CLA-2 CO:R:C:T 952909 CAB
John M. Peterson, Esq.
Neville, Peterson & Williams
39 Broadway
New York, NY 10006
RE: Country of origin of Flat Sheets, Fitted Sheets, Comforter
Covers, and Pillowcases; Section 12.130, Customs Regulations;
Duvet Covers
Dear Mr. Peterson:
This letter is in response to your inquiry of November 5,
1992, requesting a country of origin determination, on behalf of
Natural Feather and Textiles, Inc., for flat sheets, fitted
sheets, comforter covers, and pillow cases. This merchandise
will be imported at various ports including Los Angeles/Long
Beach, Seattle and Minneapolis. No samples were submitted for
examination.
FACTS:
Fabric constructed of 100 percent greige cotton will be
manufactured in the People's Republic of China, hereinafter
"China". The greige fabric will then be singed, bleached and
dyed. The dyed fabric will then be sent in bolts to Hong Kong
for additional processing. The merchandise is further processed
as follows:
Flat Sheets
Hong Kong - The rolls of fabric will be cut to both length
and width. The top edge of the fabric will be folded over to
form the top hem. During the construction of the top hem, a
narrow strip of woven fabric will be inserted between the folded
portion of the fabric. In order to secure the strip of woven
fabric, the top portion of the material will be stitched
horizontally. You refer to this strip of fabric as "color
blocking". Customs has consistently referred to this narrow
strip of material attached to bed linen as "piping". The
material will then be hemmed on the sides and the bottom, folded,
and packaged for exportation.
Pillowcases
Hong Kong - The fabric will be cut to length and width,
hemmed, sewn on three sides, folded, and packaged for
exportation.
Fitted Sheets
Hong Kong - The fabric will be cut to length and width,
gussets will be marked and cut, the corner gussets will be sewn
and hemmed on all four sides. Elastic will be fitted and sewn
along the corners, the top, and bottom of the fabric. The item
will then be folded and packaged for export to the United States.
Comforter Covers
The fabric will be marked, cut to both length and width,
hemmed, sewn together on the sides, marked for button holes,
button holes sewn and cut into the fabric, and buttons attached.
ISSUE:
What is the country of origin for the merchandise in
question?
LAW AND ANALYSIS:
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
(iii) The complexity of the manufacturing or processing
(iv) The level or degree of skill
(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 in the completed article has occurred in that country.
However, 12.130(e)(2)(ii) 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.
Headquarters Ruling Letter (HRL) 952579 dated November 25,
1992, confronted the issue of where the last substantial
transformation occurred when flat sheets had been processed in
three countries. Customs concluded that the last substantial
transformation occurred in Country "A" where the fabric had been
manufactured; and not in either Country "B" where the fabric was
bleached and printed, or Country "X" where the fabric was
brushed, shrunk, cut, and hemmed. See also, HRL 952577 dated
February 1, 1993, where Customs was faced with a country of
origin question regarding flat sheets that had been manufactured,
bleached and printed in China, and cut and hemmed in Mauritius.
Customs held that the processing in Mauritius did not amount to a
substantial transformation in accordance with Section 12.130.
In this instance, the woven fabric will be manufactured in
China. The fabric is then exported to Hong Kong for further
processing. This additional processing includes cutting the
fabric to both length and width, hemming, and sewing piping to
the sheet's top edge. The issue presented is whether the
processing in Hong Kong will be substantially complex so as to
result in a new and different article of commerce.
As emphasized in the cited rulings, Customs has consistently
held that minor processing (cutting and hemming) of flat bed
sheets does not constitute a substantial transformation within
the meaning of Section 12.130. However, in the instant case, the
fabric in question will be cut to both length and width, hemmed,
and adorned with piping. The processing required to add piping
to a flat sheet involves an extra manufacturing step which is
more complex and time-consuming, then merely cutting flat sheets
and hemming them.
When fabric is cut to length and width and hemmed in order
to construct a flat sheet, a new and different article of
commerce is created. However, in order for a substantial
transformation to result within the purview of Section 12.130,
there must be additional processing that is sufficiently complex
so as to constitute a substantial manufacturing operation. In
this case, cutting the fabric to length and width coupled with
the additional processing required to attach the piping will
result in the material undergoing a complex manufacturing
operation in Hong Kong. Therefore, the country of origin of the
flat sheets at issue will be Hong Kong. This conclusion is in
accordance with the holding in HRL 952225 dated December 8, 1992,
where 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.
The processing necessary to convert the fabric into fitted
sheets in Hong Kong will include marking, cutting to length and
width, and sewing elastic to the top, bottom, and corners of the
sheet. The degree of difficulty and skill involved in the
processing required to transform the material at issue into a
fitted sheet will be enough to result in a new and different
article of commerce. Therefore, the fitted sheets will undergo a
substantial transformation in Hong Kong.
When determining the country of origin for pillowcases,
Customs refers to Belcrest Linens v. United States, 741 F.2d
1368, (Fed. Cir. 1984). The court held that a bolt of woven
fabric that was manufactured, stenciled with embroidery, and
imprinted with lines of demarcation in China prior to being sent
to Hong Kong where the fabric was cut, sewn into pillowcases, and
packaged was subject to its last substantial transformation in
Hong Kong. Thus, when applying the court's rationale to the
instant case, it appears that the fabric that will be cut and
sewn into pillow cases in Hong Kong will undergo its last
substantial transformation in that country.
The comforter covers will be cut to length and width, folded
and sewn together on the sides. Buttons will also be added to
the finished product. The manufacturing operation involved in
making the finished comforter covers is commensurate in degree of
skill and amount of time to that required in the manufacturing
operations involved in making fitted sheets, pillow cases, and
adorned sheets. As a result of this additional complex
processing, the fabric will become a new and different article of
commerce. Therefore, within the purview of Section 12.130, the
comforter covers will undergo a substantial transformation in
Hong Kong. This conclusion is in accordance with HRL 733180 of
December 13, 1990, which determined that fabric manufactured in
Turkey and sent to Australia to be made into comforter covers
underwent its last substantial transformation in Australia.
HOLDING:
Based on the foregoing, the country of origin of the flat
sheets, pillow cases, comforter covers, and fitted sheets is Hong
Kong.
The holding set forth above 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. 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