HQ 0955779 - Country of origin of a fitted sheet, flat sheet, and pillowcase; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 955779

May 12, 1994

CLA-2 CO:R:C:T 955779 CAB

CATEGORY: CLASSIFICATION

Ms. Mary Jo Muoio
Wolf D. Barth Co. Inc.
90 West Street
New York, NY 10006

RE: Country of origin of a fitted sheet, flat sheet, and pillowcase; Section 12.130, Customs Regulations

Dear Ms. Muoio:

This is in response to your inquiry of January 19, 1994, requesting a country of origin determination for bed linen. This request is on behalf of your client, Ascot & Company. A sample set comprised of a fitted sheet, flat sheet, and pillowcase was submitted for examination.

FACTS:

The articles in question are constructed of a woven blend of 70 percent cotton and 30 percent polyester fabric. You also state that future imported merchandise may be constructed of 55 percent polyester and 45 percent cotton fabric. The manufacturing process includes the following: The material is woven, printed or dyed in Pakistan. The fabric is then shipped to Thailand where the fabric is cut and sewn into the finished product. The flat sheet is cut to length and width (four sides), and hemmed. A ruffle is then sewn into the seam of the top edge of the flat sheet. The fitted sheet is cut to length and width (four sides), and elastic is fitted on two corners, while the other two corners have hemmed edges. The pillowcase is cut on all four sides, hemmed, folded, and a four inch piece of fabric is inserted along the folded top edge. The description of all of the subject articles is based on the representative samples submitted by you for examination.

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 operation;

(iii) The complexity of the manufacturing or processing operation;

(iv) The level or degree of skill and/or technology required; and,

(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), Customs Regulations, 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.

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 (four sides). After the fabric has been cut on four sides, Customs assesses the additional processing and makes a determination as to whether the additional processing coupled with cutting, 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 determined 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 952225, dated December 8, 1992, 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.

In your submission, you state that fabric is manufactured in Pakistan, cut to length and width in Thailand, and piping, ruffles, or a four inch top edge will be attached to the flat sheet in Thailand. The submitted sample is cut to length and width, hemmed, and has a ruffle inserted into the seam of the top edge of the flat sheet. The issue is whether the processing in Thailand is substantially complex so as to constitute a substantial manufacturing operation within the purview of Section 12.130(d).

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, fabric is cut on four sides, hemmed, and adorned with a ruffle. The processing required to add a ruffle to a flat sheet involves an extra manufacturing step which is more complex and time-consuming, than merely cutting flat sheets and hemming them.
Therefore, in accordance with prior Customs rulings, the country of origin of the flat sheet is Thailand.

The processing necessary to convert fabric manufactured in Pakistan into a finished fitted sheet in Thailand includes, cutting on all four sides, hemming, and sewing elastic to two of the sheet's corners. 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 country of origin of the fitted sheet is Thailand.

In 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 scenario, it appears that the fabric which will be cut and sewn into pillow cases in Thailand will undergo its last substantial transformation in that country.

HOLDING:

The country of origin of the flat sheet, fitted sheet, and pillowcase is Thailand.

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Your attention is directed to the Notice of Proposed Rule Making which the Customs Service published in the Federal Register on Monday, January 3, 1994 (59 FR 141). That notice proposed objective rules for determining the country of origin of goods imported into the United States. Although, the notice stated that the proposed rules were intended to codify our present origin rules, there are a few areas where the proposed rules are not consistent with Customs present position. The transaction described in this ruling is one of those instances. Accordingly, you should be aware that if the proposed rules are adopted as published, this ruling will no longer be valid and a different result may apply.

Sincerely,

John Durant, Director
Commercial

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