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HQ 954454

August 18, 1993

CLA-2 CO:R:C:T 954454 HP


Mr. Ming Chun Wu
Minn Poe Industry Co., Ltd.
12, 205 Lane, Min Tsu St.
Hu Ne Village, Hu Nei Hsiang
Kaohsiung Hsien

RE: Country of origin of woven insulated lunch bag.

Dear Mr. Wu:

This is in reply to your letter of February 4, 1993. That letter concerned the country of origin of a insulated lunch bag.


The merchandise at issue consists of a woven insulated lunch bag, style number MP9303. The following table sets forth the manufacturing processes:

Factors Country A (Taiwan) Country B (China)

*Physical Change 1. Fabric woven in Article 2. Fabric cut into Pieces assembled into
8 pieces, including finished product. front & back panels, pockets.

*Time Expended 1. 1 min/yd for 15 minutes/piece (per unit) weaving fabric.
2. 2 min/pc cutting
3. 0.5 min printing
4. 0.8 min pressing
5. 3 min inspection, folding & ironing
6. 3 min packing *Complexity1. WeavingAssembly by sewing
2. Cutting into components
3. Printing
4. Pressing
5. Inspection
& Folding
6. Packing

*Skill or 1. 8-10 skilled workers 1. 1-3 skilled workers technology 2. Weaving/dying machine 2. Sewing machines
3. Computer marker packing machine & plotter machine
4. Cutting machine
5. Printing machine
6. Ironing machine
7. Packaging machine

*Value Added 1. 70 cents/pc after weaving 1. 20 cents/pc after
2. 11 cents/pc after cutting assembly
3. 6 cents/pc after printing
4. 8 cents/pc after pressing and packaging
5. 28 cents/pc after accessory


What is the country of origin of the insulated lunch bag for quota/visa purposes?


Textile commodities produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that:

. . . a textile product . . . which consists of materials produced or derived from, or processed in, more than one foreign . . . country shall be a product of that foreign . . . country where it last underwent a substantial transformation.

12.130(b). A textile product undergoes a substantial transformation when it is ". . . transformed by means of substantial manufacturing or processing operations into a new and different article of commerce." Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regulations is considered in determining whether a textile product has undergone substantial manufacturing or processing operations, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determinative, and additional factors may be considered." In determining whether merchandise has undergone substantial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country.

Customs has repeatedly held that the cutting of fabric into specific patterns and shapes suitable for use in an assembly operation constitutes a substantial transformation. See HRL 555189 of June 12, 1989; HRL 554027 of January 13, 1987; HRL 554025 of December 16, 1986. Therefore, we find that the materials which will be used to create the insulated lunch bag will become new and different articles of commerce as a result of the operations performed in Taiwan (Country A). The assembly operations performed in China, however, do not constitute a substantial transformation of the pre-cut components. Customs has long held that the mere assembly of parts will not necessarily constitute a substantial transformation. C.S.D. 80- 111 (Sept. 24, 1980). See also HRL 087439 of October 30, 1990 (assembly of portfolio components insufficient to confer country of origin.

Taking the above rulings into consideration, it is apparent that the instant operations to be performed in China constitute simple assembly operations on pre-cut components which do not amount to a substantial transformation. Accordingly, the insulated lunch bags will be considered products of Taiwan.


As a result of the foregoing, the instant merchandise is considered a product of Taiwan.

The holding in this ruling applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in 177.9(b)(1), Customs Regulations (19 C.F.R. 177.9(b)(1)). This section states that a ruling letter is issued on the assumption that all of 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 C.F.R. 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. In such a case, it is recommended that a new ruling request be submitted in accordance with 177.2, Customs Regulations (19 C.F.R. 177.2).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


John Durant, Director
Commercial Rulings Division

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