HQ 959501 - Country of origin of woven cotton fabric; Section 102.21(c)(2), Customs Regulations; Section 12.130(c) - United States International Trade Commision Rulings

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HQ 959501

August 9, 1996

CLA-2 RR:TC:TE 959501 CAB

CATEGORY: CLASSIFICATION

Mr. Ryden Richardson, Jr.
Carmichael International Service
533 Glendale Boulevard
Los Angeles, CA 90026-5097

RE: Country of origin of woven cotton fabric; Section 102.21(c)(2), Customs Regulations; Section 12.130(c)

Dear Mr. Richardson:

This is in response to your inquiry of March 4, 1996, requesting a country of origin determination for woven cotton fabric pursuant to Section 102.21, Customs Regulations. There were no samples provided for examination.

FACTS:

Cotton fabric is woven in the United States and exported in the greige state to Japan or South Korea. In either South Korea or Japan, the greige fabric is subject to further processing in twelve different combinations. These combinations are as follows:

1. Scour and dye
2. Scour and print
3. Scour, dye and print
4. Scour, bleach and dye
5. Scour, bleach, dye and print
6. Scour, mercerize, sanforize and dye
7. Scour, bleach and print
8. Scour, bleach, mercerize, sanforize and print 9. Scour, mercerize, sanforize and print
10. Scour, mercerize, sanforize, dye and print 11. Scour, bleach, mercerize, sanforize and dye 12. Scour, bleach, mercerize, sanforize, dye and print

Following the above processing, the fabric will be returned as piece goods to the United States.

ISSUE:

What is the country of origin of the subject fabric?

LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act (codified at 19 USC Section 3592), new rules of origin were effective for textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product in which the good is wholly obtained or produced in a single country, territory, or insular possession. As the subject fabric is not wholly obtained or produced in a single country, territory, or insular possession, Section 102.21(c)(1) is inapplicable.

Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section. Section 102.21(c)(2) states:

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.

Section 102.21(e) states "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:"

5208-5212 A change to heading 5208 through 5212 from any heading outside that group provided the change is the result of a fabric-making process.

As the fabric is not wholly obtained or produced in a single country, we must apply Section 102.21(c)(2) and the applicable requirement of Section 102.21(e) to the proposed scenario to determine the country of origin of the subject fabric. In this instance, the fabric is woven in the United States and it is then transported to South Korea or Japan where it is subject to various manufacturing operations in twelve different combinations. The fabric is classifiable in Heading 5208, HTSUSA. Pursuant to the applicable provisions of Section 102.21(e), the country of origin of the fabric is the United States, the country where the fabric was formed by a fabric-making process.

However, there is an exception for products from the United States that are sent abroad for processing. Section 12.130(c), Customs Regulations, provides that any product of the United States which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article. In this case, fabric woven in the United States is exported in its greige state to Japan or South Korea where it is subject to multiple processing operations that result in the fabric being improved in condition and advanced in value.

Section 12.130 which remains in effect was originally intended to be used to determine the country of origin of textiles and textile products for quota/visa requirements. In Treasury Decision ("T.D.") 90-17, issued February 23, 1990, Customs announced a change in practice and position. This change resulted in Customs using Section 12.130 for quota, duty, and marking purposes when making country of origin determinations for textile goods. Therefore, in accordance with T.D. 90-17 and Section 12.130(c), the country of origin of the subject fabric for quota, marking, and duty purposes is Japan or South Korea, the country where the additional processing occurs.

With respect to your request as to advice on the country of origin labeling requirements for the subject merchandise, Customs recently ruled in Headquarters Ruling Letter (HRL) 559625, dated January 19, 1996, that the origin rules set forth in 19 USC Section 3592 govern the labeling requirements of textile and apparel products for purposes of the country of origin marking requirements of 19 USC 1304. Also as noted above, Section 12.130(c) is still considered to be applicable for quota, marking, and duty purposes. As a result, the country of origin for the subject fabric is Japan or South Korea and it must be so marked pursuant to 19 USC 1304. However, it is important to note that the holding in HRL 559625 is currently under review regarding the manner and specificity of the marking requirements.

You also inquire about the documentation required at entry. You ask the following:

1. Will entry require presentation in the entry summary of a textile visa issued by the government of the country where processing, as outlined in 1 through 12 above, has occurred?

Entry will require a textile visa from the country of origin, in this instance, either, South Korea or Japan in the entry summary.

2. What country of origin should be identified in the label attached to the returning piece goods, U.S.A. or the country wherein processing occurred?

As stated above, pursuant to 19 USC 1304, the country of origin of the subject fabric is South Korea or Japan and the fabric may be marked "Made in South Korea" or "Made in Japan".

3. Other than a visa, will entry documents other than a commercial invoice and packing list be required, e.g., a country of origin declaration, as described in 19 CFR 12.130(f)?

In accordance with 19 CFR 12.130(f), as the subject fabric is an imported textile subject to section 204 Agricultural Act of 1956, as amended, it should be accompanied by the appropriate declaration(s) set forth in paragraph (f)(1) or (f)(2) of Section 12.130, including a country of origin declaration.

HOLDING:

The country of origin of the subject fabric is Japan or South Korea.

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
Tariff Classification Appeals

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