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HQ 954229


September 2, 1993

CLA-2 CO:R:C:T 954229 CAB

CATEGORY: CLASSIFICATION

Knox White, Esq.
Haynsworth, Marion, McKay & Guerard
P.O. Box 2048
Greenville, SC 29602

RE: Country of origin of fitted crib sheets

Dear Mr. White:

This is in response to your inquiry of May 5, 1993, on behalf of your client, Gerber Childrenswear, requesting a country of origin ruling on cotton crib sheets. The merchandise in question will be entered through the ports of Charleston and Savannah. A sample was submitted for examination.

FACTS:

A greige fabric will be manufactured in China and exported to the United States for further processing. The processing in the United States includes scouring, bleaching, adding optical whiteners and softeners, dyeing, and drying. The white bleached fabric will then be cut at the top and bottom (width), sewn, elastic will be fitted and attached on all four corners, folded, and packaged.

ISSUE:

What is the country of origin of the merchandise in question?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1), Customs Regulations, states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity, (ii) Fundamental character or (iii) Commercial use.

Section 12.130(d)(2), Customs Regulations, states that for determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article

(ii) The time involved in the manufacturing or processing

(iii) The complexity of the manufacturing or processing

(iv) The level or degree of skill

(v) The value added to the article or material

An article or material usually will be a product of a particular foreign territory or country when it has undergone prior to the importation into the U.S. in that foreign territory or country any of the following:

(i) Dyeing of fabric and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing.

When fabric is cut to length and width (four sides) and hemmed to construct a sheet, a new and different article of commerce is created. However, in order for a substantial transformation to result within the purview of Section 12.130, there must be additional processing that is sufficiently complex so as to constitute a substantial manufacturing operation. Merely cutting fabric on two sides, hemming, and adding elastic is a simple processing operation. When making a determination as to whether fabric used to make sheets has been substantially transformed, the minimum processing required is cutting the fabric to length and width. After the fabric has been cut on four sides, Customs assesses the additional processing and determines whether the processing amounts to a substantial manufacturing operation.

In prior cases, Customs has evaluated the degree of skill, value, and amount of time expended to manufacture sheets and made substantial transformation determinations accordingly. In Headquarters Ruling Letter (HRL) 952909, dated April 12, 1993, Customs concluded that fabric that had been cut to length and width, coupled with the additional processing required to attach piping to flat sheets amounted to a substantial manufacturing operation. In HRL 953477, dated May 18, 1993, Customs distinguished fitted sheets that had been cut to length and width and fitted sheets that had merely been cut on two sides. Customs applied the criteria stipulated in Section 12.130 and concluded that merely cutting fabric to length, hemming, and adding elastic to the corners did not amount to a substantial manufacturing operation. Customs evaluated the processing involved in manufacturing the fitted sheets that had been cut to both length and width and decided that the processing involved amounted to a substantial manufacturing operation.

In this instance, the material used to make the fitted crib sheet has only been cut to width. In light of prior Customs ruling, it is clear that the processing involved in constructing the subject fitted sheets does not amount to a substantial manufacturing operation within the purview of Section 12.130(d).

To comply with Section 12.130(e)(1)(i), a fabric must be both dyed and printed, as well as being subject to the other required processing. See, HRL 089230, dated May 10, 1991, where the subject merchandise was greige fabric that had been produced in China, scoured, bleached, printed, and pre-shrunk in Hong Kong, and finally cut, hemmed, and packaged in the Philippines. Customs stated that none of the processing which the fabric was subjected to after it was formed in China resulted in a substantial transformation. In this case, the greige fabric used to make the fitted sheets is not dyed and printed in addition to other processing in any single country. Since this type of processing is a requirement of Section 12.130(e)(1)(i), the merchandise in question underwent its last substantial transformation in China, the country in which the fabric was manufactured.

In your submission you refer to HRL 733787, dated March 14, 1991, where Customs concluded that greige fabric manufactured in Pakistan, exported to Sri Lanka where it was cut on four sides (length and width), hemmed, and converted into fitted sheets underwent its last substantial transformation in Sri Lanka. You state that the processing of the subject fitted sheet in HRL 733787 is virtually identical to the processing done to the fitted crib sheet in this instance. There is an important difference in the processing which you fail to acknowledge. This important distinction is that the fitted sheet of HRL 733787 had been cut on four sides (length and width) and the fitted crib sheet at issue has only been cut on two sides (width). As stated above, the minimum requirement for a sheet to be substantially transformed in a second country is cutting to both length and width coupled with additional processing. Consequently, the fitted crib sheet at issue does not undergo a substantial transformation in the United States.

HOLDING:

The country of origin of the fitted crib sheet is China.

The holding set forth above 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. Accordingly, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director
Commercial Rulings Division

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