CLA-2 CO:R:C:T 954710 CAB
Joseph A. Gleicher
Poly-Commodity Corporation
175 Great Neck Road
Great Neck Plaza, NY 11021
RE: Country of origin of fitted sheets, flat sheets, and
pillowcases; Section 12.130
Dear Mr. Gleicher:
This is in response to your inquiry of July 26, 1993,
requesting a country of origin determination concerning flat
sheets, fitted sheets, and pillowcases. The merchandise will be
entered through the port of New Jersey and Long Beach,
California.
FACTS:
A flat sheet, fitted sheet, and pillowcase are submitted as
representative samples of the merchandise at issue. The
manufacturing process includes the following: Fabric constructed
of 100 percent cotton flannel will be woven, bleached, brushed
and printed in Pakistan; The fabric will then be shipped in rolls
to Egypt for further operations; The processing in Egypt involves
cutting both the fitted and flat sheets on two sides (width),
sewing, and inserting piping along the folded over edge of the
flat sheet. Both the fitted and flat sheet samples contain two
selvages extending lengthwise which indicate that they have only
been cut on two sides (width). The fitted sheet is cut and
elastic is attached on each of the four corners. The pillowcases
are cut on all four sides, hemmed, folded, and piping is inserted
along the folded top edge. The completed articles are then
packaged for exportation to the United States.
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 into 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.
When making a determination as to whether fabric used to
make sheets has been substantially transformed, the minimum
processing required is cutting the fabric to length and width
(four sides). After the fabric has been cut on four sides,
Customs assesses the additional processing and makes a
determination as to whether the additional processing coupled
with the cutting, amounts to a substantial manufacturing
operation.
In prior cases, Customs has evaluated the degree of skill,
value, and amount of time expended to manufacture sheets and made
substantial transformation conclusions accordingly. In
Headquarters Ruling Letter (HRL) 952909, dated April 12, 1993,
Customs concluded that fabric that had been cut to length and
width, coupled with the additional processing required to attach
piping to flat sheets, amounted to a substantial manufacturing
operation. In HRL 953477, dated May 18, 1993, Customs
distinguished fitted sheets that had been cut to length and
width, and fitted sheets that had merely been cut on two sides.
Customs applied the criteria stipulated in Section 12.130 and
concluded that merely cutting fabric to length, hemming, and
adding elastic to the corners did not result in a substantial
manufacturing operation. Customs evaluated the processing
involved in manufacturing the fitted sheets that had been cut to
both length and width and maintained that the processing involved
amounted to a substantial manufacturing operation.
In your submission you refer to HRL 952070 issued to you by
this office regarding the country of origin of flat sheets with
capping, piping, and ruffles. You state that the manufacturing
operation in this instance in identical to the manufacturing
operation presented in HRL 952070 and therefore, the country of
origin of the merchandise at issue is Egypt. In HRL 952070 woven
fabric was manufactured, bleached, brushed, and printed in
Pakistan. The fabric was then shipped in rolls to Thailand where
it was cut to length and width (four sides), hemmed, and the
additional embellishments were attached. Customs determined that
the processing operations in Thailand were not sufficiently
complex to amount to a substantial transformation in compliance
with Section 12.130 and therefore, the last substantial
transformation occurred in Pakistan.
After further review of the facts of HRL 952070, Customs
determined that the country of origin determination was in error
and it was modified by HRL 953378, dated February 19, 1993.
In HRL 953378, Customs noted that cutting fabric to length and
width in conjunction with adding piping, capping, or ruffles, to
a sheet was sufficiently complex to amount to a substantial
manufacturing operation. Therefore, the merchandise in question
underwent its last substantial transformation in Thailand.
In spite of your assertion that the instant merchandise
undergoes processing identical to the merchandise of HRL 952070,
there is a marked difference which you fail to acknowledge. The
fabric of HRL 952070 had been cut to both length and width (four
sides), whereas the fabric in this instance has only been cut to
width (two sides). As stated above, the minimum requirement for
a sheet to be substantially transformed in a second country is
cutting to both length and width (four sides) coupled with
additional processing. Consequently, the fitted and flat sheets
at issue will undergo their last substantial transformation in
Pakistan.
In 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 which will be cut and
sewn into pillowcases in Egypt will undergo its last substantial
transformation in Egypt.
HOLDING:
The country of origin of the fitted and flat sheets is
Pakistan. The country of origin of the pillowcases is Egypt.
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