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HQ 958383



February 14, 1996
CLA-2 RR:TC:TE 958383 SK

CATEGORY: CLASSIFICATION

J.M. Abrahams
Phil Patterson Corp.
4521 Fleur Drive, ste. F
Des Moines, IA 50321-2370

RE: Country of origin determination; 19 CFR 12.130; soft-sided luggage and carrying cases; material cut in Taiwan; assembly of pre-cut components in China; mere assembly is not substantial transformation; HRL's 951899 (10/31/92); 954225 (8/30/93); 956634 (9/29/94); 957700 (3/29/95); 958222 (7/28/95); Section 334 of the Uruguay Round.

Dear Mr. Abrahams:

This is in response to your letter of July 10, 1995, in which you request a country of origin determination for seven styles of soft-sided luggage and carrying cases. This office was provided with detailed descriptions of the manufacturing processes performed on the subject merchandise in Taiwan and the People's Republic of China.

FACTS:

The seven styles at issue are referenced style numbers 4350, 4385, 4420, 4308, 4220, 4433 and 4520. All have outer surfaces of man-made textile materials and are lined with vinyl sheeting. They feature an assortment of accessory pockets, compartments, zippers, clasps, velcro-like closures, buckles, carry handles and adjustable shoulder straps. A brief description of each style follows:

*Style 4350 ("Portfolio") -- measures approximately 12-1/2 by 16-1/2 inches; three sided zipper, woven textile carry handles and detachable shoulder strap; various internal pockets and compartments.

*Style 4385 ("Folding Duffle") -- measures approximately 11-1/2 by 9-3/4 inches (no length measurement provided); center top zipper; woven textile carry handles and detachable shoulder strap.

*Style 4420 ("Portfolio") -- similar in overall design to style 4350 except for a single carry handle and flap closure which is secured by means of two buckles.

*Style 4308 ("Square Wheel Duffle") -- measures approximately 14-1/2 by 13-1/4 by 29 inches; three sided top zipper, woven textile carry handles and detachable shoulder strap; various external and internal pockets and compartments; four recessed wheels.

*Style 4220 ("Expandable Square Duffle") -- measures approximately 10-3/4 by 10-3/4 by 21-1/4 inches; three sided top zipper, three sided zippers at both ends of bag; woven textile carry handles and detachable shoulder strap; various external and internal pockets and compartments.

*Style 4433 ("Pear Duffle") -- measures approximately 13-1/4 by 10-3/4 in width at the base and 4-3/4 inches in width at the top by 21 inches; center top zipper; woven textile carry handles and detachable shoulder strap; external zipper closure pocket and back "wet" pocket with mesh flap ventilation.

*Style 4520 ("Briefcase/Backpack") -- measures approximately 12-1/4 by 13-1/4 by 29 inches; three sided top zipper, woven textile carry handles and detachable shoulder strap; various external and internal pockets and compartments

Each of the seven cases undergoes the same general manufacturing processes, described as follows: TAIWAN
1. Vinyl-backed nylon material and vinyl lining are cut into components pieces;

2. Velcro, zippers and casters are sourced.

PEOPLE'S REPUBLIC OF CHINA
1. Sewing;

2. Assembly of component pieces into the completed article.

3. PVC piping, polypropylene webbing, buckles, metal bars, rubber bands, polyethylene board, PVC sponge, labels and thread are sourced;

Herein follows a list of the respective cost breakdowns involved in the manufacture of the seven styles of soft-sided luggage and carrying cases:

Percentage of Cost Incurred per Dozen Units

#4350 TAIWAN 45.8% PRC 54.2%

#4385 TAIWAN 49.9% PRC 50.1%

#4420 TAIWAN 40.5% PRC 59.5%

#4308 TAIWAN 46.4% PRC 53.6%

#4220 TAIWAN 63.5% PRC 36.5%

#4433 TAIWAN 51.6% PRC 48.4%

#4520 TAIWAN 51.0% PRC 49.0%

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. We note, however, that Customs has long held that the mere assembly of goods entailing simple combining operations (i.e., trimming or
joining together by sewing) does not constitute a substantial assembly. 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 the People's Republic of China, which involves the sewing together of components cut from fabric in Taiwan, does not involve sufficient skill or complexity to constitute a substantial assembly 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. See also HRL 956634, dated September 29, 1994. Therefore, the country of origin of all seven cases is the country where the articles last undergo a substantial transformation: Taiwan. It is in Taiwan that the articles last undergo a substantial manufacturing process (cutting) which transforms fabric into a new and different articles of commerce (components for soft-sided luggage and carrying cases).

HOLDING:

The country of origin of style numbers 4350, 4385, 4420, 4308, 4220, 4433 and 4520 is Taiwan.

Be advised, however, that on December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Section 334 (60 FR 46188).

Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21. Paragraph (c)(1) states that "[T]he country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable.

Paragraph (c)(2) provides:

"[W]here the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section."

Paragraph (e), in pertinent part, states that the country, territory or insular possession in which occurs "[A] change to subheading[s] 4202.12.40 through 4202.12.80 [or] 4202.92.15 through 4202.92.30 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession," will be the country of origin for the textile articles. The subject cases are classifiable either under subheadings 4202.12.8030 or 4202.92.3030, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Subheading 4202.12.8030, HTSUSA, provides for, in pertinent part, "[A]ttache cases, briefcases, school satchels, occupational luggage cases and similar containers: other: of man-made fibers." Subheading 4202.92.3030, HTSUSA, provides for, in pertinent part, "[T]ravel, sports and similar bags: with outer surface of textile materials: other... other: of man-made fibers: other." Both classifications are currently subject to a quota/visa category. The cut fabric pieces imported from Taiwan are classifiable in a heading other than 4202, HTSUSA and the cases have been wholly assembled in China. Accordingly, based on the facts stated above, effective July 1, 1996, the country of origin of all seven of the subject articles will be the People's Republic of China and they will have to be labeled as such.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division


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