CLA-2 CO:R:C:T 953477 CAB
Mr. Allan Gordon
Performance Trading Inc.
520 So. Lafayette Park Place
Suite 200
Los Angeles, CA 90057
RE: Modification of HRL 952577 dated February 1, 1993
Dear Mr. Gordon:
This letter is in reference to Headquarters Ruling Letter
(HRL) 952577, dated February 1, 1993, issued to you from this
office, regarding the country of origin for flat sheets, fitted
sheets, and pillowcases. Since the issuance of that ruling, we
have received revised information regarding the fitted sheets
from Brenda Molina, a representative of your company.
Accordingly, this ruling modifies HRL 952577 with respect to the
fitted sheets.
FACTS:
HRL 952577 concerned the country of origin for fitted
sheets, flat sheets, and pillowcases. In your initial inquiry of
September 11, 1992, you stated that piece goods would be exported
from China to Mauritius. In Mauritius the piece goods would be
cut and hemmed at the top and bottom; and elastic would be fitted
and sewn along the four corners of the fabric. Customs concluded
that the country of origin for the fitted sheets was Mauritius.
It was not clear in your initial submission as to whether
the fabric for the fitted sheets would be cut along the four
sides of the fabric (length and width) or just cut at the top and
bottom. After contacting a member of your staff, Brenda Molina,
Customs was informed that some of the fabric used for the fitted
sheets would be cut to length and width in Mauritius, while the
remainder of the fabric would only be cut at the top and the
bottom.
ISSUE:
What is the country of origin for the fitted sheets 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
HRL 089230, dated May 10, 1991, confronted the issue of
where the last substantial transformation occurred when fabric
had been manufactured in Turkey and then sent to Australia for
further processing. The processing in Australia included cutting
the fabric to length and width, hemming, and fitting elastic at
each of the four corners. Customs concluded that the processing
operation in Australia was substantially complex enough so as to
result in a new and different article of commerce. Therefore,
the finished products which were the fitted sheets were
considered products of Australia.
When applying the rationale of HRL 089230 and Section 12.130
to the instant scenario, it appears that some of the fitted
sheets underwent their last substantial transformation in
Mauritius while others underwent their last substantial
transformation in China. Customs is making such a determination
based on the fact that in order to be substantially transformed
into a new and different article of commerce in Mauritius, the
goods in question must be subjected to sufficiently complex
processing in Mauritius. Merely cutting fabric on two sides (top
and bottom) and hemming does not amount to a substantial
manufacturing operation. Consequently, the fabric that has only
been cut at the top and bottom has not been substantially
transformed in Mauritius. However, cutting the fabric in
question to both length and width, hemming, and adding elastic
results in a substantially complex manufacturing operation.
Therefore the fabric that is cut to both length and width,
hemmed, and has elastic sewn to it is subject to its last
substantial transformation in Mauritius.
HOLDING:
The fitted sheets that have been cut to length and width,
hemmed, and had elastic added to them underwent their last
substantial transformation in Mauritius. Therefore, Mauritius is
the country of origin for these fitted sheets. The fitted sheets
that have been cut on the top and bottom, hemmed, and had elastic
sewn onto them in Mauritius have not been substantially
transformed in Mauritius. Consequently, the country of origin
for these particular fitted sheets is China since this is the
country where they underwent their last substantial
transformation.
This notice to you should be considered a modification of
HRL 952577 under 19 CFR 177.9(d)(1). It is not to be applied
retroactively to HRL 952577 (19 CFR 177.9(d)(2)) and will not,
therefore, affect past transactions for the importation of your
merchandise under that ruling. However, for the purposes of
future transactions of merchandise of this type, HRL 952577 will
not be valid precedent.
Sincerely,
John Durant, Director