CLA-2 CO:R:C:T 956030 PR
Mr. Darryl Golden
Norman Krieger, Inc.
P.O. Box 92599
Los Angeles, California 90009
RE: Modification of New York Ruling Letter (NY) 878608,
Concerning the Country of Origin of Sheets
Dear Mr. Golden:
This is in reference to New York Ruling Letter (NY) 878608,
issued October 6, 1992, by the Area Director of Customs, New York
Seaport, addressed to your company, concerning the country of
origin of sheets. We have reviewed that ruling and determined
that it is in error. Pursuant to section 625(c)(1), Tariff Act
of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of
Title VI (Customs Modernization) of the North American Free Trade
Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057)
(hereinafter section 625), notice that Customs was proposing to
modify NY 878608 was published October 12, 1994, in the Customs
Bulletin, Volume 28 Number 41. This modifies that ruling.
FACTS:
According to the information contained in NY 878608, fitted
bed sheets are made in Kenya from fabric woven, bleached, dyed or
printed, and finished in Pakistan. In Kenya, the fabric is
stitched on two sides and each of the four corner pockets are
finished by cutting, sewing, and adding elastic. The ruling does
not state whether the fabric is shipped to Kenya in rolls or in
cut pieces, but since the ruling does state that the fabric "is
stitched on two sides" in Kenya, we assume that the fabric is
exported from Pakistan in roll form and is cut to length (but not
width) in Kenya.
ISSUE:
The issue presented is which country, Pakistan or Kenya, is
the country of origin of the subject sheets.
LAW AND ANALYSIS:
Section 12.130, Customs Regulations (19 CFR 12.130)
provides, in pertinent part, that a textile or textile product
which consists of materials processed in more than one foreign
country shall be a product of the country where it last underwent -2-
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.
In applying the above criteria, Customs has taken the view
that when fabric formed in one country is converted to fitted
sheets in a second country, in order for the second country to be
the country of origin of the sheets, among other things, all four
sides of the sheets must be cut and hemmed in that second country
(see e.g. HQ 955780, dated May 17, 1994; HQ 954872, dated
December 2, 1993; HQ 954710, dated October 7, 1993). Since the
fitted sheets which were the subject of NY 878608 were only cut
and hemmed on two sides in Kenya, the processing in that country
did not constitute a substantial transformation.
We recognize that cutting fabric on all four sides may not
reflect the usual method of producing bed sheets. However,
manufacturing bed sheets by cutting the fabric on two or three
sides does not, in our view, involve sufficient processing to
satisfy the requirement of substantial manufacturing or
processing operations.
It has been pointed out to us that other Customs rulings
exist which are in agreement with NY 878608. We were not aware
of those rulings at the time the proposal to modify NY 878608 was
prepared. Customs will move as expeditiously as possible to
modify or revoke those rulings and any others we find which do
not agree with this ruling.
HOLDING:
The country of origin of the fitted sheets described in NY
878608 is Pakistan. NY 878608, dated October 6, 1992, is hereby
modified to reflect this holding.
Publication of rulings or decisions pursuant to section 625
does not constitute a change of practice or position in
accordance with section 177.10(c)(1), Customs Regulations (19 CFR
177.10(c)(1)).
Sincerely,
John Durant, Director
Commercial Rulings Division