CLA-2 CO:R:C:T 950653 CRS
Ms. Maureen Shoule
J.W. Hampton, Jr. & Co., Inc.
15 Park Row
New York, NY 10038
RE: Insulated picnic and lunch bags; travel, sports and similar
bags; country of origin; 19 CFR 12.130; marking; 19 U.S.C. 1304.
Dear Ms. Shoule:
This is in reply to your letter of October 9, 1991, to our
New York office, on behalf of Access Bag N' Pack, concerning the
tariff classification and country of origin of three insulated
picnic and lunch bags. A sample of the merchandise was provided
and is described below.
FACTS:
The merchandise in question is described as insulated picnic
and lunch bags with an outer surface of nylon, styles 45041,
45071 and 45031. All of the materials used in the construction
of the bags, including the nylon outer shell, the insulating
material, zippers, webbing, trim, thread and hang tags are wholly
of Taiwanese origin and manufacture. In Taiwan, the materials
are die-cut into the required shapes for final assembly. The cut
parts are then sent to Indonesia where they are assembled into
finished bags, packed into cartons (also of Taiwanese origin) and
shipped to the United States. In addition to a description of
the assembly process you have provided cost breakdowns per dozen
units, which is summarized below in percentage terms: style
45051: Taiwan 78%, Indonesia 22%; style 45071: Taiwan 76.1%,
Indonesia 23.9%; style 45031: Taiwan 75.2%, Indonesia 24.8%.
ISSUE:
The issues presented are: (1) whether insulated picnic bags
are classifiable as travel, sports and similar bags; and (2)
whether the assembly operations in Indonesia are sufficient to
constitute a substantial transformation under 19 CFR 12.130.
LAW AND ANALYSIS:
Classification
Heading 4202, HTSUSA, provides for, inter alia, traveling
bags, knapsacks, backpacks and similar articles. There is no
specific provision for picnic bags or lunch bags in heading 4202;
however, Additional U.S. Note 1, Chapter 42, HTSUSA, defines the
subheading provision for "travel, sports and similar bags" as
covering "goods...of a kind designed for carrying clothing and
other personal effects during travel, including backpacks and
shopping bags of this heading...." The bags in question are
similar to travel bags and are used to carry and preserve food
during travel. Accordingly, they are classifiable under the
provision for travel, sports and similar bags.
Country of Origin
The country of origin regulations for textiles and textile
products are contained in section 12.130, Customs Regulations (19
CFR 12.130). Section 12.130 provides that a textile or textile
product which consists of materials produced or derived from, or
processed in, more than one foreign country, is considered to be
a product of that foreign country where it last underwent a
substantial transformation. A textile or textile product will be
considered to have undergone a substantial transformation if it
has been transformed by means of a substantial manufacturing
process into a new and different article of commerce. Pursuant
to 19 CFR 12.130(d)(2), the following factors are evaluated in
determining whether merchandise has been subjected to a
substantial manufacturing or processing operation: the physical
change in the article; the time involved in the manufacturing
operation; the complexity of the operations, the level or degree
of skill and/or technology required; and the value added to the
article.
Although the bags are assembled and packed in Indonesia, the
nylon material and other components are designed, manufactured
and cut in Taiwan. In addition, over 70 percent of the cost of
the bags at issue results from operations performed in Taiwan.
In contrast, the operations performed in Indonesia constitute
little more than a simple assembly process. It is therefore
Customs' view that the operations performed in Indonesia do not
result in a substantial transformation, and that, consequently,
Taiwan remains the country of origin of the picnic/lunch bags.
Marking
Section 304, Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that articles of foreign origin imported into the
United States must be legibly, conspicuously and permanently
marked to indicate the country of origin to the ultimate
purchaser in the U.S. In accordance with 19 U.S.C. 1304 and
section 134, Customs Regulations (19 CFR 134), the bags in
question should be marked to indicate their Taiwanese origin.
HOLDING:
The picnic bags in question are classifiable in subheading
4202.92.3030, HTSUSA, under the provision for trunks, suitcases,
vanity cases...traveling bags...and similar containers; other;
with outer surface of plastic sheeting or of textile material;
travel, sports and similar bags; with outer surface of textile
materials; other; other; of man-made fibers; other. They are
dutiable at the rate of 20 percent ad valorem. The applicable
textile category is 670.
Pursuant to 19 CFR 12.130, the country of origin of the
bags is Taiwan.
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, you should contact your local
Customs office prior to importation of this merchandise to
determine the current status of any import restraints or
requirements.
The holding in this ruling 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 a case, 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
Commercial Rulings Division