CLA-2 CO:R:C:T 088321 HP
Mr. Richard J. Wallace
International Marketing
Wiseknit Group of Companies
639 Homewood Avenue
Highland Park, IL 60035
RE: Country of origin of diapers. Mere cutting of fabric
into squares is not a substantial transformation.
Dear Mr. Wallace:
This is in reply to your letter of November 12, 1990,
concerning the country of origin determination of diapers
produced in either China or Jamaica, for quota/visa purposes.
FACTS:
The merchandise at issue consists of 100% cotton cloth
diapers, your style JD #12. You describe the manufacturing
processes as follows:
1. People's Republic of China
a. Fabric construction 21s x 21s 76 x 38 thread
count per square inch, woven cloth, 1 ounces
per diaper (12 diapers to a package = 18 oz)
b. Cost
i. Fabric: $0.206/yard
ii. 9 yards used per dozen diapers = $1.85
total P.R.C.
2. Jamaica
a. Usage for infant boys and girls
b. Size: 27" x 27" flat diaper
i. Lines of demarcation inserted in
Jamaica
c. Eight stitches per inch
d. Cost
i. Thread: $0.12 per dozen
ii. Printed polybag in 6 colors: $0.06
iii. Inner packing boxes: $0.10 per dozen
iv. Export carton: $0.15 per dozen
v. Packing bans: $0.03 per dozen
vi. Labor: $0.92
(1) receiving fabric
(2) inspecting fabric
(3) cutting fabric
(4) sewing fabric
(5) pressing
(6) stamping "Made in Jamaica"
(7) folding
(8) packing 12 per polybag
vii. Administrative factory overhead,
interest & inland freight: $0.26 per
dozen
viii. Marketing and communication: $0.38
ix. Ocean freight to US: $0.10
ISSUE:
Whether the cutting and sewing of Chinese fabric in
Jamaica constitutes a substantial manufacturing operation such
that the merchandise is deemed to have been substantially
transformed pursuant to 19 C.F.R. 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, the fabric is merely cut into squares and
the edges hemmed. Consequently, it is our opinion that the
operations to which the fabric is subjected are insufficient
to constitute a substantial manufacturing process under 19
C.F.R. 12.130. See HRL 087950 of January 9, 1991.
HOLDING:
As a result of the foregoing, the cutting and sewing
operations performed in Jamaica do not constitute a
substantial transformation as required by 19 C.F.R. 12.130.
The country of origin of the instant merchandise is the
People's Republic of China.
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 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 section 177.2, CUSTOMS
REGULATIONS (19 C.F.R. 177.2).
Sincerely,
John Durant, Director
Commercial Rulings Division