HQ 0952909 - Country of origin of Flat Sheets, Fitted Sheets, Comforter Covers, and Pillowcases; Section 12.130, Customs Regulations; Duvet Covers - United States International Trade Commision Rulings

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HQ 952909

April 12, 1993

CLA-2 CO:R:C:T 952909 CAB

CATEGORY: CLASSIFICATION

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

RE: Country of origin of Flat Sheets, Fitted Sheets, Comforter Covers, and Pillowcases; Section 12.130, Customs Regulations; Duvet Covers

Dear Mr. Peterson:

This letter is in response to your inquiry of November 5, 1992, requesting a country of origin determination, on behalf of Natural Feather and Textiles, Inc., for flat sheets, fitted sheets, comforter covers, and pillow cases. This merchandise will be imported at various ports including Los Angeles/Long Beach, Seattle and Minneapolis. No samples were submitted for examination.

FACTS:

Fabric constructed of 100 percent greige cotton will be manufactured in the People's Republic of China, hereinafter "China". The greige fabric will then be singed, bleached and dyed. The dyed fabric will then be sent in bolts to Hong Kong for additional processing. The merchandise is further processed as follows:

Flat Sheets

Hong Kong - The rolls of fabric will be cut to both length and width. The top edge of the fabric will be folded over to form the top hem. During the construction of the top hem, a narrow strip of woven fabric will be inserted between the folded portion of the fabric. In order to secure the strip of woven fabric, the top portion of the material will be stitched horizontally. You refer to this strip of fabric as "color blocking". Customs has consistently referred to this narrow strip of material attached to bed linen as "piping". The material will then be hemmed on the sides and the bottom, folded, and packaged for exportation.

Pillowcases

Hong Kong - The fabric will be cut to length and width, hemmed, sewn on three sides, folded, and packaged for exportation.

Fitted Sheets

Hong Kong - The fabric will be cut to length and width, gussets will be marked and cut, the corner gussets will be sewn and hemmed on all four sides. Elastic will be fitted and sewn along the corners, the top, and bottom of the fabric. The item will then be folded and packaged for export to the United States.

Comforter Covers

The fabric will be marked, cut to both length and width, hemmed, sewn together on the sides, marked for button holes, button holes sewn and cut into the fabric, and buttons attached.

ISSUE:

What is the country of origin for 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

Section 12.130(e)(1)(iv), Customs Regulations, states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts in the completed article has occurred in that country. However, 12.130(e)(2)(ii) states that a material will usually not be considered to be a product of a particular foreign country by virtue of merely having undergone cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use.

Headquarters Ruling Letter (HRL) 952579 dated November 25, 1992, confronted the issue of where the last substantial transformation occurred when flat sheets had been processed in three countries. Customs concluded that the last substantial transformation occurred in Country "A" where the fabric had been manufactured; and not in either Country "B" where the fabric was bleached and printed, or Country "X" where the fabric was brushed, shrunk, cut, and hemmed. See also, HRL 952577 dated February 1, 1993, where Customs was faced with a country of origin question regarding flat sheets that had been manufactured, bleached and printed in China, and cut and hemmed in Mauritius. Customs held that the processing in Mauritius did not amount to a substantial transformation in accordance with Section 12.130.

In this instance, the woven fabric will be manufactured in China. The fabric is then exported to Hong Kong for further processing. This additional processing includes cutting the fabric to both length and width, hemming, and sewing piping to the sheet's top edge. The issue presented is whether the processing in Hong Kong will be substantially complex so as to result in a new and different article of commerce.

As emphasized in the cited rulings, Customs has consistently held that minor processing (cutting and hemming) of flat bed sheets does not constitute a substantial transformation within the meaning of Section 12.130. However, in the instant case, the fabric in question will be cut to both length and width, hemmed, and adorned with piping. The processing required to add piping to a flat sheet involves an extra manufacturing step which is more complex and time-consuming, then merely cutting flat sheets and hemming them.

When fabric is cut to length and width and hemmed in order to construct a flat 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. In this case, cutting the fabric to length and width coupled with the additional processing required to attach the piping will result in the material undergoing a complex manufacturing operation in Hong Kong. Therefore, the country of origin of the flat sheets at issue will be Hong Kong. This conclusion is in accordance with the holding in HRL 952225 dated December 8, 1992, where Customs determined that the flat sheet processing operation in Thailand which included cutting fabric to length and width, hemming, and adorning with either piping or ruffles was sufficiently complex so as to amount to a substantial transformation in Thailand.

The processing necessary to convert the fabric into fitted sheets in Hong Kong will include marking, cutting to length and width, and sewing elastic to the top, bottom, and corners of the sheet. The degree of difficulty and skill involved in the processing required to transform the material at issue into a fitted sheet will be enough to result in a new and different article of commerce. Therefore, the fitted sheets will undergo a substantial transformation in Hong Kong.

When determining the country of origin for pillowcases, Customs refers to Belcrest Linens v. United States, 741 F.2d 1368, (Fed. Cir. 1984). The court held that a bolt of woven fabric that was manufactured, stenciled with embroidery, and imprinted with lines of demarcation in China prior to being sent to Hong Kong where the fabric was cut, sewn into pillowcases, and packaged was subject to its last substantial transformation in Hong Kong. Thus, when applying the court's rationale to the instant case, it appears that the fabric that will be cut and sewn into pillow cases in Hong Kong will undergo its last substantial transformation in that country.

The comforter covers will be cut to length and width, folded and sewn together on the sides. Buttons will also be added to the finished product. The manufacturing operation involved in making the finished comforter covers is commensurate in degree of skill and amount of time to that required in the manufacturing operations involved in making fitted sheets, pillow cases, and adorned sheets. As a result of this additional complex processing, the fabric will become a new and different article of commerce. Therefore, within the purview of Section 12.130, the comforter covers will undergo a substantial transformation in Hong Kong. This conclusion is in accordance with HRL 733180 of December 13, 1990, which determined that fabric manufactured in Turkey and sent to Australia to be made into comforter covers underwent its last substantial transformation in Australia.

HOLDING:

Based on the foregoing, the country of origin of the flat sheets, pillow cases, comforter covers, and fitted sheets is Hong Kong.

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

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