicker dolls produced in Trinidad and imported into the

Virgin islands do not undergo a substantial transformation as a

result of the finishing operations performed in the insular

possession. Accordingly, the dolls are not considered a product

of the Virgin islands and will not qualify for duty-free

treatment under General Note 3(a)(iv), HTSUS.

Please provide a copy of this decision to St. Croix

Handicraft Industries Inc., P.O. Box 25402, Gallows Bay, St.

Croix, V.I. 00824.

Sincerely,

John

Durant, Director

Tariff

Classification Appeals Division