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HQ 959414

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August 6, 1996
CLA-2 RR:TC:TE 959414 jb

CATEGORY: CLASSIFICATION

Christopher L. Thayer, Esq.
Hallmark Cards, Incorporated
Kansas City, Missouri 64141

RE: Country of origin determination for hot pad, coasters, cardholder, wall hanging, and tote bag; 19 CFR assembly

Dear Mr. Thayer:

This is in reply to your letter dated June 26, 1996, requesting a country of origin determination for certain "Holiday" items, namely, what you refer to as a Thanksgiving hot pad, Thanksgiving coasters, Christmas cardholder, Christmas wall hanging, and Halloween tote bag. Samples were submitted to this office for examination.

FACTS:

The submitted merchandise consists of five items. The first item, referenced style 595THD1741, is a hot pad in the shape of a maple leaf, made out of 100 percent cotton fabric and stuffed with 100 percent polyester wadding. The base of the maple leaf features a self-fabric loop, attached by a single button, by which the hot pad may be hung. The manufacturing operations are as follows:

Scenario I

CHINA

- 100 percent cotton checked and plaid fabric for front and back panel is woven and dyed;
- button is sourced.

PHILIPPINES

- polyester wadding is formed;
- cutting of the fabric;
- threads are sourced;
- embroidery;
- sewing;
- trimming and cleaning.

Scenario II

CHINA

- 100 percent cotton checked and plaid fabric for front panel is woven and dyed;
- button is sourced.

COUNTRY X

- 100 percent cotton checked and plaid fabric for back panel is woven and dyed.

PHILIPPINES

- polyester wadding is formed;
- cutting of the fabric;
- threads are sourced;
- embroidery;
- sewing;
- trimming and cleaning.

The second item, referenced style 995THD1764, consists of a set of four coasters, made out of 100 percent cotton printed fabric and 55 percent/ 45 percent linen/cotton fabric, each stuffed with 100 percent polyester wadding. The face of each coaster is divided into four squares with each square featuring a different picture. The manufacturing operations are as follows:

Scenario I

CHINA

- 100 percent cotton printed fabric for front and back panel is woven and dyed;
- 55 percent/ 45 percent linen/cotton fabric for front panel is woven.

PHILIPPINES

- polyester wadding is formed;
- cord is sourced;
- cutting of the fabric;
- silk-screen printing of 55 percent/45 percent linen/cotton fabric;

- threads are formed;
- sewing;
- trimming and cleaning.
Scenario II

CHINA

- 100 percent cotton printed fabric for front panel is woven and dyed;
- 55 percent cotton/ 45 percent linen/cotton fabric for front panel is woven.

COUNTRY X

- 100 percent cotton printed fabric for back panel is woven and dyed.

PHILIPPINES

- polyester wadding is formed;
- cord is sourced;
- threads are formed;
- silk-screen printing of 55 percent/45 percent linen/cotton fabric;
- cutting of the fabric;
- sewing;
- trimming and cleaning.

The third item, referenced style 1495XBH3924, is a cardholder made out of 100 percent cotton checked and plaid fabric, 55 percent/ 45 percent linen/cotton fabric, and 100 percent acrylic felt. This item measures approximately 36 inches by 8-1/2 inches and features a wooden dowel and ribbon hanger, the words "warm thoughts happy memories" embroidered at the top, and three pocket inserts where the cards are to be placed. The manufacturing operations are as follows:

Scenario I

CHINA

- 100 percent cotton checked and plaid fabric for the front and back panel borders and pocket cuffs on the front panel is woven and dyed;
- 55 percent/ 45 percent linen/cotton fabric for front panel applique is woven;
- ribbon is woven and dyed;
- button is sourced.

TAIWAN

- 100 acrylic felt for front and back panel is formed and dyed;
- ribbon hanger is woven and dyed.

PHILIPPINES

- wooden dowel is sourced;
- cutting of the fabric;
- embroidery;
- threads are formed;
- sewing;
- trimming and cleaning.

Scenario II

CHINA

- 100 percent cotton checked and plaid fabric for the front and back panel borders and pocket cuffs on the front panel is woven and dyed;
- 55 percent/ 45 percent linen/cotton fabric for front panel applique is woven;
- ribbon is woven and dyed;
- button is sourced;

TAIWAN

- 100 percent acrylic for front and back panel is formed and dyed;
- ribbon hanger is woven and dyed.

COUNTRY X

- 100 percent cotton checked and plaid fabric for felt backing on back panel is formed.

