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HQ 957241

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December 29, 1994

CLA-2 CO:R:C:T 957241 GG

CATEGORY: CLASSIFICATION

Mr. Irving Chung
Marketing Manager
Clement Textile & International Corporation 2266 Aurora Blvd.
(Tramo) Pasay City
Metro Manila, Philippines

RE: Country of Origin of Comforter Cover

Dear Mr. Chung:

This is in response to your request of October 26, 1994, for a binding ruling on the country of origin of comforter covers manufactured by your company.

FACTS:

Fabric that is woven, dyed and finished in the People's Republic of China is imported in rolls into the Philippines where it is made into comforter covers. The steps involved in the manufacturing process in the Philippines are as follows.

The rolled fabric is spread according to specific length on the cutting table and is then cut on a per layer basis. The cut fabric is then hemmed lengthwise using a single stitch sewing machine. It is then folded over and the top and remaining open length are closed by machine overlock stitching, reinforced with single stitches. The semi-completed comforter cover is then turned inside out and the portions on each side of the end of the cover that will not form the opening are single stitched closed by machine. The washing label is simultaneously attached during this process. Four button holes are made across the opening, the buttons are sewn on, and then the comforter covers are trimmed, inspected, folded, and packed for shipment to the United States.

ISSUE:

What is the country of origin of the comforter covers?

LAW AND ANALYSIS:

Country of origin determinations for textile products are made pursuant 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 product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

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

Section 12.130(e)(1) of the Customs Regulations describes manufacturing or processing operations from which an article will normally be considered a product of the country in which those operations occurred. Pertinent operations are:

(iii) Weaving, knitting or otherwise forming fabric;

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

Applying these examples here, it is apparent that the fabric from which the comforters are made becomes a product of China where it is woven. We must then determine whether the fabric is further substantially transformed into new and different articles of commerce when it is cut and assembled into comforter covers in the Philippines. Section 12.130(e)(2)(ii) of the Customs Regulations cautions that an article or material usually will not be considered to be a product of a particular foreign country by virtue of merely cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use.

Treasury Decision 85-38 (19 Cust. Bull. 58, 67; 50 FR 8714), which is the final rule document establishing 19 CFR 12.130, cites towelling or bed linen material as examples of fabrics which are readily identifiable as being intended for a particular commercial use. Customs has consistently taken the position that in order for flat or fitted sheets to be deemed to have undergone a substantial manufacturing process in a particular country or foreign territory, the fabric must undergo, at a minimum, the cutting to length and width of fabric, hemming and yet another processing step. See, for example, Headquarters Ruling Letter (HRL) 954872, dated December 2, 1993; HRL 954710, dated October 7, 1993; and HRL 953477, dated May 10, 1993. We have determined, however, that the process of cutting fabric and assembling it into a comforter cover is sufficiently complex to be deemed a substantial manufacturing operation for country of origin purposes. See, for example, HRL 952909, dated April 12, 1993; and HRL 733180, dated December 13, 1990. A new and different article of commerce results when the fabric is made into the comforter cover. Consequently, the comforter cover last undergoes a substantial transformation in the Philippines, and, pursuant to 19 CFR 12.130(b), is a product of that country.

HOLDING:

The country of origin of the comforter covers is the Philippines.

This ruling is issued pursuant to the provisions of Part 177 of the Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and to the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Sincerely,

John Durant
Director, Commercial

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