HQ 957470 - Country of Origin determination for pillow cases; cutting and assembly in United Arab Emirates; 19 CFR 12.130(e)(1)(iv); cutting and assembly constitutes substantial transformation - United States International Trade Commision Rulings

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HQ 957470

April 14, 1995

CLA R:C:T 957470 jb

CATEGORY: CLASSIFICATION

Mr. Haytham Al Qadwa
International Textile Industries
P.O. Box 1830
Ajman
United Arab Emirates

RE: Country of Origin determination for pillow cases; cutting and assembly in United Arab Emirates; 19 CFR 12.130(e)(1)(iv); cutting and assembly constitutes substantial transformation

Dear Mr. Qadwa:

This letter is in response to your inquiry of December 10, 1994, requesting a country of origin determination for certain pillow cases. No samples were submitted to this office for examination.

FACTS:

Plain fabric will be imported either from India, Pakistan, Hong Kong or Korea. The fabric will then be sent to United Arab Emirates for cutting, stitching and packing.

ISSUE:

What is the country of origin of the merchandise at issue?

LAW AND ANALYSIS:

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;

Section 12.130(e)(1) describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred:

(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 of all cut pieces of suit-type jackets, suits and shirts).

In determining the country or origin for pillow cases, Customs refers to Belcrest Linens v. United States, 741 F.2d 1368, (Fed. Cir. 1984). The court held that a bolt of woven fabric that was manufactured, stenciled with embroidery, and imprinted with lines of demarcation in China prior to being sent to Hong Kong where the fabric was cut, sewn into pillow cases, and packaged, was subject to its last substantial transformation in Hong Kong. Thus, applying the court's rationale to the instant scenario, it appears that the fabric which will be cut and sewn into pillow cases in United Arab Emirates will undergo its last substantial transformation in that country. (See, HQ 955779, dated May 12, 1994, and HQ 952909, dated April 12, 1993, wherein the country of origin of pillow cases is also discussed).

HOLDING:

The country of origin of the submitted pillow cases is United Arab Emirates. It is at the cutting and sewing process in United Arab Emirates that the fabric last undergoes a substantial transformation and is transformed into new and different articles of commerce. As this constitutes a substantial transformation of that fabric, United Arab Emirates is the country of origin for the subject pillow cases.

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,

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