PHILIPPINES

- wooden dowel is sourced;
- cutting of the fabric;
- embroidery;
- threads are formed;
- sewing;
- trimming and cleaning.

*We assume that the total weight of the 100 percent cotton checked and plaid fabric used for the borders and cuffs, the 55 percent/ 45 percent linen/cotton fabric used for the applique and the 100 percent cotton ribbon, accounts for more than seven percent of the total weight of the good.

The fourth item, referenced style 1295XBH3931, is a wall hanging made out of 100 percent cotton checked and plaid fabric, 100 percent cotton printed fabric, 55 percent/ 45 percent linen/cotton fabric, and 100 percent acrylic felt. This item measures approximately 12 inches by 10 inches and features a wooden dowel and ribbon hanger, and the words "Christmas is... memories... joy... family... love... friends" wrapping around the face of the item in a picture frame effect. The manufacturing operations are as follows:

CHINA

- 100 percent cotton checked and plaid fabric for front and back panel is woven and dyed;
- 100 percent cotton printed fabric for front panel is woven, dyed and printed;
- 55 percent/ 45 percent linen/cotton fabric for front panel is woven;
- button is sourced.

TAIWAN

- 100 percent acrylic felt for front panel is formed and dyed;
- ribbon hanger is woven and dyed.

PHILIPPINES

- wadding is formed;
- button is attached;
- wooden dowel is sourced;
- wooden star is sourced;
- cutting of the fabric;
- threads are formed;
- embroidery;
- sewing;
- trimming and cleaning.

The final item, referenced style 595HJR1601, is a tote bag made out of 100 percent cotton fabric. This item features the face of a pumpkin on the front panel, a handle made out of nylon webbing, and a maple leaf and ribbon at the base of one of the sides of the handles. The manufacturing operations are as follows:

CHINA

- 100 percent cotton fabric for front and back panel is woven and dyed.

HONG KONG

- 100 percent nylon webbing for handle is woven.

PHILIPPINES

- 65 percent/ 35 percent polyester/cotton fabric for leaf applique is woven and dyed;
- 100 percent nylon ribbon is woven and dyed; - cutting of the fabric;
- silk-screen printing;
- threads are formed;
- sewing;
- trimming and cleaning.

ISSUE:

1. What is the country of origin of the subject merchandise?

2. Is the wadding present in some of these items considered fabric?

3. Do the cotton fabric applique and cotton checked plaid fabric featured on the cardholder qualify as De Minimis?

4. Are the nylon webbing, leaf applique and ribbon featured on the tote bag, considered minor attachments and minor embellishments?

5. If a visa from China is required for any of these items, are there any entities within China or the Philippines to address for obtaining a Chinese visa for products shipped from the Philippines?

LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) 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 "The 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) states that "Where 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) states that "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:"

6301-6306 The country of origin of a good classifiable under heading 6301 through
6306 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

4202.92.15-4202.92.30 A change to subheading 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.

Paragraph (b)(6) defines "wholly assembled" as:

The term "wholly assembled" when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as "wholly assembled" in a single country, territory, or insular possession.

General rule (c) of Part 102.21 states that "Subject to paragraph (d) of this section, the country of origin of a textile or apparel product shall be determined by sequential application of paragraphs (c)(1) through (c)(5) of this section and, in each case where appropriate to the specific context, by application of the additional requirements or conditions of ??102.12 through 102.19 of this part." Section 102.13, which sets out the De Minimis rule states, in relevant part:

(c) Foreign components or materials that do not undergo the applicable change in tariff classification set out in product covered by that section shall be disregarded in determining the country of origin of the good if the total weight of those components or materials is not more than 7 percent of the total weight of the good.

As you correctly stated in your letter, all of the subject merchandise, except for the tote bag, is classifiable as other furnishing articles in subheading 6304.92.0000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as other furnishing articles, excluding those of heading 9404: other: not knitted or crocheted, of cotton. The tote bag is classifiable in subheading 4202.92.1500, HTSUSA, which provides for, among other things, travel, sports and similar bags: with outer surface of textile materials: of vegetable fibers and not of pile or tufted construction: of cotton.

As the analysis for this merchandise will show, the wadding present in some of the subject merchandise, i.e., the hot pad, coasters and wall hanging, is considered fabric. In the case of the hot pad in scenario I, fabric is formed both in China (100 percent cotton checked and plaid fabric) and the Philippines (wadding). As the fabric comprising the good is formed by a fabric-making process in more than one country, this merchandise does not meet the terms of the tariff shift set out in Section 102.21(e). In scenario II, the fabric is formed in China (100 percent cotton checked and plaid fabric for front panel), Country X (100 percent cotton checked and plaid fabric for back panel) and the Philippines (wadding). Accordingly, this also does not meet the terms of the tariff shift.

