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