Hello,

In the primary rules, for HS Code 5402, it clearly indicates otherwise:

Printing or dyeing of yarn or monofilaments, unbleached or prebleached, accompanied by preparatory or finishing operations, twisting or texturizing not being considered as such, the value of nonoriginating material (including yarn), not exceeding 48% of the ex-works price of the product.

My concern is to that a partially oriented imported yarn can be used by further processing it (draw texturizing and twisting) to bring strength, durability and its use in fabrics. nowhere in article 34, texturizing and twisting are mentioned as minimal operations. they do infact change the product characteristics which cant be reversed giving it everlasting property. referring CS Steel case and explanatory notes of chapter 54, 5402 - we can say that texturizing is actually substantially transforming the product. In newer FTA like EU- CHILE, EU- JAPAN ( HS code 54.01 to 54.06 - twisting combined with any mechanical operations)- that means the concept of twisting and texturizing as being substantial transformation should not be contested. Referring to UCC Article 60, shouldn't the texturising and twisiting process be considered to fulfill the condition of "manufacturing of new product and a major manufacturing operation" and which actually supersedes article 32 UCC DA.

I am confused as to why texturizing and twisting has been specifically excluded when they fulfill the definition of substantial transformation apart from primary rules of origin. there are no case laws as to this regard and no guidance note why EU mentioned such a condition in PSR.