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HQ 956634




September 29, 1994

CLA-2 CO:R:C:T 956634 SK

CATEGORY: CLASSIFICATION

Melvin S. Mogil
California Innovations Inc.
4211 Yonge Street, suite 610
Willowdale, Ontario
Canada M2P 2A9

RE: Country of origin of soft-sided cooler; 19 CFR 12.130; material cut in Taiwan; assembly of pre-cut components in China; mere assembly is not substantial transformation; HRL 951899

Dear Mr. Mogil:

This is in response to your letter of June 6, 1994, requesting a country of origin determination for the "THERMALWHIZ Collapsible Cooler."

FACTS:

The materials for the "THERMALWHIZ Collapsible Cooler," are sourced and cut into component parts in Taiwan and assembled in China. The specific operations are as follows:

1) Most of the raw materials that comprise this product are purchased in Taiwan (73 cents worth of material is purchased in China, representing 12 percent of the total $5.95 cost of the product);

2) The raw materials are cut into cooler components in Taiwan;

3) The pre-cut components are assembled into the completed cooler in China. Assembly costs incurred in China represent 6 percent (36 cents) of the total price ($5.95) of the cooler. A total of 18 percent ($1.09) of the total cost of the product is incurred in China.

4) 82 percent ($4.86) of the cost of the product is incurred in Taiwan (i.e., cost of raw materials, cost of cutting operations, shipping expenses to transport the component pieces from Taiwan to China).

Although no sample was submitted to Customs for examination, you state that the "THERMALWHIZ Collapsible Cooler" was previously classified under subheading 4202.92.3030, HTSUSA, which provides for, inter alia, other travel, sports and similar bags, with outer surface of textile man-made fibers. The applicable textile quota category is 670.

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.

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 cooler is incurred in Taiwan (82 percent of the total cost of the cooler), as that is where nearly all of the raw materials are sourced and where the material is cut into component parts. Accordingly, the country of origin of the subject cooler is Taiwan as that is where the
articles last underwent a substantial transformation and where the greatest value was added to the subject merchandise.

HOLDING:

The country of origin of the "THERMALWHIZ Collapsible Cooler" 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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