HQ 0087346 - Country of origin of bedding; Canadian fabric and Chinese embroidered fabric transformed into bedding in Canada; country of origin for quota purposes is Canada - United States International Trade Commision Rulings

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HQ 087346

October 22, 1990

CLA-2 CO:R:C:G 087346 CC

CATEGORY: CLASSIFICATION

Mr. Gary C. Cooper
Law Offices of George R. Tuttle
Three Embarcadero Center, Suite 1160
San Francisco, CA 94111

RE: Country of origin of bedding; Canadian fabric and Chinese embroidered fabric transformed into bedding in Canada; country of origin for quota purposes is Canada

Dear Mr. Cooper:

This letter is in response to your inquiry of May 31, 1990, on behalf of H.K. Enterprises, requesting country of origin determinations for quota purposes for bedding. You have indicated that at this time you are not interested in any determinations concerning the application of the Canada Free Trade Agreement to these goods. Samples were submitted for all of the articles, except the pillow.

FACTS:

You have requested country of origin determinations for the following articles: a pillow case, a pillow sham, a dust ruffle, a "bed sheet," a duvet cover, and a toss pillow.

According to your submissions, the submitted merchandise is composed of Canadian fabric, which makes up the major part of each article, and Chinese embroidered fabric, which basically serves as decorative trimming. The embroidered fabric is produced in China and shipped to Canada. In Canada, cutting, sewing, and assembling operations are performed to produce the finished articles. You state that the following operations are performed in Canada, after the embroidered fabric has arrived:

1. The imported product will be unfolded and inspected for defects.

2. All defects will be repaired, including some simple embroidery work.

3. The piece good or goods of Canadian origin will be cut and trimmed for sewing.

4. The piece good or goods will be sewn to the embroidered part.

5. The product will be pressed.

6. The product will be cleaned.

7. The product will be folded and packaged for sale.

8. The product will be shipped to the United States.

The pillow case measures approximately 21 inches by 30 inches. There is a 5 inch piece of embroidery attached to one side; the remainder of the fabric is Canadian.

The pillow sham measures approximately 21 inches by 27 inches. There is a 1 inch piece of embroidery attached to each side. The front cover is made of the embroidered fabric; the back cover is made of Canadian fabric.

The dust ruffle measures approximately 72 inches by 84 inches. There is a 14 inch piece of embroidered fabric attached to 3 sides; the remainder of the fabric is Canadian.

The article that you have designated as a "bed sheet" measures approximately 102 inches by 108 inches. There is a 40 inch piece of embroidered fabric attached to one side; the remainder of the fabric is Canadian. Due to the embroidered fabric, this article would most likely be used as some type of bed cover and not as a sheet.

The duvet cover measures approximately 88 inches by 88 inches. The front cover is made of embroidered fabric; the back cover is made of Canadian fabric.

You indicate that there is great deal of physical change in the merchandise as a result of the manufacturing and processing operations performed in Canada. Also, you have provided information showing that the primary value to the submitted merchandise is added in Canada.

ISSUE:

What is the country of origin for quota purposes for the merchandise at issue?

LAW AND ANALYSIS:

For quota purposes, Section 12.130 of the Customs Regulations (19 CFR 12.130) is applicable to the merchandise at issue. Section 12.130(b) of the Customs Regulations provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d) of the Customs Regulations sets forth criteria in determining whether a substantial transformation of a textile product has taken place. This regulation states that these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1) states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity,
(ii) Fundamental character or
(iii) Commercial use.

12.130(d)(2) states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article as a result of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(v) The value added to the article or material in each foreign territory or country, or insular possession of the U.S., compared to its value when imported into the U.S.

The physical change and the value added in Canada to the merchandise at issue are substantial. In addition, except for what is done to create the embroidered fabric, all processing operations, e.g., cutting and sewing, are done in Canada, and these operations are substantial. We believe that embroidered fabric from China and fabric from Canada are transformed in Canada into bedding, based on your submissions. Therefore the last substantial transformation occurs in Canada, and the country of origin for quota purposes for the merchandise at issue is Canada.

HOLDING:

The country of origin for quota purposes for the merchandise at issue is Canada.

The holding set forth above 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 CFR 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 subsequently be determined that the information furnished is not complete and does not comply with 19 CFR 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. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director

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