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HQ 951899

October 31, 1992

CLA-2 CO:R:C:T 951899 SK


Kevin J. Downey
Sullivan & Lynch, P.C.
156 State Street
Boston, MA 02109

RE: Country of Origin of tote bags and luggage of nylon and rayon; 19 CFR 12.130; fabric manufactured and cut in Taiwan; components stitched together in China; mere assembly is not substantial transformation.

Dear Mr. Downey:

This is in response to your letter of May 20, 1992, on behalf of your client, The Gem Group, Inc., requesting a country of origin determination for several different sizes and styles of synthetic fiber tote bags and luggage. Samples of each style of bag were submitted for our examination.


Eight samples were submitted to this office. The samples consist of both cut panels as they exist prior to final assembly as well as prototypes of the finished products. The articles are made from nylon and rayon.

The fabric used in the construction of these articles is manufactured in Taiwan. The fabric is also cut into panels in Taiwan for eventual assembly into the finished product in China.

The luggage panels are shipped unassembled to China. Included with these panels are zippers, grommets, piping, webbing, labels and packing materials. In China, the fabric panels are stitched together to form the luggage and tote bags. At this time zippers, piping and related accessories are also added.

Cost sheets were submitted for each style of bag under review. The cost incurred in Taiwan for materials and labor ranges from $1.09 to $2.50 per piece. The labor charge for
stitching and assembly of the bags in China ranges from $0.12 to $0.25 per piece. The packing charge incurred in China ranges from $0.03 to $0.05 per piece.


What is the country of origin of the subject merchandise?


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.

Customs has long held that the mere assembly of goods, entailing simple combining operations, trimming or joining together by sewing, is not enough to substantially transform the components of an article into a new and different article of commerce. 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 China involving the sewing together of components cut from fabric in Taiwan does not involve sufficient skill or complexity to constitute a substantial transformation as defined by the regulations set forth supra.

Moreover, pursuant to 19 CFR 12.130(d)(2)(v), the "value added" to an article is yet another factor which aids in determining country of origin. The greatest cost in producing the articles at issue is incurred in Taiwan, as that is where the fabric is manufactured. Accordingly, the country of origin of these articles is Taiwan as that is where the articles last underwent a substantial transformation and that is where the greatest value was added to the subject merchandise.


The country of origin of the subject merchandise is Taiwan.

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 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it subsequently be 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, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).


John Durant, Director
Commercial Rulings Division

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