HQ 957170 - Country of origin determination for a garment bag and a dopp kit bag; 19 CFR 12.130; HRL 951889 (10/31/92); HRL 951481 (7/31/92); HRL 956634 (9/29/94). - United States International Trade Commision Rulings

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HQ 957170

January 27, 1995

CLA-2 CO:R:C:T 957170 SK

CATEGORY: CLASSIFICATION

Leonard L. Rosenberg
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, FL 33126-2022

RE: Country of origin determination for a garment bag and a dopp kit bag; 19 CFR 12.130; HRL 951889 (10/31/92); HRL 951481 (7/31/92); HRL 956634 (9/29/94).

Dear Mr. Leonard:

This is in response to your letter of October 11, 1994, on behalf of your client, Jaclyn, Inc., in which you request a country of origin determination for a garment bag and a dopp kit bag. Samples of the finished articles were submitted to this office for examination.

FACTS:

Style P613R1 is a garment bag made from woven rayon fabric with PVC backing. The garment bag, in its unfolded condition, is approximately 36 inches long measured from the top center of the bag, 24 inches across and 3 inches wide. The exterior seams are covered with PVC sponge, which is also used to make the handle and the identification tag. The bag features a full front zipper opening and a flap with a hole in the center which extends 8 inches up from the bottom of the front panel. When the bag is folded, the flap fits over the top of the bag and the handle can be inserted through the hole to provide a convenient means of carrying the bag.

The costs incurred in Taiwan represent 80 percent of the total cost per piece of producing style P613R1, and include the cost of fabric, zipper, PVC sponge, hardware, label, thread, polybag, design, dies and cutting. The costs incurred in

China represent 20 percent of the total cost per piece and include labor, carton and inland trucking.

Style P584-5 is a dopp kit bag (a hanging grooming bag). The entire outer surface of the bag is made of a woven rayon fabric backed with PVC. The bag features a flap that folds over the body of the bag which can be secured by a snap closure. In its opened state, the bag measures 16-1/4 inches long; folded, the bag measures 8-1/4 inches in length by 11-3/4 inches in width. All of the exterior seams of the bag are bound by PVC sponge. There is a small triangular-shaped fabric piece with a small loop at the apex, both made of the same rayon fabric, stitched into the PVC binding on the outer flap. The inside of the flap is lined with plastic sheet to form a zippered pocket. Attached to the fabric loop is a metal hanger which can be used when the bag is open or folded. The body of the bag features a zippered pocket that expands to 3 inches at the bottom. The inside of the bag is lined with plastic sheet.

The costs incurred in Taiwan represent 68 percent of the total cost per piece of producing style P584-5, and include the cost of fabric, plastic sheet, zipper, PVC sponge, hardware, label, thread, polybag, design, dies and cutting. The costs incurred in China represent 32 percent of the total cost per piece and include labor, carton, inland trucking and labels.

The fabric for both styles is woven in Taiwan where it is also cut into components. The components are assembled by sewing into the finished bags in China.

ISSUE:

What is the country of origin for the subject merchandise?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130 of the Customs Regulations (19 CFR 12.130), Section 12.130(b) 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 or textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operation into a new and different article of commerce.

Section 12.130(d) of the Customs Regulations sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states that 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) of the 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) of the Customs Regulations states that in 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;

(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;

Section 12.130(e)(1) provides that an article or material usually will be a product of a particular foreign territory or country, or insular possession of the United States, when, prior to importation into the United States, it has undergone in that foreign territory or country or insular possession, any of the following:

(i) Dyeing of fabric and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing;

(ii) Spinning fibers into yarn;

(iii) Weaving, knitting or otherwise forming fabric;

(iv) Cutting of fabric into parts and the assembly of those parts into the completed article; or

(v) Substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which have been cut from fabric in another foreign territory or country, or insular possession, into a completed garment (e.g. the complete assembly and tailoring of all cut pieces of suit-type jackets, suits, and shirts).

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) 951889, dated October 31, 1992, in which this office held that the assembly of luggage panels, zippers, grommets, piping webbing, labels and packaging materials into luggage and tote bags did not involve sufficient skill or complexity to constitute a substantial transformation. See also HRL 951481, dated July 31, 1992, in which Customs determined that the assembly of nylon fabric, thread, binding, zippers, webbing trim and hang tags into completed knapsacks was not substantial assembly and that the country in which the materal was formed and cut was the country of origin for these articles. We reach a similar conclusion in this 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 also HRL 956634, dated September 29, 1994.

In the instant case, the fabric used to construct these garment bags is cut in Taiwan and this materially alters the fabric into designated component pieces. The country of origin of these articles is Taiwan as that is where the fabric was manufactured and cut into specific parts and where the artilcles last underwent a substantial transformation.

HOLDING:

The country of origin for styles P613R1 and P584-5 is Taiwan as this is the country where the articles last underwent a substantial transformation; the fabric
unerwent a substantial manufacturing operation (cutting) which transformed fabric into a new and different article of commerce (luggage components).

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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