CLA-2 CO:R:C:G 087949 CRS
Mr. Bryce Haynes
Executive Vice President
The Bibb Company
P.O. Box 4207
Macon, GA 31208
RE: Country of origin of diapers; cutting and sewing constitute
substantial transformation.
Dear Mr. Haynes:
This is in reply to your letter dated September 6, 1990, in
which you requested a ruling concerning the country of origin of
cotton diapers.
FACTS:
The merchandise in question consists of a 100 percent cotton
pre-folded birdseye diaper measuring 14 inches by 20 inches. The
fabric is made and bleach finished in the People's Republic of
China (PRC). From the PRC the fabric is shipped in 300-400 yard
rolls to Thailand where the fabric, which has no lines of
demarcation, is cut and sewn into individual diapers.
With regard to the manufacture of the prefolded diapers in
Thailand you have provided the following information:
A. The fabric is run approximately 36" wide. The roll is
positioned behind a machine that will continuously
prefold the fabric to the 14" configuration. As the
fabric leaves the prefolder it is guided to a double
head chain stitch sewing machine which stitches the
fabric in the warp direction. The two (2) stitch lines
are approximately 4" apart.
B. The next operation is the cutting. This operation is
similar to the previous cutting operation. The 14"
width prefolded fabric is spread on a table. It is
then marked every 21 inches. Then with an electric
knife the fabric is cut into 21 inch lengths. At this
point, the diapers are about 14" by 21".
C. From the cutting operation, the stacks of diapers are
sent to a second sewing operation where they are surged
at the two raw cut edges to close the ends.
D. From surging, the diapers are inspected and placed into
stacks of one dozen and then folded to approximately 7"
x 9". These stacks are then placed in poly bags. The
bags are sealed at the end....
The finished diapers are shipped to the United States through
the port of Savannah.
ISSUE:
Whether cutting and sewing of Chinese fabric in Thailand
constitute a substantial manufacturing operation such that the
merchandise is deemed to have been substantially transformed
pursuant to 19 CFR 12.130.
LAW AND ANALYSIS:
Pursuant to section 12.130, Customs Regulations (19 CFR
12.130), a textile or textile product which consists of materials
produced or derived from, or processed in, more than one foreign
territory or country shall be a product of that foreign territory
or country where it last underwent a substantial transformation.
A textile or 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) establishes criteria for determining
whether an article has been substantially transformed. However,
the criteria set forth in 19 CFR 12.130(d) are not exhaustive;
one or any combination of these criteria may be determinative and
additional factors may be considered.
According to 19 CFR 12.130(d)(2), the following factors are
to be considered in determining whether merchandise has been
subjected to substantial manufacturing or processing operations:
the physical change in the material or article, the time involved
in the manufacturing or processing operations, the complexity of
the operations, the level or degree of skill and/or technology
required, and the value added to the article.
Nevertheless, section 12.130(e)(2) provides that an article
will usually not be considered to be a product of a particular
country merely by having undergone:
(ii) Cutting to length or width and hemming or overlocking
fabrics which are readily identifiable as being intended for
a particular commercial use....
In this case, when the cotton fabric exported from China it
is not identifiable as being intended for use as diapers. As we
stated in Headquarters Ruling Letter (HRL) 086779 dated April 25,
1990:
Upon exportation...the merchandise is mere cotton fabric,
suitable for multiple uses. There is no evidence, i.e.,
lines of demarcation, that...the fabric is meant to be
diapers.
Moreover, in Thailand, the fabric is prefolded and stitch sewn
into the 14 width configuration, cut to length, and then sent to
a second sewing operation where the raw cut edges are closed.
Based on the foregoing, Customs' is of the view that the above
constitute substantial manufacturing or processing operations
under 19 CFR 12.130(e)(1). Consequently, Customs' considers the
fabric has been substantially transformed pursuant to 19 CFR
12.130.
HOLDING:
The cutting and sewing operations performed in Thailand
constitute a substantial transformation as required by 19 CFR
12.130. The country of origin of the instant merchandise is
Thailand.
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 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. In such a case, 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