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HQ 956950




May 11, 1995

CLA R:C:T 956950 jb

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.2000

Marlyse Gros
Mably International, Inc.
14 East 60th Street
New York, NY 10022

RE: Classification and country of origin determination for tote bag; 19 CFR 12.130; fabric cut in Taiwan; assembly is not a substantial transformation

Dear Ms. Gros:

This letter is in response to your inquiry of August 22, 1994, requesting a classification and country of origin determination for a tote bag. A sample was submitted to this office for examination.

FACTS:

The submitted tote bag, referenced style J1457 Tendre Tote, is composed of 55 percent ramie and 45 percent polyester fibers, and imitation leather trim. It measures 18 inches across the top, 13 inches across the bottom, 15 inches in height, and has an oval base of 13 inches by 6 inches. The tote is carried by double inverted "U" shoulder straps measuring 1 inch wide by 26 inches long. The interior is vinyl lined and features a small zippered pocket and a nylon coil zipper closure at the top. The tote is designed to be a general purpose carry all, similar to a travel bag or shopping bag.

You state that all materials are of Taiwan origin and all processing of the components takes place in Taiwan except for sewing and assembly, which take place in China. The manufacturing operations are as follows:

TAIWAN

- ramie/polyester threads are spun into yarn - yarn is woven into fabric which is dyed and finished - PVC is extruded into "Patent Leather"
- woven cotton backing is applied to the back of the PVC - PVC is extruded into PVC sheet lining
- thread, zippers, nylon zipper tape, zipper puller, zipper head, foam padding, metal plaques, inside label, cardboard inserts, and plastic tubing are sourced

CHINA

- PVC trim is glued to the handle and top border of the bag - CD ornament is attached to the body
- patent PVC trim is sewn to the top and bottom of the body and to the handle
- inner patent PVC trim and inside PVC lining sheet are sewn together
- foam padding is sewn to the rest of the body - front body and back body are sewn to the zipper - PVC patent is sewn around plastic tubing to make the piping
- hanging zipper pocket is sewn inside the bag - piping is sewn to the base and the base is sewn to the bag - binding is sewn on inside seams

ISSUE:

What is the proper classification and country of origin of the subject merchandise?

LAW AND ANALYSIS:

Classification

Classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRI will be applied, in the order of their appearance.

Heading 4202, HTSUSA, provides for, among other things, travel, sport and similar bags. The subject tote bag is classifiable in subheading 4202.92.2000, HTSUSA, in the provision for travel, sport, and similar bags with an outer surface of textile materials. The provision for travel, sports and similar bags is defined by Additional U.S. Note 1 to chapter 42, HTSUSA, as follows:

For the purposes of heading 4202, the expression "travel, sports and similar bags" means goods, other than those falling in subheadings 4202.11 through 4202.39, of a kind designed for carrying clothing and other personal effects during travel, including backpacks and shopping bags of this heading, but does not include binocular cases, camera cases, musical instrument cases, bottle cases and similar containers.

Country of Origin

Section 12.130 of the Customs Regulations (19 CFR 12.130) sets forth the principles of country of origin for textiles and textile products subject to Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854).

Pursuant to 19 CFR 12.130(b), the standard of substantial transformation governs the country of origin determination where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing.

The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d)(2). The following are 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 in the manufacturing or processing operations;

(v) The value added to the article or material;

In this instance, the major operation of cutting the fabric to shape is performed in Taiwan. The cutting operation requires more time and degree of skill than the assembly operation, and converts the component parts dedicated for use into the finished tote bag. The production and labor costs incurred in Taiwan are also significantly greater than those incurred in China.

In addition, subsection 12.130(e)(2) states, in pertinent part, that an article usually will not be considered to be a product of a particular foreign country by virtue of merely having undergone:

(i) Simple combining operations, labeling, pressing, cleaning or dry cleaning, or packaging operations, or any combinations thereof;

The operations performed in China appear to be the simple assembly, combining and packaging operations identified in subsection 12.130(e)(2). These operations are not considered substantial manufacturing processes for purposes of conferring country of origin status. No great degree of skill or technology is required in the assembly.

Finally, prior Customs country of origin determinations for containers similar to the subject merchandise support the conclusion that these goods originate in Taiwan. See Headquarters Ruling Letter 957872, dated April 24, 1995 (luggage manufactured and cut into panels in Taiwan which are assembled in China are goods originating in Taiwan); HQ 956377, dated August 9, 1994 (soft sided luggage manufactured and cut into panels in Taiwan which are assembled in China are goods originating in Taiwan); HQ 955477, dated February 16, 1994 (tapestry handbags manufactured and cut into panels in Korea which are assembled in China are goods originating in Korea); HQ 955087, dated December 22, 1993 (textile travel bags and backpacks manufactured and cut into panels in Taiwan which are assembled in China are goods originating in Taiwan); HQ 954225, dated August 30, 1993 (textile tote bags and luggage manufactured and cut into panels in Taiwan which are assembled in China are goods originating in Taiwan); HQ 951899, dated October 31, 1992 (tote bags and luggage with components fabricated and cut to shape in Taiwan, stitched and assembled in China, originated in Taiwan).

Based on the foregoing, we conclude that the cutting process performed in Taiwan is where the merchandise last undergoes a substantial transformation.

HOLDING:

The subject tote bag, referenced style J1457 Tendre Tote, is classifiable in subheading 4202.92.2000, HTSUSA, which provides for travel, sports and similar bags: with outer surface of textile materials: of vegetable fibers and not of pile or tufted construction: other. The applicable rate of duty is 6.4 percent ad valorem and the quota category is 870.

The country of origin of the subject merchandise is Taiwan. It is at the cutting process in Taiwan that the textile product undergoes a substantial transformation and is transformed into a new different article of commerce.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service which is updated weekly and is available for inspection at the local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact the local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

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 the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

Should it be subsequently 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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