HQ 0955039 - Country of origin of a comforter - United States International Trade Commision Rulings

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HQ 955039

December 27, 1993

CLA-2 CO:R:C:T 955039

CATEGORY: CLASSIFICATION

Ann M. Williams
A.N. Deringer, Inc.
30 West Service Road
Champlain, NY 12919-9703

RE: Country of origin of a comforter

Dear Ms. Williams:

This is in response to your inquiry of September 3, 1993, requesting the country of origin and preferential duty treatment of a comforter, on behalf of your client, Marimac Inc., located in St. Laurent, Quebec. The subject merchandise will be imported through the port of Champlain, New York. An unfinished sample was submitted for examination.

The question of country of origin will be addressed, however the issue of preferential duty treatment regarding the subject merchandise can not be addressed in this ruling. This is due to The North American Free Trade Agreement (NAFTA) entering into force on January 1, 1994, on an exchange of written notifications between the NAFTA Parties certifying the completion of necessary legal procedures. Pursuant to Section 107 of the North American Free Trade Implementation Act, the operation of the United States-Canada Free-Trade Agreement is to be suspended by virtue of the entry into force of NAFTA.

FACTS:

The manufacturing steps are as follows: Fabric is woven in Pakistan and cut and sewn on all three sides to construct a comforter envelope; The comforter envelope is then shipped to Canada where it is filled with polyester wadding and sewn on the fourth side; The envelope is then put on a comforter scrolling machine to prevent the filling from moving; Finally, the finished comforter is trimmed, inspected, folded, and packed for transport to the United States.

ISSUE:

What is the country of origin of the merchandise at issue?

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 and/or technology required

(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 into 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.

In this instance, fabric is woven, cut on three sides and hemmed into a comforter envelope in Pakistan. The comforter envelope is then exported to Canada for filling, sewing on the fourth side, and finishing. Customs must determine whether the processing in Canada is substantially complex so as to amount to a substantial manufacturing operation. Since the comforter cover is exported to Canada already cut into parts and assembled, in accordance with 12.130(e)(1)(iv), it has undergone a substantial transformation in Pakistan. The processing operation in Canada involves stuffing and minor finishing operations, as such, it does not amount to the substantial manufacturing operation required to render it a product of Canada.

In Headquarters Ruling Letter 950850, dated April 16, 1992, Customs determined that woven fabric which had been manufactured in various Oriental countries and cut into a comforter, assembled, and filled in Canada was subject to a substantial transformation in Canada. The processing of the fabric in Canada was sufficiently complex and resulted in a finished comforter which was a new and different article of commerce, thus a substantial transformation had occurred. This cited scenario is different from the instant scenario since a comforter envelope is cut and assembled in Pakistan and sent to Canada for minor processing operations. There is no new and different article of commerce in this case. Thus, the merchandise at issue is subject to its last substantial transformation in Pakistan and as such is a product of Pakistan.

HOLDING:

The country of origin of the merchandise in question is Pakistan.

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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