MAR-2-05 CO:R:C:V 734664 AT
Mr. Arnold Cohen
Jackson Fabrics Associates, Inc.
350 Fifth Avenue, Suite 2704
New York, New York 10118
RE: Country of origin marking of imported sheet sets; substantial
transformation; textile products; 19 CFR 12.130; T.D 85-38;
HQ 083544; HQ 086523; HQ 733180
Dear Mr. Cohen:
This is in response to your letter of May 16, 1992,
requesting a ruling on the country of origin of imported sheet
sets from Columbia. A sample sheet set was not submitted for
review.
FACTS:
You state that your company intends to import sheet sets
from Columbia which will consist of one flat sheet, one fitted
sheet and two pillow cases. According to your submission the
production of the sheet sets will involve processing operations
performed in two countries, Taiwan and Columbia. You state that
the greige fabric used in the manufacture of the sheet sets will
be made in Taiwan measuring approximately 70 X 46 with 30/1 in
both warp and filling. The greige fabric will then be sent to
Columbia where it will be cut to length, bleached, printed,
thermofixed, calendared, the seams are sewn, inspected and
packaged for export to the U.S.
ISSUE:
What is the country of origin of the imported sheet sets
processed in the manner described above?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that, unless excepted, every article of foreign
origin imported into the U.S. shall be marked in a conspicuous
place as legibly, indelibly, and permanently as the nature of the
article (or container) will permit, in such a manner as to
indicate to the ultimate purchaser in the U.S. the English name
of the country of origin of the article.
Section 12.130, Customs Regulations (19 CFR 12.130), sets
forth the principles for determining country of origin for
marking and other purposes for textile and textile products. 19
CFR 12.130(b), 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.
19 CFR 12.130(d) sets forth the criteria to be applied in
determining whether a substantial transformation of a textile
product has taken place. This regulation states that 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) 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) states that in 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 as a
result of the manufacturing or processing operations in each
foreign territory or country, or insular possession of the U.S.
(ii) The time involved in the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iii) The complexity of the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iv) The level or degree of skill and/or technology required
in the manufacturing or processing operations in each foreign
territory or country, or insular possession of the U.S.
(v) The value added to the article or material in each
foreign territory or country, or insular possession of the U.S.,
compared to its value when imported into the U.S.
You state that the greige fabric for these sheet sets is
made in Taiwan. One of the examples enumerated is 19 CFR
12.130(e)(iii), which states that weaving, knitting or otherwise
forming fabric is an example of a manufacturing or processing
operation which would qualify under 12.130 as a substantial
transformation. Clearly, making fabric out of yarn results in a
new and different article of commerce. Therefore, the making of
the greige fabric in Taiwan constitutes a substantial
transformation.
The second question presented is whether the greige fabric
undergoes a later substantial transformation in Columbia, where
the fabric is further processed (cut, bleached, printed,
thermofixed, calendared, the seams are sewn, inspected) into the
finished sheet sets (flat sheets, fitted sheets and pillow cases)
and packaged for export to the U.S.
Customs recently held in HQ 086523 (April 25, 1990), that
bed sheets made out of material woven, dyed and printed in
Pakistan were considered to be from Pakistan even though the
material was cut to length and hemmed in Dubai. The processed
performed in Dubai, i.e., cutting to length and hemming, did not
constitute a substantial transformation. This ruling is
consistent with the example set forth in 19 CFR 12.130(e)(2)(ii).
Customs also ruled in HQ 086523 that the pillow cases, which were
cut and sewn together in Dubai, were considered to be from Dubai.
Further, Customs ruled in HQ 083544 (February 28, 1990), that
material cut to both width and length and hemmed to be made into
towels and dishcloths was not substantially transformed because
after examining the factors set forth in 19 CFR 12.130(d),
Customs concluded that the processing operations performed in the
second country were not substantial.
In this case, greige fabric made in Taiwan is further
processed in Columbia into flat sheets, fitted sheets and pillow
cases. Therefore, under 19 CFR 12.130 the question presented is
whether the greige fabric has been subjected to substantial
manufacturing or processing operations resulting in a new and
different article of commerce to constitute a substantial
transformation.
When fabric is used to make a completed flat sheet, it is
clear that a new and different article of commerce has been
created. However, the second prong of the substantial
transformation test under 19 CFR 12.130 requires a finding that
the textile or textile product has been transformed by means of
substantial manufacturing or processing operations. You state
that the greige fabric is further processed in Columbia into the
finished flat sheets by cutting the fabric on all four sides and
hemming all four sides by sewing. As discussed above, the
cutting to length only and hemming of a bed sheet has already
been held in HQ 086523 not to constitute a substantial
manufacturing process. Therefore, we find that the manufacturing
operations performed in Columbia in making the flat sheets is not
a substantial manufacturing or processing operation. Because the
second prong of the substantial transformation test of 19 CFR
12.130 has not been satisfied, the fabric is not considered
substantially transformed in Columbia. Accordingly, the country
of origin of the flat sheets would be Taiwan.
With respect to the processes performed in Columbia in
making the fitted sheets, you state that the imported fabric is
cut at the corners and elastic is sewn into the cloth so that the
corners will fit over the mattress. In HQ 733180 (December 13,
1990) Customs held that imported fabric from Turkey which was cut
at the corners and had elastic sewn into the cloth in Australia
into finished fitted sheets was substantially transformed as a
result of the manufacturing operations performed in Australia.
One of the factors considered by Customs in reaching its
conclusion was that the imported fabric underwent a substantial
manufacturing or processing operation as a result of the cutting
and sewing operations performed because making the fitted sheets
required additional cutting and stitching and was more complex
than merely sewing a straight hem. Customs also determined that
fabric which is made into fitted sheets results in a new and
different article of commerce. Similarly in this case,
we find that the imported fabric is substantially transformed as
a result of the operations performed in Columbia. Accordingly,
the country of origin of the fitted sheets would be Columbia.
With regard to the pillow cases, you state that in Columbia
the greige fabric is cut, folded, sewn and hemmed on 3 sides,
including the open side which requires hemming both sides into
the finished pillow cases. As stated above, in HQ 086253 Customs
held that fabric made into pillow cases was a substantial
transformation. In that case, it was determined that fabric
which was processed (cut, folded, sewn and hemmed on 3 sides,
including the open side which required hemming both ends) into
pillow cases does undergo substantial manufacturing into a new
and different article of commerce and therefore was substantially
transformed. Similarly, in this case, we find that the
operations performed in Columbia in making the pillow cases
(fabric is cut, folded, sewn and hemmed on 3 sides, including the
open side which requires hemming both ends) constitutes a
substantial transformation of the imported greige fabric.
Accordingly, the country of origin of the pillow cases would be
Columbia.
HOLDING:
The country of origin of the bed sheet sets which are
processed in the manner described above and pursuant to 19 CFR
12.130, is Taiwan for the flat sheets and Columbia for the fitted
sheets and pillow cases.
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. In such circumstances, 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