HQ 0952011 - Country of origin of diapers. - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1993 HQ Rulings > HQ 0951986 - HQ 0952077 > HQ 0952011

HQ 952011

January 19, 1993

CLA-2 CO:R:C:T 952011 HP

CATEGORY: CLASSIFICATION

Mr. John M. Peterson
Neville, Peterson & Williams
39 Broadway
New York, NY 10006

RE: Country of origin of diapers.

Dear Mr. Peterson:

This is in reply to your letters of June 11, 1992, and December 17, 1992. Those letters concerned the country of origin determination of diapers, produced in either China or Guatemala. Please reference your file 1606-01-A, Pro Diaper, Inc.

FACTS:

The merchandise at issue consists of infant's 100% cotton diapers used by diaper services and suitable for washing and repeated use. The diapers will be manufactured in Guatemala by Textiles Tropicales, S.A., for and on behalf of Pro Diaper, Inc. The merchandise will be produced from cotton fabric which is woven in the People~s Republic of China.

Accompanying your second submission was a sample of the Chinese fabric as it will be imported into Guatemala, cut to a convenient length. It is of a twill weave, approximately 35 inches to 40 inches in width, and contains no folding lines or other lines of demarcation. The materials and production steps involved in the manufacture of these diapers is described in your submission as follows:

A. China Production Steps

1. In the PRC, 100% cotton cloth will be woven. A sample of this cloth, as woven in China, is enclosed [with your second letter] for Customs' reference. The cloth will have no lines of demarcation or cutting lines

2. The PRC-origin woven cloth will be shipped to Guatemala in large rolls
[approximately 40' bolts or "festoons"], each of which will contain enough material to manufacture several dozen diapers.

B. Guatemala Production Steps

1. Two layers of the PRC-origin cotton fabric are placed (spread) onto a cutting table, examined, and stacked approximately 200 layers deep.

2. The fabric is cut [length and width] to size (24 inches wide by 16 inches long).

3. The sides of the two layers of fabric are folded over (4 inches on the left and 8 inches on the right).

4. Center panels for the diapers are formed by using a straight sewing machine.

5. The fabric, sewn as described above, will be taken to a serging machine, where the top and bottom edges will be trimmed and overedged.

6. Threads from all edges of the diaper will be trimmed, and a short trailer thread will remain.

7. Where additional thickness is required (i.e., for making 4 x 8 or 4 x 10 ply diapers), additional pieces of cut material will be inserted into the center section of the diaper and sewed in.

8. The completed merchandise will be inspected, packaged into cartons and shipped from Guatemala to the United States.

ISSUE:

Whether the manufacturing operations taking place in Guatemala on the Chinese fabric substantially transform that fabric into Guatemalan diapers?

LAW AND ANALYSIS:

Textile commodities produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that:

. . . a textile product . . . which consists of materials produced or derived from, or processed in, more than one foreign . . . country shall be a product of that foreign . . . country where it last underwent a substantial transformation.

12.130(b). A textile product undergoes a substantial transformation when it is ". . . transformed by means of substantial manufacturing or processing operations into a new and different article of commerce." Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regulations is considered in determining whether a textile product has undergone substantial manufacturing or processing operations, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determinative, and additional factors may be considered." In determining whether merchandise has undergone substantial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country.

Customs has long held that producing diapers from plain cotton fabric suitable for multiple uses is considered a substantial transformation when the manufacturing and processing operations include, inter alia, cutting to length and width, complex folding to create the diaper~s unique multi-layer middle portion, hemming and/or overlocking the edges, and finishing and packaging. HRL 086665 of March 23, 1990; HRL 086779 of April 25, 1990; HRL 087585 of August 13, 1990; HRL 088395 of April 1, 1991 (rev~d on other grounds); HRL 950849 of March 24, 1992. This is true even where the fabric is cut only to length. HRL 087138 of June 5, 1990; HRL 087949 of January 8, 1991. Contra HRL 088321 of March 7, 1991 (mere cutting of fabric into squares and hemming insufficient to constitute substantial manufacturing process). Since your manufacturing process conforms to the above listing, and since the cloth as it is imported into Guatemala contains no folding lines or lines of demarcation formed by any means (e.g., by a change in the weaving process or by imprinting), it is our opinion that the Textiles Tropicales manufacturing operations performed in Guatemala substantially transform the Chinese fabric into Guatemalan diapers.

HOLDING:

As a result of the foregoing, for purposes of quota, visa and marking, the diapers at issue are considered a product of Guatemala.

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 177.9(b)(1), Customs Regulations (19 C.F.R. 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 C.F.R. 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 177.2, Customs Regulations (19 C.F.R. 177.2).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling