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HQ 088455


March 8, 1991

CLA-2 CO:R:C:T 088455 KWM

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.3020

Mr. Robert C. Shoule
J.W. Hampton, Jr. & Co.
15 Park Row
New York, New York 10038

RE: Nylon backpacks; Acme Brief Case Co., Inc.; classification; textile; plastic sheeting; travel, sports and similar bags; outer surface; country of origin; 19 C.F.R. 12.130.

Dear Mr. Shoule:

This is in reference to your letters dated September 10, 1990, November 13, 1990. December 28, 1991 and January 15, 1991, all regarding a binding ruling for nylon backpacks imported by your client Acme Brief Case Co., Inc. The correspondence dated September 10 and November 13, 1990 are directed to our New York office. The later correspondence was sent to this office, where the matter has been consolidated for a reply.

FACTS:

The article at issue is described as a "nylon backpack." The manufacturing and cost breakdowns are provided in your letter as follows:

-All nylon material, binding, zippers, webbing trim, thread and hang tag are purchased in Taiwan and are wholly of Taiwanese origin and manufacture

-The export cartons are printed and made in Taiwan

-In Taiwan the nylon material is die-cut to proper shapes for stitching into knapsacks/backpacks

-All the cut material along with the shipping cartons, zippers, webbing and other trim parts are shipped to Indonesia

-The cut material, zippers, etc., are assembled into knapsacks/backpacks in Indonesia

-The assembly process, performed in Indonesia, consists of simple sewing of two or more pieces together, by unskilled labor

-The assembled knapsacks/backpacks are packed into the cartons provided, then shipped to the United States

The cost breakdown per dozen is as follows:

Indonesia
Labor $3.36
Polybag .264
Carton .144
Inland trucking .468
Bank charges .24 $4.476

Taiwan
Nylon with PVC Backing $7.44
PVC Sheeting for pocket Backing .228
Cost of Designs & Dies .084
Cost of Cutting .236
Cost of Zippers 1.68
Cost of P.P.Webbing .864
Foam padding for backstraps .444
Plastic Buckles .45
Thread .216
Hangtag .212 $11.854

The grand total of the cost per dozen is $16.33

The percentage breakdown is as follows:

Taiwan Indonesia
72.6% 27.6%

Your initial letters, sent to New York, contained only the narrative facts above. 19 C.F.R. 12.130 describes the criteria for determining the country of origin for textile products. The narrative description of the goods was insufficient to make a country of origin determination as prescribed by the regulations. Therefore, your initial inquiry was returned to you with a request for additional cost and component breakdowns, and with instruction to forward your response to this office for a reply.

ISSUE:

Are the goods at tissue classified as backpacks of heading 4202, HTSUSA?

What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

HTSUSA Classification

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRI's). The systematic detail of the harmonized system is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff
schedule and any relevant Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI's may be applied, taken in order.

Heading 4202, HTSUSA, provides for:

Trunks, suitcases, vanity cases, attache cases. briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; toiletry bags, knapsacks, purses, map cases, cigarette cases, tobacco pouches, toolbags, sports bags, bottle cases, jewelry boxes, powder case, cutlery cases and similar containers, of leather or of composition leather, of plastic sheeting, of textile materials, of vulcanized fiber or paperboard, or wholly or mainly covered with such materials.

A nylon backpack such as this is classified in heading 4202, HTSUSA. Within that heading, subheading 4202.92.3020, HTSUSA, provides for:

4202 Trunks, suitcases, . . .

Other:
4202.92 With outer surface of plastic sheeting or of textile materials:
Travel, sports and similar bags:
With outer surface of textile materials:
4202.92.30 Other:
Other:
Of man- made fibers:
4202.92.3020
Backpacks:

Additional U.S. Note 1 states that:

1. For the purposes of heading 4202, the expression "travel, sports and similar bags" means goods . . . of a kind designed for carrying clothing and other personal effects during travel. including backpacks . . .

Articles such as these, nylon backpacks, having an outer surface of textile material, specifically of man-made fibers, are classified in subheading 4202.92.3020, HTSUSA.

Country of Origin

Title 19 of the Code of Federal Regulations (C.F.R.), at 12.130, provides for the country of origin marking of textiles and textile products. In general, 12.130 states that a textile product subject to the regulations shall be the
product of the country where the whole of its growth, production, or manufacture occurs. If the product is made of materials produced or derived from, or processed in, more than one foreign country, then the country of origin shall be that in which the product last underwent a substantial transformation. Lastly, in subsection 12.130(d), the criteria for determining country of origin are described. They include the physical change in the material or article, the time involved in the manufacturing or processing operations, the complexity of the operations, the level or degree of skill and/or technology required, and the value added to the article. These criteria are not exhaustive; one or any combination of these criteria, as well as additional factors, may be considered.

Although the article is assembled and packed in Indonesia, the nylon material and other components are "wholly of Taiwanese origin and manufacture." In addition, the design and cutting operations are performed in Taiwan. The raw material manufacture, design and cutting operations are deemed to be the factors which contribute most to the creation of the final product. We also note that over two-thirds of the total value of the goods (72.6 percent) is contributed in Taiwan. The value added in Indonesia is slightly above one-quarter (27.4 percent).
The Indonesian manufacturing processes do not indicate that assembly consists of more than simple fabrication from piece goods of Taiwan origin. Such operations do not constitute a substantial manufacturing or processing operation as described in 19 C.F.R. 12.130, resulting in a new and different article. The country of origin for this article is Taiwan.

Marking Requirements

Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), provides that articles of foreign origin imported into the U.S. must be legibly, conspicuously and permanently marked to indicate the country of origin to the ultimate purchaser in the U.S. As noted above, the country of origin for the merchandise at issue here is Taiwan. The goods should be marked in accordance with 19 U.S.C. 1304 and the implementing regulations found in Title 19 C.F.R. Part 134.

HOLDING:

The merchandise at issue, backpacks made of PVC backed nylon textile material, are classified in subheading 4202.92.3020, HTSUSA. The applicable rate of duty is 20 percent ad valorem. Further, the country of origin for these goods is Taiwan. As a product of Taiwan, these goods will be subject to a textile quota, and a visa for category 670 must accompany the goods.

The designated textile and apparel category may be subdivided into parts. If so, the visa and quota category requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to
the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to the importation of this merchandise to determine the current status of any import restraints or requirements.

The holding in ruling letter is binding only as it applies to the particular transaction or issue described in your request (19 C.F.R. 177.9(a)). Each ruling is issued on the assumption that all of the information you provided is accurate and complete in every material respect (19 C.F.R. 177.9(b)(1)). In the event that information provided should differ from the actual occurrence or does not comply with 19 C.F.R. 177.9, this ruling will be subject to modification or revocation and may no longer be relied upon. In particular, the country of origin determination may be affected. In such a case, we recommend that a new request for binding ruling be submitted in accordance with 19 C.F.R. 177.2.

Sincerely,

John A. Durant
Director
Commercial Rulings Division

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