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HQ 958393



February 14, 1996
CLA-2 RR:TC:TE 958393 SK

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.3030

David A. Eisen
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd floor
New York, N.Y. 10036-8901

RE: Country of origin determination; 19 CFR 12.130; ladies' open tote bag: quilted man-made exterior; travel, sport and similar bags; 4202.92.3030; material components cut in Taiwan; assembly of pre-cut components in China; mere assembly is not substantial transformation; HRL's 951899 (10/31/92); 954225 (8/30/93); 956634 (9/29/94); 957700 (3/29/95); 958222 (7/28/95); Section 334 of the Uruguay Round; HRL 957794 (9/1/95).

Dear Mr. Eisen:

This is in response to your letter of August 31, 1995, in which you request a classification and country of origin determination on behalf of your client, Avon Products, Inc., for a ladies' open tote bag. This office was provided with a sample as well as a detailed description of the manufacturing processes performed on the subject merchandise in Taiwan and the People's Republic of China.

FACTS:

The merchandise at issue is described as a ladies' open tote bag, designed to contain personal effects and other related articles during travel. The bag measures approximately 16 inches by 16 inches and is constructed of a 100 percent nylon satin print exterior surface with diamond-shaped stitching and a polyvinyl chloride (PVC) plastic interior lining. The bag does not have any interior or exterior pockets or
compartments. The bag features a metal spring clasp, a decorative ornament affixed to the front top section and two carrying handles.

The merchandise will be manufactured of Taiwan origin textile fabric which is cut to both size and shape in Taiwan to form the components of the finished and complete tote bag. The PVC sheets and foam padding are also cut to size and shape in Taiwan and the metal spring clasp and packing materials are of Taiwanese origin. The costs incurred in Taiwan represent approximately 63% of the total value of each tote bag.

The cut to size and shape components are forwarded to China for assembly by means of simple sewing operations as well as routine finishing processes (sewing, decorative diamond-shaped stitching on exterior surface, piping, inspection, packing, etc.). The costs incurred in China represent approximately 37% of the total value of each tote bag.

ISSUES:

What is the proper classification of the tote bag?

What is the country of origin of the tote bag?

LAW AND ANALYSIS:
CLASSIFICATION

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI's). GRI 1 requires that classification be determined according to the terms of the chapter notes and, unless otherwise required, according to the remaining GRI's. Where goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI's may be applied, taken in order.

Heading 4202, HTSUSA, provides for various types of carrying cases and containers. Subheading 4202.92, HTSUSA, encompasses travel, sports and similar bags. The subject article is a ladies' open tote bag designed to carry various personal effects and related articles. In Headquarters Ruling Letter (HRL) 957974, dated September 1, 1995, this office held:

"Customs views tote bags, generally, as multipurpose bags which are used to carry any number of sundry items, such as food, clothes, shoes, etc... . See Headquarters Ruling Letter (HRL) 950708, dated December 24, 1991. ... Customs views these bags as similar to travel bags in that they are used to carry personal effects from place to place."

Accordingly, the subject tote bag is classifiable under subheading 4202.92.3030, HTSUSA, which provides for, inter alia, travel, sports and similar bags, with an outer surface of plastic or of textile materials.

COUNTRY OF ORIGIN

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. We note, however, that Customs has long held that the mere assembly of goods entailing simple combining operations (i.e., trimming or joining together by sewing) does not constitute a substantial assembly. 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, which involves the sewing together of components cut from fabric in Taiwan, does not involve sufficient skill or complexity to constitute a substantial assembly as defined by the regulations set forth supra. See HRL 951899, dated October 31, 1992, in which Customs issued a country of origin determination for soft-sided luggage. See also HRL 956634, dated September 29, 1994.

Therefore, the country of origin of the subject tote bag is the country where it last undergoes a substantial transformation: Taiwan. It is in Taiwan that the article last undergoes a substantial manufacturing process (cutting) which transforms fabric into a new and different article of commerce (components for a tote bag).

HOLDING:

The subject tote bag is classifiable under subheading 4202.92.3030, HTSUSA, which provides for, in pertinent part, "[T]ravel, sports and similar bags: with outer surface of textile materials: other... other: of man-made fibers: other," dutiable at a rate of 19.5 percent ad valorem. The textile quota category number is 670.

The country of origin of the ladies' tote bag is Taiwan.

Be advised, however, that on December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act 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 "[T]he 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) provides:

"[W]here 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 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), in pertinent part, states that the country, territory or insular possession in which occurs "[A] change to subheading 4202.92.15 through 4202.92.30 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession," will be the country of origin for the textile articles. The subject tote bag is classifiable under subheading 4202.92.3030, HTSUSA. The cut fabric and plastic pieces imported from Taiwan are classifiable in a heading other than 4202, HTSUSA, and the tote bag has been wholly assembled in China. Accordingly, based on the facts stated above, effective July 1, 1996, the country of origin of the subject tote bag will be the People's Republic of China and it will have to be labeled as such.

Sincerely,

John Durant, Director
Tariff Classification Appeals Division


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