CLA-2 CO:R:C:T 951899 SK
Kevin J. Downey
Sullivan & Lynch, P.C.
156 State Street
Boston, MA 02109
RE: Country of Origin of tote bags and luggage of nylon and
rayon; 19 CFR 12.130; fabric manufactured and cut in
Taiwan; components stitched together in China; mere
assembly is not substantial transformation.
Dear Mr. Downey:
This is in response to your letter of May 20, 1992, on
behalf of your client, The Gem Group, Inc., requesting a country
of origin determination for several different sizes and styles of
synthetic fiber tote bags and luggage. Samples of each style of
bag were submitted for our examination.
FACTS:
Eight samples were submitted to this office. The samples
consist of both cut panels as they exist prior to final assembly
as well as prototypes of the finished products. The articles are
made from nylon and rayon.
The fabric used in the construction of these articles is
manufactured in Taiwan. The fabric is also cut into panels in
Taiwan for eventual assembly into the finished product in China.
The luggage panels are shipped unassembled to China.
Included with these panels are zippers, grommets, piping,
webbing, labels and packing materials. In China, the fabric
panels are stitched together to form the luggage and tote bags.
At this time zippers, piping and related accessories are also
added.
Cost sheets were submitted for each style of bag under
review. The cost incurred in Taiwan for materials and labor
ranges from $1.09 to $2.50 per piece. The labor charge for
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stitching and assembly of the bags in China ranges from $0.12 to
$0.25 per piece. The packing charge incurred in China ranges
from $0.03 to $0.05 per piece.
ISSUE:
What is the country of origin of the subject merchandise?
LAW AND ANALYSIS:
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.
Customs has long held that the mere assembly of goods,
entailing simple combining operations, trimming or joining
together by sewing, is not enough to substantially transform the
components of an article into a new and different article of
commerce. 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 involving the sewing together of components cut
from fabric in Taiwan does not involve sufficient skill or
complexity to constitute a substantial transformation as defined
by the regulations set forth supra.
Moreover, pursuant to 19 CFR 12.130(d)(2)(v), the "value
added" to an article is yet another factor which aids in
determining country of origin. The greatest cost in producing
the articles at issue is incurred in Taiwan, as that is where the
fabric is manufactured. Accordingly, the country of origin of
these articles is Taiwan as that is where the articles last
underwent a substantial transformation and that is where the
greatest value was added to the subject merchandise.
HOLDING:
The country of origin of the subject merchandise is Taiwan.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
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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 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