HQ 0952012 - 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 0952012

HQ 952012

March 24, 1993

CLA-2 CO:R:C:T 952012 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 letter of June 11, 1992. That letter concerned the country of origin determination of diapers, produced in either China or Guatemala. Please reference your file 1606-01-B, 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.

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, two ply 100% cotton cloth will be woven in a width sufficient to manufacture a diaper (approximately 35 inches

2. The PRC-origin woven cotton cloth will be shipped to Guatemala in large rolls of approximately 50 yards in length, each of which will contain enough material to manufacture several dozen diapers.

Guatemala Production Steps

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

2. Using a straight knife cutting machine, the fabric is cut to lengths of approximately 22 inches.

3. The sides of the two layers of fabric are folded over (93/4 inches on the left and 93/4 inches on the right).

4. Center panels for the diapers are formed by using a single needle lockstitch straight sewing machine, which makes one pass along each of the two seams formed by the folding operations, and affixes the folded fabric to itself.

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 secured with a bar tack stitch to prevent unraveling, and trimmed clean.

7. Where additional thickness is required (i.e., for making 4 x 8 or 4 x 10 ply diapers), additional pieces of fabric 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 or length alone, complex folding to create the diaper's unique multi-layer middle portion, hemming and/or overlocking the edges, and finishing and packaging. HRL 950849 of March 24, 1992; HRL 953078 of January 25, 1993. Contra HRL 087950 of January 9, 1991; HRL 088321 of March 7, 1991 (merely cutting fabric into squares and hemming insufficient to constitute substantial manufacturing process).

The Chinese fabric has regular lines of either differing weave or high density which have no use other than as markers to be used in the cutting, folding and sewing of the diapers. It is our opinion that the weave structure of the fabric confirms the fact that the material is intended for use as diapers. The changing of the weaves is performed at additional cost and for the specific purpose of creating markers for folding. As a result, no substantial transformation takes place. The diapers are therefore considered a product of China.

HOLDING:

As a result of the foregoing, the instant merchandise is considered woven cotton diapers of China.

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
Commercial Rulings Division

Previous Ruling Next Ruling