HQ 0956256 - Country of origin of braided textile strips. - United States International Trade Commision Rulings

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HQ 956256

April 29, 1994

CLA-2 CO:R:C:T 956256 HP

CATEGORY: CLASSIFICATION

Mr. Mark J. Angus
The Leather Factory, Inc.
P.O. Box 50429
Fort Worth, TX 76105

RE: Country of origin of braided textile strips.

Dear Mr. Angus:

This is in reply to your letter of March 29, 1994, to our Dallas, Texas, office. That letter concerned the country of origin of braided strips, produced in Taiwan and China.

FACTS:

The merchandise at issue consists of braided synthetic horsehair strips, imported in rolls. You state the appropriate subheading for this merchandise is under sunbheading 5608.10.3090, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), and do not request that we verify the classification.

The fibers of polypropylene are made in Taiwan. After the fibers are braided in Taiwan, the braids are sent to China to be stitched together in a horizontal row of twelve braids. The completed product is then returned to Taiwan, then shipped to you in Dallas, Texas. You state that 97% of the manufacturing cost is Taiwanese.

You state that the product currently requires a Taiwanese visa. You now question whether the completed product can be shipped to the U.S. directly from the Chinese assembler's warehouse in Hong Kong and still qualify for a Taiwanese visa.

ISSUE:

Whether the country of origin of the completed product is considered China or Taiwan?

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.

As we stated, for a manufacturing operation to change the country of origin of a good, such operation must be considered "substantial." It is clear from examination of the samples, and from your valuation statement above, that the Chinese operation, a three-ply thread run through the row of braids, is a simple joining or assembly operation. As such, it is our opinion that the country of origin for the completed product remains Taiwan.

With respect to your question concerning the direct shipment of the finished product from Hong Kong to the United States, we cannot answer as to the restrictions imposed on the exportation of goods by foreign governments. Clearly, there is a potential problem in obtaining approval from China or Hong Kong for export from either of these countries of textile products bearing a third country of origin label. U.S. Customs, however, will accept a Taiwanese visa for the merchandise manufactured in the manner described herein.

HOLDING:

As a result of the foregoing, the instant merchandise is considered a product of Taiwan.

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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