HQ 0953397 - Country of origin of diapers. - United States International Trade Commision Rulings

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HQ 953397

June 3, 1993

CLA-2 CO:R:C:T 953397 HP

CATEGORY: CLASSIFICATION

Mr. Allan Gordon
President
Performance Trading Inc.
520 South Lafayette Park Place
Suite 200
Los Angeles, CA 90057

RE: Country of origin of diapers.

Dear Mr. Gordon:

This is in reply to your letter of February 4, 1993. That letter concerned the country of origin determination of diapers, produced in Namibia from Chinese fabric. Please note your reference AP11032.

FACTS:

The merchandise at issue consists of five types of infant's woven diapers from 36 inch wide twill or bird'seye 100% cotton fabric, described by you as follows. In your letter AP11474, dated April 28, 1993, you informed us that you will only be importing diapers constructed from gauze (twill) fabric, samples of which were included with your March 26, 1993, letter. Accordingly, this ruling only applies to diapers constructed of the twill fabric described below.

In your letter AP11291 of March 29, 1993, you attached a letter from your supplier outlining the steps in producing the diapers. They are:

Step 1:Container arrives with piece goods. Bales are unloaded and docked into
Bond Store for inspection by our
Customs officials.
Step 2:After inspection bales are opened, individually inspected and issued out to the cutting room.
Step 3:Material is laid out and measured on the cutting table.
Step 4:Material is cut into exact lengths for minimum loss of fabric.
Step 5:Set up the fabric for the cotton insert and cut same.
Step 6:Sew cotton insert to inside fold of diaper.

Step 7:Lay up and cut foam insert.
Step 8:Sew foam insert to centre panel.
Step 9:Fold centre panel in and stitch to specifications.
Step 10: Inspection takes place (Concentrate on material flaws).
Step 11: Ends of diapers are hemmed by overlocking.
Step 12: Corners of diapers are tacked to prevent unravelling.
Step 13: Thorough inspection takes place. Step 14: Diapers are sorted, counted and packed into polybags.
Step 15: Each polybag is labelled.
Step 16: Polybags are packed into cartons. Step 17: Cartons are marked, sealed and strapped.

Please note that (a) Steps 7 and 8 refer to 2/6/2 diapers with foam insert and (b) Steps 5 and 6 refer to 2/5/2 diapers. Both the cartons and the polybags are manufactured in Namibia.

In your letter of February 4, 1993, you described the folding and stitching processes corresponding to Step 9, supra, as:

1. 2/3/2 Layer Prefold.

This item will be folded and hemmed with white thread as per the enclosed diagram from a single layer of fabric so that when it is finished it will have a 2 layer outer panel and a 3 layer center panel. Please see exhibit A [reproduced in part below].

2. 2/5/2 Prefold.

This will be the same construction as the above item number 1, except that it will have a 12" wide panel of the same 36" fabric [(cut in either China or Namibia)] folded in half, inserted and sewn in. The result will be a diaper with a 2 layer outer panel and a 5 layer inner panel as illustrated in exhibit B [reproduced in part below].

3. 2/6/2 Prefold with Sponge.

The construction of this diaper will be the same [as] ref. item 2 except that it will have a 100% polyester fiber sponge insert [(imported into Namibia from either South Africa, Hong Kong or the USA)] cut to size in Namibia or the Far East) inside the center panel resulting in a diaper with 2 layer outer panels and a 6 layer center panel of both cotton and sponge. Fabrication of this diaper is illustrated in exhibit C
[reproduced in part below].

4. Institutional 4/6/4 Diapers.

These diapers would be produced in the same manner as item number 1 except with double layers of fabric and folded as per the diagram so that the finished product would result in a 4 layer outer panel and a 6 layer inner panel. Please see exhibit D
[reproduced in part below].

These diapers would be produced in 2 sizes, 12" x 17" and 14" by 21".

5. Institutional 4/8/4 Diapers.

These diapers would be produced in the same manner and in the same 2 sizes as those [in] ref. 4 with the addition of a 12 inch panel (per item number 3) hence increasing the layers of the center panel from 6 to 6.
Please refer to exhibit E [reproduced in part below].

EXHIBIT A

2. Prefold construction
? 20" x 141/2" finished dimensions
? 22oz/dozen weight
? prefolded with 3-layer center panel, 2-layer side panel
? sewn with white thread put-up
? 12 per package and 6 packages per case
? case size: 14.75 x 10.50 x
15.75

EXHIBIT B

4. Prefold - 82911 construction
? 201/2" x 141/2" finished dimensions
? 30oz/dozen weight
? prefolded with 5-layer center panel, 2-layer side panel
? sewn with white thread put-up
? 12 per package and 6 packages per case
? case size: 14.75 x 10.50 x
15.75

EXHIBIT C

5. Prefold - 82913 construction
? 201/2" x 141/2" finished dimensions
? 33oz/dozen weight
? 100% polyester fiber sponge insert,
6" wide, weight 3oz
? prefolded with 5-layer center panel, 2-layer side panel
? sewn with white thread put-up
? 12 per package and 6 packages per case
? case size: 15.25 x 10.50 x
15.75

EXHIBIT D
institutional gauze

6. Regular-464-01
7. Infant-464-00 construction
? infant 12" x 17", finished dimensions, 28oz/dz weight overedged with green thread
? regular 14" x 21" finished dimensions, 44oz.dz weight overedged with blue thread
? prefolded with 6-layer center panel, 4-layer side panel put-up
? infant bulk packed 24 dz per case
? infant bulk packed 24 dz per case EXHIBIT E

8. Regular 484-01 construction
? 14" x 21" finished dimensions
? 52oz/ dozen weight
? 8-layer center panel, 4-layer side panels
? overedged with blue thread put-up
? bulk 18 dozen per case

Finally, our examination of the fabric samples included with your March 26, 1993, letter, and the 90cm piece good sample from your April 28, 1993, letter has revealed that the fabrics are 3- thread twills which contain no folding or cutting lines formed by any means (e.g., a change in the weaving process or imprinting).

ISSUE:

What is the country of origin of the diapers for quota/visa purposes?

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). Exhibits B, C & E, supra, with their complex folding plus insertion of additional foam panels, clearly meet these requirements. The processes taking place in Exhibits A & D, supra (folding each side of the one or two layer fabric ~ of the way towards the other side, then sewing, overlocking and tacking) have also been ruled acceptable. See, e.g., HRL 086779 of April 25, 1990. Accordingly, the Chinese fabric has been substantially transformed in Namibia.

HOLDING:

As a result of the foregoing, the diapers are considered products of Namibia. 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

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