CLA-2 CO:R:C:T 955477 CAB
TARIFF N0.: 4202.22.8050
Lorraine M. Dugan
Associated Merchandising Corporation
1440 Broadway
New York, NY 10018
RE: Country of origin of tapestry handbags; Classifiable in
Heading 4202; GRI 3(b)
Dear Ms. Dugan:
This is in response to your inquiry of October 19, 1993,
requesting a country of origin and tariff classification
determination for certain handbags. Several samples were submitted
for examination.
FACTS:
There are three styles of handbags at issue. The styles are
referred to as CH-10(5029), CH-11(5099), and CH-12(5100B). All of
the handbags are constructed of 80 percent polyester/20 percent
acrylic tapestry fabric and imitation leather. Each bag features
imitation leather shoulder straps, zippers, grommets, piping,
webbing, labels, and assorted sections and pockets. Style 5099 has
double imitation leather handles in addition to the shoulder strap,
which is removable.
The tapestry fabric as well as all the other components of the
finished handbags are manufactured in Korea. The fabric is also
cut into panels in Korea and all processing of the components,
except final sewing and assembly is completed in Korea. The
components are then transported to China for further processing.
The processing in China includes gluing, sewing, and
assembling the sub-assembled pieces such as the flap, shoulder
straps, covered piping, handles, "D" ring holders, tabs, change
pocket, collars, affixing the rivets and snaps, as well as the
final assembly of the finished product.
A cost breakdown was submitted for the processing of the
subject merchandise. The cost incurred for the processing in Korea
ranges from 87 percent to 88.4 percent while the cost incurred for
the processing in China ranges from 11.6 percent to 13 percent.
ISSUES:
I. What is the tariff classification under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) for the subject
merchandise?
II. What is the country of origin for the subject merchandise?
LAW AND ANALYSIS:
TARIFF CLASSIFICATION
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI's). GRI 1 provides that
classification shall be determined according to the terms of the
headings and any relative section or chapter notes. Merchandise
that cannot be classified in accordance with GRI 1 is to be
classified in accordance with subsequent GRI's taken in order.
Heading 4202, HTSUSA, is the provision 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; traveling bags, toiletry
bags, knapsacks and backpacks, handbags, shopping bags, wallets,
purses, map cases, cigarette cases, tobacco pouches, tool bags,
sports bags, bottle cases, jewelry boxes, powder cases, cutlery
cases and similar containers, of leather or of composition leather,
of sheeting of plastics, of textile materials, of vulcanized fiber
or of paperboard, or wholly or mainly covered with such materials
or with paper.
GRI 3(a) requires that where two or more headings describe the
merchandise, the more specific will prevail; or if two or more
headings each refer to part only of the materials in the goods,
then classification will be by GRI 3(b). GRI 3(b) states that the
material or component which imparts the essential character to the
goods will determine the classification.
The handbags at issue are constructed of two components,
textile fabric and vinyl plastic in the form of imitation leather.
Handbags with an outer surface of plastic sheeting are provided
for under subheading 4202.22.15, HTSUSA, whereas those with an
outer surface of textile material are covered in subheading
4202.22.80, HTSUSA. The textile portion of the handbags at issue
is instantly recognizable as imparting the essential character of
the merchandise. The tapestry fabric makes up the majority of the
handbag, whereas the imitation leather is utilized only as trimming
on the straps and edging. The tapestry fabric is the most readily
identifiable feature of the handbag and it costs more than the
imitation leather components. As a result, the handbags at issue
are classifiable under subheading 4202.22.80, HTSUSA, which
provides for handbags with outer surface of textile materials.
COUNTRY OF ORIGIN
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
operation
(iii) The complexity of the manufacturing or
processing operation
(iv) The level or degree of skill and/or technology
required
(v) The value added to the article or material
Although the handbags are sewn and assembled in China, the
tapestry fabric and the majority of all the other components are
manufactured in Korea. In addition, the cutting of the fabric
into panels occurs in Korea. The sewing and final assembly process
in China is relatively simple, consisting of a joining together of
components, some of which have already been subassembled in Korea.
Therefore, the processing in China does not constitute a
substantial manufacturing operation in accordance with Section
12.130, Customs Regulations. Moreover, pursuant to Section
12.130(d)(2)(v), the value added to merchandise in a particular
country is a factor in determining country of origin. In this
instance, more than three-quarters of the total value of the
merchandise arises from the manufacturing operations and materials
originating in Korea. Consequently, the country of origin of the
subject merchandise is Korea since this is the country where the
last substantial transformation occurred.
This analysis and conclusion is in accordance with similar
Headquarters Ruling Letters (HRLs) that determined the country of
origin of bags similar to the subject handbags. For example, in
HRL 951899, dated October 31, 1992, Customs concluded that the
country of origin of tote bags and luggage featuring zippers,
grommets, piping, webbing and textile fabric manufactured and cut
into panels in Taiwan and then sent to China for sewing and
assembly were subject to their last substantial transformation in
Taiwan. See also, HRL 954225, dated August 30, 1993.
HOLDING:
Based on the foregoing, styles CH-10(5029), CH-11(5099), and
CH-12(5100B) are classified in subheading 4202.22.8050, HTSUSA,
which provides for handbags with an outer surface of textile
material, of man-made fibers. The applicable rate of duty is 20
percent ad valorem and the textile restraint category is 670. The
country of origin of the subject handbags is Korea.
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).
The designated textile and apparel category may be subdivided
into parts. If so, visa and quota 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 that you check, close to the time
of shipment, the Status Report on Current Import Quotas (Restraint
Levels), an internal issuance of the U.S. Customs Service, which
is available for inspection 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 applicable to textile
merchandise, you should contact your local Customs office prior to
importing the merchandise to determine the current status of any
import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division