HQ 0956377 - Country of Origin of soft-sided luggage; 19 CFR 12.130; fabric manufactured and cut in Taiwan; assembly of pre-cut components in China; mere assembly is not substantial transformation; HRL 951899 (10/31/92); 954225 (8/30/93). - United States International Trade Commision Rulings

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HQ 956377

August 9, 1994

CLA-2 CO:R:C:T 956377 SK

CATEGORY: CLASSIFICATION

William D. Outman, II
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

RE: Country of Origin of soft-sided luggage; 19 CFR 12.130; fabric manufactured and cut in Taiwan; assembly of pre-cut components in China; mere assembly is not substantial transformation; HRL 951899 (10/31/92); 954225 (8/30/93).

Dear Mr. Outman:

This is in response to your letter of April 11, 1994, on behalf of your client, the Samsonite Corporation, requesting a country of origin determination for "Traveller Lite Tech" soft- sided suitcases. No samples were submitted to Customs for examination.

FACTS:

The specific merchandise at issue in this ruling, Samsonite's "Traveller Lite Tech" suitcase, is produced in Taiwan and assembled in China. The specific operations are as follows:

TAIWAN OPERATIONS

1) The 600 D polyester fabric with polyurethane coating and the 210 D nylon fabric with polyurethane coating are woven, dyed, coated and finished;

2) The fabric is cut into component parts (17 separate pattern pieces of the 600 D polyester fabric and 7 separate pattern pieces of the 210 D nylon fabric);

3) Sheets of polyvinyl chloride (PVC) are produced by dyeing, extruding and laminating machines. These sheets are cut into PVC sheet components for the tops and bottoms of the suitcases;

4) Polypropylene and polyethylene materials are manufactured by adding coloring to the compounds and then heating the materials, extruding the material into board shape and finishing the boards. The boards are then cut to shape;

5) Zippers are manufactured and assembled;

6) Webbing and elastic tie tape are manufactured;

7) Coil wire is manufactured;

8) Wheels are manufactured and assembled;

9) The plastic frame is manufactured by heating PVC in pellet form;

10) The plywood base material for the suitcases is sourced in Indonesia and cut to shape in Taiwan.

The costs incurred in Taiwan represent 86 percent of the total value of each suitcase (inclusive of materials and labor).

CHINA OPERATIONS

1) The fabric is glued and heat-sealed in preparation for sewing;

2) The plastic frame is bent to a c-shape;

3) The fabric panels are assembled and the webbing, zippers and other components are sewn to the assembled panels;

4) The plastic frame is riveted to the plywood base and the base is then fitted into the sewn luggage panels. The wheels and handle are affixed to the frame.

The costs incurred in China represent 14 percent of the total value of each suitcase (inclusive of materials and labor).

ISSUE:

What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

Section 12.130(b) of the Customs Regulations (19 CFR 12.130(b)) provides that textile products that are processed in more than one country or territory shall be products of that country or territory where they last underwent a substantial transformation. Your attention is directed to Section 12.130(e)(v) of the Customs Regulations which states that an article will usually have undergone a substantial transformation (change in country of origin) if it has undergone a substantial assembly of all cut pieces into a completed article.

Customs has long held that the mere assembly of goods, entailing simple combining operations, trimming or joining together by sewing, is not enough to substantially transform the components of an article into a new and different article of commerce. See Headquarters Ruling Letter (HRL) 082747, dated February 23, 1989, in which Customs determined that the assembly of jeans was not a substantial transformation and HRL 082787, dated March 9, 1989, which reached a similar conclusion with regard to a jogging suit. In the instant case, the assembly process in China involving the sewing together of components cut from fabric in Taiwan does not involve sufficient skill or complexity to constitute a substantial transformation as defined by the regulations set forth supra. See HRL 951899, dated October 31, 1992, in which Customs issued a country of origin determination for soft-sided luggage manufactured in a similar manner. Nor do the manufacturing steps performed in China in addition to the assembly of the panels (i.e., gluing, heat sealing, bending of the frame, riveting) constitute substantial manufacturing operations as they are not complex operations either in terms of skill or the amount of time required to perform them.

Pursuant to 19 CFR 12.130(d)(2)(v), the "value added" to an article is another factor which aids in determining country of origin. The greatest cost in producing the articles at issue is incurred in Taiwan, as that is where the fabric and nearly all of the component parts are manufactured. Accordingly, the country of origin of these articles is Taiwan as that is where the articles last underwent a substantial transformation and that is where the greatest value was added to the subject merchandise.

HOLDING:

The country of origin of the subject merchandise is Taiwan.

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 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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