CLA-2 CO:R:C:T 088455 KWM
Mr. Robert C. Shoule
J.W. Hampton, Jr. & Co.
15 Park Row
New York, New York 10038
RE: Nylon backpacks; Acme Brief Case Co., Inc.; classification;
textile; plastic sheeting; travel, sports and similar bags;
outer surface; country of origin; 19 C.F.R. 12.130.
Dear Mr. Shoule:
This is in reference to your letters dated September 10, 1990,
November 13, 1990. December 28, 1991 and January 15, 1991, all regarding
a binding ruling for nylon backpacks imported by your client Acme Brief
Case Co., Inc. The correspondence dated September 10 and November 13,
1990 are directed to our New York office. The later correspondence was
sent to this office, where the matter has been consolidated for a reply.
FACTS:
The article at issue is described as a "nylon backpack." The
manufacturing and cost breakdowns are provided in your letter as
follows:
-All nylon material, binding, zippers, webbing trim, thread
and hang tag are purchased in Taiwan and are wholly of Taiwanese
origin and manufacture
-The export cartons are printed and made in Taiwan
-In Taiwan the nylon material is die-cut to proper shapes
for stitching into knapsacks/backpacks
-All the cut material along with the shipping cartons,
zippers, webbing and other trim parts are shipped to Indonesia
-The cut material, zippers, etc., are assembled into
knapsacks/backpacks in Indonesia
-The assembly process, performed in Indonesia, consists of
simple sewing of two or more pieces together, by unskilled labor
-The assembled knapsacks/backpacks are packed into the
cartons provided, then shipped to the United States
The cost breakdown per dozen is as follows:
Indonesia
Labor $3.36
Polybag .264
Carton .144
Inland trucking .468
Bank charges .24
$4.476
Taiwan
Nylon with PVC Backing $7.44
PVC Sheeting for pocket Backing .228
Cost of Designs & Dies .084
Cost of Cutting .236
Cost of Zippers 1.68
Cost of P.P.Webbing .864
Foam padding for backstraps .444
Plastic Buckles .45
Thread .216
Hangtag .212
$11.854
The grand total of the cost per dozen is $16.33
The percentage breakdown is as follows:
Taiwan Indonesia
72.6% 27.6%
Your initial letters, sent to New York, contained only the narrative
facts above. 19 C.F.R. 12.130 describes the criteria for determining
the country of origin for textile products. The narrative description
of the goods was insufficient to make a country of origin determination
as prescribed by the regulations. Therefore, your initial inquiry was
returned to you with a request for additional cost and component
breakdowns, and with instruction to forward your response to this office
for a reply.
ISSUE:
Are the goods at tissue classified as backpacks of heading 4202,
HTSUSA?
What is the country of origin of the subject merchandise?
LAW AND ANALYSIS:
HTSUSA Classification
Classification under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA) is made in accordance with the General Rules
of Interpretation (GRI's). The systematic detail of the harmonized
system is such that virtually all goods are classified by application
of GRI 1, that is, according to the terms of the headings of the tariff
schedule and any relevant Section or Chapter Notes. In the event that
the goods cannot be classified solely on the basis of GRI 1, and if the
headings and legal notes do not otherwise require, the remaining GRI's
may be applied, taken in order.
Heading 4202, HTSUSA, provides for:
Trunks, suitcases, vanity cases, attache cases. briefcases, school
satchels, spectacle cases, binocular cases, camera cases, musical
instrument cases, gun cases, holsters and similar containers;
toiletry bags, knapsacks, purses, map cases, cigarette cases,
tobacco pouches, toolbags, sports bags, bottle cases, jewelry
boxes, powder case, cutlery cases and similar containers, of
leather or of composition leather, of plastic sheeting, of textile
materials, of vulcanized fiber or paperboard, or wholly or mainly
covered with such materials.
A nylon backpack such as this is classified in heading 4202, HTSUSA.
