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HQ 950653


December 4, 1991

CLA-2 CO:R:C:T 950653 CRS

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.3030

Ms. Maureen Shoule
J.W. Hampton, Jr. & Co., Inc.
15 Park Row
New York, NY 10038

RE: Insulated picnic and lunch bags; travel, sports and similar bags; country of origin; 19 CFR 12.130; marking; 19 U.S.C. 1304.

Dear Ms. Shoule:

This is in reply to your letter of October 9, 1991, to our New York office, on behalf of Access Bag N' Pack, concerning the tariff classification and country of origin of three insulated picnic and lunch bags. A sample of the merchandise was provided and is described below.

FACTS:

The merchandise in question is described as insulated picnic and lunch bags with an outer surface of nylon, styles 45041, 45071 and 45031. All of the materials used in the construction of the bags, including the nylon outer shell, the insulating material, zippers, webbing, trim, thread and hang tags are wholly of Taiwanese origin and manufacture. In Taiwan, the materials are die-cut into the required shapes for final assembly. The cut parts are then sent to Indonesia where they are assembled into finished bags, packed into cartons (also of Taiwanese origin) and shipped to the United States. In addition to a description of the assembly process you have provided cost breakdowns per dozen units, which is summarized below in percentage terms: style 45051: Taiwan 78%, Indonesia 22%; style 45071: Taiwan 76.1%, Indonesia 23.9%; style 45031: Taiwan 75.2%, Indonesia 24.8%.

ISSUE:

The issues presented are: (1) whether insulated picnic bags are classifiable as travel, sports and similar bags; and (2) whether the assembly operations in Indonesia are sufficient to constitute a substantial transformation under 19 CFR 12.130.

LAW AND ANALYSIS:

Classification

Heading 4202, HTSUSA, provides for, inter alia, traveling bags, knapsacks, backpacks and similar articles. There is no specific provision for picnic bags or lunch bags in heading 4202; however, Additional U.S. Note 1, Chapter 42, HTSUSA, defines the subheading provision for "travel, sports and similar bags" as covering "goods...of a kind designed for carrying clothing and other personal effects during travel, including backpacks and shopping bags of this heading...." The bags in question are similar to travel bags and are used to carry and preserve food during travel. Accordingly, they are classifiable under the provision for travel, sports and similar bags.

Country of Origin

The country of origin regulations for textiles and textile products are contained in section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile or textile product which consists of materials produced or derived from, or processed in, more than one foreign country, is considered to be a product of that foreign country where it last underwent a substantial transformation. A textile or textile product will be considered to have undergone a substantial transformation if it has been transformed by means of a substantial manufacturing process into a new and different article of commerce. Pursuant to 19 CFR 12.130(d)(2), the following factors are evaluated in determining whether merchandise has been subjected to a substantial manufacturing or processing operation: the physical change in the article; the time involved in the manufacturing operation; the complexity of the operations, the level or degree of skill and/or technology required; and the value added to the article.

Although the bags are assembled and packed in Indonesia, the nylon material and other components are designed, manufactured and cut in Taiwan. In addition, over 70 percent of the cost of the bags at issue results from operations performed in Taiwan. In contrast, the operations performed in Indonesia constitute little more than a simple assembly process. It is therefore Customs' view that the operations performed in Indonesia do not result in a substantial transformation, and that, consequently, Taiwan remains the country of origin of the picnic/lunch bags.

Marking

Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that articles of foreign origin imported into the United States must be legibly, conspicuously and permanently marked to indicate the country of origin to the ultimate purchaser in the U.S. In accordance with 19 U.S.C. 1304 and section 134, Customs Regulations (19 CFR 134), the bags in question should be marked to indicate their Taiwanese origin.

HOLDING:

The picnic bags in question are classifiable in subheading 4202.92.3030, HTSUSA, under the provision for trunks, suitcases, vanity cases...traveling bags...and similar containers; other; with outer surface of plastic sheeting or of textile material; travel, sports and similar bags; with outer surface of textile materials; other; other; of man-made fibers; other. They are dutiable at the rate of 20 percent ad valorem. The applicable textile category is 670.

Pursuant to 19 CFR 12.130, the country of origin of the bags is Taiwan.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota 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 that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection 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 importation of this merchandise to determine the current status of any import restraints or requirements.

The holding in this ruling 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. In such a case, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,


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