In the case of the coasters in scenario I, fabric is formed in both China (100 percent cotton printed fabric and 55 percent/45 percent cotton/linen fabric) and the Philippines (wadding). As the fabric comprising the good is formed by a fabric-making process in more than one country, this merchandise does not meet the terms of the tariff shift. In scenario II, the fabric is formed in China (100 percent cotton printed fabric for the front panel and 55 percent/ 45 percent cotton/ linen fabric), Country X (100 percent cotton printed fabric for the back panel) and the Philippines (wadding). Accordingly, this also does not meet the terms of the tariff shift.

In the case of the cardholder in scenario I, fabric is formed in China (100 percent cotton checked and plaid fabric for front and back panel borders, 55 percent/ 45 percent linen/cotton fabric for the front panel applique and 100 percent cotton ribbon) and Taiwan (felt and ribbon hanger). We assume that the material formed in China weighs more than seven percent of the total weight of the good and thus does not qualify as De Minimis. As the fabric comprising the good is formed by a fabric-making process in more than one country, this merchandise does not meet the terms of the tariff shift. Similarly, in scenario II, the fabric is formed in China ( 100 percent cotton checked and plaid fabric for the front panel border, 55 percent/ 45 percent linen/ cotton fabric for the front panel applique and 100 percent cotton ribbon), Country X ( 100 percent cotton fabric for the back panel border) and Taiwan (felt and ribbon hanger). Accordingly, this also does not meet the terms of the tariff shift.

In the case of the wall hanging fabric is formed in China (100 percent cotton checked and plaid fabric for the front and back panel, 100 percent cotton printed fabric for the front panel and 55 percent/ 45 percent linen/cotton fabric for the front panel), Taiwan (felt and ribbon hanger) and the Philippines (wadding). As the fabric comprising the good is formed by a fabric-making process in more than one country, this merchandise does not meet the terms of the tariff shift.

In the case of the tote bag the nylon webbing, cotton leaf applique and nylon ribbon are considered minor attachments and minor embellishments as per the terms of the definition of "wholly assembled". As the tote bag is "wholly assembled" in a single country, the tote bag meets the terms of the tariff shift. Accordingly, the country of origin of the subject tote bag is the Philippines.

Thus, having determined the country of origin of the tote bag, country of origin must still be determined for the remaining merchandise, that is, the hot pad, coasters, cardholder and wall hanging. Paragraph (c)(3) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section":

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is not knit and heading 6304 is excepted by provision (ii), paragraph (c)(3) is inapplicable.

Paragraph (c)(4) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred. It is the opinion of this office that in the case of the hot pad, coasters, cardholder and wall hanging, the most important manufacturing process occurs at the time of the fabric-making. As the fabric-making process occurs in more than one country in the case of these items, and, in the case of these goods, no one fabric is more important than the other, country of origin cannot be readily determined based on paragraph (c)(4).

Paragraph (c)(5) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory, or insular possession in which an important assembly or manufacturing process occurred. In the case of the subject hot pad, coasters, cardholder and wall hanging, country of origin is conferred by the last country in which an important assembly occurred, that is, the Philippines.

Although in the case of all of the submitted merchandise country of origin is not conferred by China, in the case of any problems incurred when interacting with foreign governments in terms of visa or otherwise, those problems must be resolved by the exporter of the goods with the appropriate foreign government embassy.

HOLDING:

The country of origin of the subject hot pad, referenced style 595THD1741, coasters, referenced style 995THD1764, cardholder, referenced style 1495XBH3924, wall hanging, referenced style 1295XBH3931, and tote bag, referenced style 595HJR1601 is the Philippines.

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 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, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

Sincerely,

John Durant, Director

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See also:

• Tariff No.: 4202.92.15 - Travel, sports and similar bags with outer surface of cotton, not of pile or tufted construction
• Tariff No.: 4202.92.30 - Travel, sports and similar bags with outer surface of textile materials other than of vegetable fibers
• Tariff No.: 6209.20.50 - Babies' garments & clothing acc. nesoi, of cotton, incl. sunsuits & sim app, sets & parts of sets, & diapers, not knitted or crocheted
• Tariff No.: 6304.92.00 - Furnishing articles (excluding those of heading 9404 and other than bedspreads) not knitted or crocheted, of cotton