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HQ 963433




May 2, 2000

CLA-2 RR:CR:TE 963433 jb

CATEGORY: CLASSIFICATION

Evelyn M. Suarez, Esq.
Arter & Hadden LLP
1801 K Street, N.W., Suite 400K
Washington, D.C. 20006-1301

RE: Country of origin determination for quilts

Dear Ms. Suarez:

This is in reply to your letter dated August 26, 1999, on behalf of your client, L. Kee & Co., Inc., requesting a country of origin determination for certain quilts. Samples and pictures of the merchandise at issue were submitted to this office for examination.

FACTS:

The submitted merchandise consists of three categories of quilts which you describe as:

Quilt No. E-2010
This category has patchwork and applique. The merchandise is a hand-stitched, three-layer quilt. The face fabric is made from multiple pieces of cotton or cotton blend (55 percent ramie/45 percent cotton). Approximately 212 pieces are sewn together to form a design. Lace applique is also sewn on the top or face of the quilt. The tops are manufactured in three sizes: (1) 71” x 89” (Twin); (2) 89” x 89” (Full/Queen); (3) 103” x 95” (King). The middle layer is an unbonded polyester fiberfill, which is manufactured in the United States. Depending on the quilt size, the back will consist of two or three pieces of woven cotton or cotton blend (55 percent ramie/45 percent cotton) fabric cut to length from the rolls.

Quilt No. 2059
This category of quilt has no patchwork at all but is characterized by a substantial amount of hand-quilt stitching. The merchandise is a hand-stitched, three-layer quilt. The face fabric represented by this category consists of two or three panels of the same printed cotton or cotton blend (55 percent ramie/45 percent cotton) fabric joined together to form one whole piece of fabric. The top panels are manufactured in the following three sizes: (1) 71” x 89” (Twin); (2) 89” x 89” (Full/Queen); (3) 103” x 95” (King). The middle layer is an unbonded polyester fiberfill, which is manufactured in the United States. Depending on the quilt size, the back will consist of two or three pieces of woven cotton or cotton blend (55 percent ramie/45 percent cotton) fabric cut to length from the rolls.

Quilt No. E-934 and E-251
This category of quilt also has patchwork. However, this category differs from Quilt No. E-2010 in that it does not contain lace. The merchandise is a hand-stitched three layer quilt. The face fabric for Quilt No. E-934 is made from approximately 235 pieces of cotton or cotton blend (55 percent ramie/45 percent cotton) fabric sewn together to form a design. The face fabric for Quilt No. E-251 is made from approximately 1, 248 pieces of cotton or cotton blend (55 percent ramie/45 percent cotton). The top panels are manufactured in the following three sizes: (1) 71” x 89” (Twin); (2) 89” x 89” (Full/Queen); (3) 103” x 95” (King). The middle layer is an unbonded polyester fiberfill imported from the United States. Depending on the quilt size, the back will consist of two or three pieces of woven cotton or cotton blend (55 percent ramie/45 percent cotton) fabric cut to length from rolls.

The manufacturing operations for the subject merchandise are:

United States
Polyester batting fabric is made and shipped to Country B

Country A
Cotton or ramie/cotton blend fabrics are woven Lace appliques are made (style E-2010)
Fabrics are cut and sewn forming either a 2 or 3 section top panel or a patchwork top panel

Country B
Fabrics are cut and sewn forming the 2 or 3 section back panel Top and back panels are joined creating a shell Batting is cut to size, inserted into the shell and the shell is sewn closed Quilt design is marked and the item is hand quilted

It is your opinion that the complexity of operations occurring in Country B clearly establishes that the most important assembly or manufacturing process occurs in Country B. In support of this claim you make reference to Headquarters Ruling Letter (HQ) 955975, dated June 21, 1994, and HQ 956221, dated June 8, 1994, which held that the country of origin was the second country in virtually identical circumstances.

It is our understanding that any reference to “Country A” or “Country B” does not include Israel or a North American Free Trade Agreement (NAFTA) country.

ISSUE:

What is the country of origin of the subject merchandise?

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 of the 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”:

9404.90 The country of origin of a good classifiable under subheading 9404.90 is the country, territory, or insular possession in which the fabric comprising the good was formed by a fabric-making process.

The subject merchandise is classifiable in subheading 9404.90, HTSUSA. As the fabric-making process for the subject merchandise does not occur in a single country, paragraph (c)(2) is inapplicable.

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 to shape, and heading 9404.90, HTSUS, 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 belief of this office that in the case of the subject merchandise the most important manufacturing process occurs at the time of the formation of the outer shell fabric. It is the outer shell fabric which in essence, identifies the merchandise, and thus creates its saleability. Accordingly, the country of origin of the subject merchandise is the single country in which the outer shell fabric is formed, that is, Country A. Moreover, basing the country of origin determination on the fabric-making process carries out the clear intent of Section 334 as expressed in Section 334(b)(2) and Part 102.21(c)(3)(ii).

Although you state that no comparison should be made between the merchandise in this case and that of HQ 958798, dated April 29, 1996, we do not see how a comparison can be avoided. It is true that the merchandise in HQ 958798 involved a quilt with a large number of patches (924), however, it cannot be said that the subject quilts, some featuring patterns with 212, 235, or 1,248 pieces are not also significant.

Additionally, although you state that the time required to process the pieces into a face or top panel in Country A, is less than the time required to assemble this merchandise in Country B, this is a comparison that is neither useful nor appropriate in arriving at the correct country of origin for this merchandise. As we stated in Federal Register Notice, Vol. 60, No.171, in the discussion of comments for Multicountry rules:

Customs recognizes that the concern underlying the submitted comments revolves around the meaning of the word “important,” and, in fact, during the development of the proposed regulatory texts Customs decided to eschew use of definitions calling for comparisons of such criteria as time involved in processing, labor and other costs of processing, complexity, and value added. Customs views the word “important” as referring to the relative significance of the manufacturing or assembly processes involved in the production of a good; thus, the word “important,” has the same connotation as the word “meaningful.” Accordingly, in determining relative importance, a manufacturing operation in a low wage country is no less important to the production of a good than that same manufacturing operation in a high wage country, nor is a manufacturing operation done by an expensive machine more important than that same manufacturing operation done by hand.

Finally, we add that your reference to headquarters rulings addressing country of origin which were issued before the section 102.21 rules went into effect, although of interest, are of no significance to the appropriate country of origin determination for this merchandise.

Accordingly, we find that the correct country of origin for this merchandise, pursuant to section 102.21(c)(4), is Country A, the country in which the outershell fabric is formed.

HOLDING:

The country of origin of the subject merchandise is Country A and should be marked accordingly.

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 sections states that a 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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