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HQ 959979



January 16, 1997

CLA-2 RR:TC:TE 959979 CAB

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.3030

Maphra P. Wilson
American Accessories International, L.L.C. 901 E. Summitt Hill Drive, Suite 302
Knoxville, TN 37915-1200

RE: Country of origin of a duffel bag; Section 102.21(c)(4)

Dear Ms. Wilson:

This is in response to your inquiry of November 12, 1996, requesting a country of origin and tariff classification determination for a bag. A sample of the bag at issue was submitted for examination and will be returned to you under separate cover.

FACTS:

The merchandise at issue is described as a duffel bag measuring thirty inches in length and fourteen inches in diameter. The bag is constructed of 1200 denier woven polyester material with a polyvinyl chloride backing, contains a drawstring and zippered means of closure, a polyester handle, a strap partially comprised of webbing material and woven polyester material, an exterior pocket, an overlapping flap with pocket, an insert pocket, a polyvinyl chloride bottom, and a plastic sheet of filler located inside the strap.

The polyester material is woven in China. All of the component pieces are sourced in China. The entire upper part of the bag which includes the polyester handle, strap, webbing, the zipper, overlapping flap with pocket, and the insert pocket are cut, constructed, and attached in China. The polyvinyl chloride bottom is cut in China. The assembled upper part of the bag and the bottom are shipped to the Philippines where the two components are attached forming the finished duffel bag. The bag then undergoes final finishing, inspection, and packing.

ISSUES:

I. What is the tariff classification of the subject bag in accordance with the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?

II. What is the country of origin of the subject bag?

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Agreements Act (codified at 19 USC Section 3592), new rules of origin were effective for textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996.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 is 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 when the good was wholly obtained or produced in a single country, territory, or insular possession. As the subject bag has not been wholly obtained or produced in a single country, territory, or insular possession, this section 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 Section 102.21(c)(1).

Section 102.21(c)(2) provides, in pertinent part:

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.

Heading 4202 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), provides for, inter alia, travel, sports and similar bags. The subject duffel bag fits within the purview of this heading.

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."

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.

The applicable tariff shift rule of heading 4202 requires the merchandise to be wholly assembled in a single country, territory, or insular possession. As the subject merchandise undergoes assembly operations in China and the Philippines, it is not wholly assembled in a single country, territory, or insular possession, thus, Section 102.21(c)(2) is not applicable.

Section 102.21(c)(3) provides for goods that have been wholly assembled (with certain enumerated exceptions) in a single country, insular possession, or territory, or which are knit to shape. Section 102.21(c)(3) is therefore, inapplicable to the subject merchandise as it has not been wholly assembled in a single country, insular possession, or territory, nor is it a knit to shape good.

Section 102.21(c)(4) provides the first multi-country rule. Section 102.21(c)(4), states the following:

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.

In the case of the subject merchandise, the most important assembly operation occurs in China. It is in China where the handle and strap are sewn onto the upper part of the bag, in addition to the attachment of the flap, and joining of the pockets. In the Philippines the completed upper portion of the bag is attached to the bottom portion of the bag. The assembly operations in the Philippines involves the joining of two components that have already been substantially constructed in China. Consequently, in accordance with Section 102.21(c)(4), the country of origin of the subject duffel bag is China, the country where the most important assembly operation occurred.

In your request, you refer to the definition of "wholly assembled" and assert that this definition is applicable to the subject duffel bag. You further contend that since assembly of the bag is performed in the Philippines and in accordance with the definition of "wholly assembled", the country of origin of the bag is the Phillippines.

There is a slight misunderstanding of the application of the definition of "wholly assembled" in your assertion. In Section 102.21(b)(6), the definition for wholly assembled is as follows:

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.

The aforementioned definition is applicable to articles that have been "wholly assembled" in a single country, territory, or insular possession. In this instance, the subject duffel bag undergoes assembly operations in two countries, therefore, the rule is not applicable. If Customs were to apply this definition to the instant merchandise, Customs would have to disregard the assembly operations performed in China, and as the assembly operations occurring in China are not minor attachments nor minor embellishments, Customs cannot disregard them when making a country of origin determination.

HOLDING:

The country of origin of the subject duffel bag is China.

Markings such as "Made in China", "China" or "Product of China" are acceptable as per the origin rules set forth in Section 102.21, Customs Regulations, and with the country of origin marking requirements in Part 134, Customs Regulations.

The duffel bag is classified in subheading 4202.92.3030, which is the provision for among other articles, travel, sports and similar bags, with outer surface of sheeting of plastic or of textile materials, other, other. The applicable rate of duty is 19.5 percent ad valorem and the textile restraint category is 670.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements.

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 ruling letter is issued on the assumption that all of the information f 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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