CLA-2 CO:R:C:T 956634 SK
Melvin S. Mogil
California Innovations Inc.
4211 Yonge Street, suite 610
Willowdale, Ontario
Canada M2P 2A9
RE: Country of origin of soft-sided cooler; 19 CFR 12.130;
material cut in Taiwan; assembly of pre-cut components in China;
mere assembly is not substantial transformation; HRL 951899
(10/31/92); 954225 (8/30/93).
Dear Mr. Mogil:
This is in response to your letter of June 6, 1994,
requesting a country of origin determination for the "THERMALWHIZ
Collapsible Cooler."
FACTS:
The materials for the "THERMALWHIZ Collapsible Cooler," are
sourced and cut into component parts in Taiwan and assembled in
China. The specific operations are as follows:
1) Most of the raw materials that comprise this product are
purchased in Taiwan (73 cents worth of material is purchased in
China, representing 12 percent of the total $5.95 cost of the
product);
2) The raw materials are cut into cooler components in Taiwan;
3) The pre-cut components are assembled into the completed cooler
in China. Assembly costs incurred in China represent 6 percent
(36 cents) of the total price ($5.95) of the cooler. A total of
18 percent ($1.09) of the total cost of the product is incurred
in China.
4) 82 percent ($4.86) of the cost of the product is incurred in
Taiwan (i.e., cost of raw materials, cost of cutting operations,
shipping expenses to transport the component pieces from Taiwan
to China).
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Although no sample was submitted to Customs for examination,
you state that the "THERMALWHIZ Collapsible Cooler" was
previously classified under subheading 4202.92.3030, HTSUSA,
which provides for, inter alia, other travel, sports and similar
bags, with outer surface of textile man-made fibers. The
applicable textile quota category is 670.
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. See HRL 951899, dated
October 31, 1992, in which Customs issued a country of origin
determination for soft-sided luggage manufactured in a similar
manner.
Pursuant to 19 CFR 12.130(d)(2)(v), the "value added" to an
article is another factor which aids in determining country of
origin. The greatest cost in producing the cooler is incurred in
Taiwan (82 percent of the total cost of the cooler), as that is
where nearly all of the raw materials are sourced and where the
material is cut into component parts. Accordingly, the country
of origin of the subject cooler is Taiwan as that is where the
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articles last underwent a substantial transformation and where
the greatest value was added to the subject merchandise.
HOLDING:
The country of origin of the "THERMALWHIZ Collapsible
Cooler" is Taiwan.
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 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