Within that heading, subheading 4202.92.3020, HTSUSA, provides for:
4202 Trunks, suitcases, . . .
Other:
4202.92 With outer surface of plastic sheeting
or of textile materials:
Travel, sports and similar bags:
With outer surface of textile
materials:
4202.92.30 Other:
Other:
Of man-made
fibers:
4202.92.3020
Backpacks:
Additional U.S. Note 1 states that:
1. For the purposes of heading 4202, the expression
"travel, sports and similar bags" means goods . . . of
a kind designed for carrying clothing and other
personal effects during travel. including backpacks .
. .
Articles such as these, nylon backpacks, having an outer surface of
textile material, specifically of man-made fibers, are classified in
subheading 4202.92.3020, HTSUSA.
Country of Origin
Title 19 of the Code of Federal Regulations (C.F.R.), at 12.130,
provides for the country of origin marking of textiles and textile
products. In general, 12.130 states that a textile product subject to
the regulations shall be the product of the country where the whole of
its growth, production, or manufacture occurs. If the product is made
of materials produced or derived from, or processed in, more than one
foreign country, then the country of origin shall be that in which the
product last underwent a substantial transformation. Lastly, in
subsection 12.130(d), the criteria for determining country of origin
are described. They include the physical change in the material or
article, the time involved in the manufacturing or processing
operations, the complexity of the operations, the level or degree of
skill and/or technology required, and the value added to the article.
These criteria are not exhaustive; one or any combination of these
criteria, as well as additional factors, may be considered.
Although the article is assembled and packed in Indonesia, the nylon
material and other components are "wholly of Taiwanese origin and
manufacture." In addition, the design and cutting operations are
performed in Taiwan. The raw material manufacture, design and cutting
operations are deemed to be the factors which contribute most to the
creation of the final product. We also note that over two-thirds of
the total value of the goods (72.6 percent) is contributed in Taiwan.
The value added in Indonesia is slightly above one-quarter (27.4
percent).
The Indonesian manufacturing processes do not indicate that assembly
consists of more than simple fabrication from piece goods of Taiwan
origin. Such operations do not constitute a substantial manufacturing
or processing operation as described in 19 C.F.R. 12.130, resulting in
a new and different article. The country of origin for this article is
Taiwan.
Marking Requirements
Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), provides
that articles of foreign origin imported into the U.S. must be legibly,
conspicuously and permanently marked to indicate the country of origin
to the ultimate purchaser in the U.S. As noted above, the country of
origin for the merchandise at issue here is Taiwan. The goods should
be marked in accordance with 19 U.S.C. 1304 and the implementing
regulations found in Title 19 C.F.R. Part 134.
HOLDING:
The merchandise at issue, backpacks made of PVC backed nylon textile
material, are classified in subheading 4202.92.3020, HTSUSA. The
applicable rate of duty is 20 percent ad valorem. Further, the country
of origin for these goods is Taiwan. As a product of Taiwan, these
goods will be subject to a textile quota, and a visa for category 670
must accompany the goods.
The designated textile and apparel category may be subdivided into
parts. If so, the visa and quota category requirements applicable to
the subject merchandise may be affected. Since part categories are the
result of international bilateral agreements which are subject to
frequent renegotiations and changes, to obtain the most current
information available, we suggest you check, close to the time of
shipment, the Status Report on Current Import Quotas (Restraint
Levels), an issuance of the U.S. Customs Service, which is updated
weekly and is available at your local Customs office.
Due to the changeable nature of the statistical annotation (the ninth
and tenth digits of the classification) and the restraint (quota/visa)
categories, you should contact your local Customs office prior to the
importation of this merchandise to determine the current status of any
import restraints or requirements.
The holding in ruling letter is binding only as it applies to the
particular transaction or issue described in your request (19 C.F.R.
177.9(a)). Each ruling is issued on the assumption that all of the
information you provided is accurate and complete in every material
respect (19 C.F.R. 177.9(b)(1)). In the event that information
provided should differ from the actual occurrence or does not comply
with 19 C.F.R. 177.9, this ruling will be subject to modification or
revocation and may no longer be relied upon. In particular, the
country of origin determination may be affected. In such a case, we
recommend that a new request for binding ruling be submitted in
accordance with 19 C.F.R. 177.2.
Sincerely,
John A. Durant
Director