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HQ 956204

July 26, 1994

CLA-2 CO:R:C:T 956204 CAB


Margaret Polito, Esq.
Neville, Peterson & Williams
80 Broad Street
Suite 3400
New York, NY 10004

RE: Country of origin of a flat sheet; Section 12.130, Customs Regulations

Dear Ms. Polito:

This is in response to your inquiry of April 6, 1994, requesting a country of origin determination for flat sheets on behalf of Natural Feather & Textiles, Inc. A sample was submitted for examination.


The merchandise in question is a flat sheet constructed of 100 percent cotton sateen material. The material is woven, dyed, and finished in China. The rolled fabric is then transported to Hong Kong where two separate pieces are cut to length and width. A separate top hem piece is folded in half and then attached to a larger piece of fabric. After the top hem has been attached to the body of the fabric, the bottom hem is completed and then the two side hems are sewn to complete the flat sheet.


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


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; and,

(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.

When making a determination as to whether fabric used to make sheets has been substantially transformed, the minimum processing required is cutting the fabric to length and width (four sides). After the fabric has been cut on four sides, Customs assesses the additional processing and makes a determination as to whether the additional processing coupled with cutting, amounts to a substantial manufacturing operation.

In prior cases, Customs has evaluated the degree of skill, value, and amount of time expended to manufacture sheets and made substantial transformation determinations accordingly. In Headquarters Ruling Letter (HRL) 952909, dated April 12, 1993, Customs determined that fabric that had been cut to length and width, coupled with the additional processing required to attach piping to flat sheets, amounted to a substantial manufacturing operation. In HRL 952225, dated December 8, 1992, Customs determined that the flat sheet processing operation in Thailand which included cutting fabric to length and width, hemming, and adorning with either piping or ruffles was sufficiently complex so as to amount to a substantial transformation in Thailand.

In your submission, you state that fabric is manufactured in China, cut to length and width, and hemmed in Hong Kong. In addition, a separate piece is cut, folded over, and then sewn onto the top edge of the sheet, so that regardless of the way in which the sheet is laid on the bed, the face side of the hem will be visible when the sheet is folded. The issue is whether the processing in Hong Kong is substantially complex so as to constitute a substantial manufacturing operation within the purview of Section 12.130(d). See HRL 953378, dated February 19, 1993, where Customs examined the manufacturing process involved in adding capping and piping to a flat sheet. Customs explained that the processing required to add capping and piping to a flat sheet involves sewing a band of fabric to finish the sheet's top edge, forming a seam. The side edges of the band are sewn to the sheet's edges. Finally, capping or piping is sewn along the top edge of the seam. In this case, the top band of fabric is attached to the flat sheet by folding it over and sewing it to the sheet. This processing appears to be a substantially complex manufacturing operation that is similar in difficulty to the cited scenarios. Therefore, in accordance with prior Customs rulings, the country of origin of the subject flat sheet is the country where the last substantial manufacturing operation occurred, Hong Kong.


The country of origin of the flat sheet at issue is Hong Kong.

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Your attention is directed to the Notice of Proposed Rule Making which the Customs Service published in the Federal Register on Monday, January 3, 1994 (59 FR 141). That notice proposed objective rules for determining the country of origin of goods imported into the United States. Although, the notice stated that the proposed rules were intended to codify our present origin rules, there are a few areas where the proposed rules are not consistent with Customs present position. The transaction described in this ruling is one of those instances. Accordingly, you should be aware that if the proposed rules are adopted as published, this ruling will no longer be valid and a different result may apply.


John Durant, Director

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