HQ 0955438 - Country of origin for placemats, tablecloths, and napkins; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 955438

March 18, 1994

CLA-2 CO:R:C:T 955438 CAB

CATEGORY: CLASSIFICATION

Mr. Frank Wu
CGC Corporation
9F, Hon Yea Bldg.
31 Sect. 4 Jen Ai Rd.
Taipei, Taiwan, 10649

RE: Country of origin for placemats, tablecloths, and napkins; Section 12.130, Customs Regulations

Dear Mr. Wu:

This is in response to your inquiry of November 18, 1993, requesting a country of origin determination for placemats, tablecloths, and napkins. Samples were submitted for examination.

FACTS:

The merchandise in question, placemats, tablecloths, and napkins, are constructed of printed fabric manufactured in Taiwan. The fabric is 65 percent polyester and 35 percent cotton. The printed fabric is then exported to China where it is cut on all four sides either into a tablecloth, placemat, or napkin and the edges are hemmed. Because of the stiffness of the placement, Customs believes it was subject to a stiffening process in China.

An estimated costs list was included in the submission. The costs for the processing in China ranges from 13 percent to 23.6 percent while the costs incurred in Taiwan ranges from 76.4 percent to 87 percent.

ISSUE:

What is the country of origin for the merchandise in question?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1), Customs Regulations, states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity, (ii) Fundamental character or (iii) Commercial use.

Section 12.130(d)(2), Customs Regulations, states that for determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article

(ii) The time involved in the manufacturing or processing operation

(iii) The complexity of the manufacturing or processing operation

(iv) The level or degree of skill and/or technology required

(v) The value added to the article or material

Section 12.130(e)(1)(iv), Customs Regulations, states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts into the completed article has occurred in that country. However, 12.130(e)(2)(ii), Customs Regulations, states that a material will usually not be considered to be a product of a particular foreign country by virtue of merely having undergone cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use. T.D. 85-38, the final document rule establishing 19 CFR 12.130, states that where fabric which is readily identifiable as being intended for a particular commercial use (e.g., toweling, or bed linen material) is merely cut to length or width, with the edges then being either hemmed or overlocked, the foreign territory or country which produced the fabric is the country of origin and not the country where the fabric was cut.

Customs has applied the principles of 12.130, Customs Regulations, in prior cases. In Headquarters Ruling Letter (HRL) 083544, dated February 28, 1990, Customs ruled that material cut to both length and width, and hemmed to be made into kitchen towels and dishcloths in a second country was not substantially transformed because the processing operations performed in the second country were not substantial manufacturing or processing operations. In HRL 733250, dated August 10, 1990, Customs determined that greige fabric manufactured in China and then sent to Dubai where it was bleached, cut to length and width, and hemmed to create a cloth napkin had not undergone a substantial manufacturing operation in Dubai, and was therefore a product of China.

In this instance, the cutting and sewing operation is not a substantial manufacturing operation within the purview of Section 12.130(d)(2), Customs Regulations. The processing does not require much time, and the operations are not complex nor do they require a high degree of skill or technology. Moreover, approximately three-quarters of the manufacturing costs are incurred in Taiwan. Therefore, the subject merchandise is subject to its last substantial transformation in the country where the fabric is manufactured, Taiwan.

HOLDING:

The country of origin of the placemats, napkins, and tablecloths 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 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 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).

Sincerely,

John Durant, Director
Commercial Rulings Division

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