CLA-2 CO:R:C:T 955526 ch
Inna Gorodetsky
Administrative Manager
Emerson U.S.A.
951 Indiana Street
San Francisco, California 94107
RE: Country of origin marking of imported flag prints from
Japan and Taiwan; 19 CFR 12.130; printing; cutting to
length or width; sewing, hemming, grommets, labeling,
packaging.
Dear Ms. Gorodetsky:
This is in response to your letters of December 1, 1993, and
February 17, 1994, requesting a country of origin ruling for
certain imported flag prints.
FACTS:
Pongee polyester greige fabric is woven in Japan and
exported to Taiwan. In some instances the fabric is cut to
length, in others it is exported in material lengths.
The material is printed or dyed (not both) in Taiwan. In
addition, material imported in the piece will be cut to length.
The printed material is hung, dried, cured, baked and then
exported to the United States.
In the United States, the sides are trimmed. A header and
grommets are sewn on one side of the print and the remaining
sides are hemmed. The finished flags are then labeled, folded
and packaged.
You have submitted calculations indicating that the costs of
printing the fabric in Taiwan and finishing the flags in the
United States are approximately equal. The costs associated with
weaving the fabric in Japan were not submitted.
ISSUE:
What is the country of origin for the printed flags?
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 for the article.
Country of origin determinations for textile products are
subject to Section 12.130 of the Customs Regulations (19 CFR
12.130). Section 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.
Section 12.130(d) of the Customs Regulations sets forth
criteria 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) of the Customs Regulations 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 United States.
(ii) The time involved in the manufacturing or
processing operations in each foreign territory or
country, or insular possession of the United States.
(iii) The complexity of the manufacturing or
processing operations in each foreign territory or
country, or insular possession of the United States.
(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 United States.
(v) The value added to the article or material in each
foreign territory or country, or insular possession of
the United States, compared to its value when imported
into the United States.
Section 12.130(e)(1) sets forth manufacturing or processing
operations which will usually constitute a substantial
transformation. Section 12.130(e)(2) enumerates instances which
will usually not constitute a substantial manufacturing or
processing operation. In Treasury Decision (T.D.) 85-38,
published in the Federal Register on March 5, 1985, (50 FR 8714),
the final rule document which established 19 CFR 12.130, there is
a discussion of how the examples and factors enumerated in the
regulation are intended to operate:
Examples set forth in 19 CFR 12.130(e) are intended to
give guidance to Customs officers and other interested
parties. Obviously, the examples represent clear
factual situations where the country of origin of the
imported merchandise is easily ascertainable. The
examples are illustrative of how Customs, given factual
situations which fall within those examples, would rule
after applying the criteria listed in 12.130(d). Any
factual situation not squarely within those examples
will be decided by Customs in accordance with the
provisions of 12.130(b) and (d).
Section 12.130(e) reads as follows:
Manufacturing or processing operations. (1) An article
or material usually will be a product of a particular
foreign territory or country, or insular possession of
the U.S., when it has undergone prior to importation
into the U.S. in that foreign territory or country, or
insular possession any of the following:
(i) Dyeing of fabric and printing when
accompanied by two or more of the following finishing
operations: bleaching, shrinking, fulling, napping,
decating, permanent stiffening, weighting, permanent
embossing, or moireing;
(ii) Spinning fibers into yarn;
(iii) Weaving, knitting or otherwise forming
fabric;
(iv) Cutting of fabric into parts and the
assembly of those parts into the completed article; or
(v) Substantial assembly by sewing and/or
tailoring of all cut pieces of apparel articles which
have been cut from fabric in another foreign territory
or country, or insular possession, into a completed
garment (e.g. the complete assembly and tailoring of
all cut pieces of suit-type jackets, suits and shirts).
(2) An article or material usually will not be
considered to be a product of a particular foreign
territory or country, or insular possession of the U.S.
by virtue of merely having undergone any of the
following:
(i) Simple combining operations, labeling,
pressing, cleaning or dry cleaning, or packaging
operations, or any combination thereof;
(ii) Cutting to length or width and hemming or
overlocking fabrics which are readily identifiable as
being intended for a particular commercial use;
(iii) Trimming and/or joining together by sewing,
looping, linking, or other means of attaching otherwise
completed knit-to-shape component parts produced in a
single country, even when accompanied by other
processes (e.g. washing, drying, mending, etc.)
normally incident to the assembly process;
(iv) One or more finishing operations on yarns,
fabrics, or other textile articles, such as
showerproofing, superwashing, bleaching, decating,
fulling, shrinking, mercerizing, or similar operations;
or
(v) Dyeing and/or printing of fabrics or yarns.
In this instance fabric woven in Japan is exported to
Taiwan, where it is printed or dyed, hung, baked, dried and
cured. On occasion the fabric is also cut to length. Pursuant
to Section 12.130(e)(2)(v), dyeing or printing fabric does not
constitute a substantial transformation. Furthermore, cutting
fabric to length is not the complex cutting into parts and
assembly of those parts set forth in Section 12.130(e)(1)(iv).
Rather, it entails a simple straight-line incision on two sides
of the article. Hence, the cutting in this case does not
constitute a substantial processing operation. Finally, the
baking, drying, curing and hanging operations are analogous to
the finishing operations set forth in Section 12.130(e)(2)(iv)
and do not substantially transform the merchandise. As a result,
the unfinished flags are not a product of Taiwan.
In the United States, the four sides of the unfinished flags
are trimmed. A header with grommets is sewn on one side of the
flag. The other three sides are hemmed. The finished product is
labeled and packaged. The trimming, grommeting and hemming
operations are simple assembly processes as set forth in Section
12.130(e)(2)(iii). Moreover, the labeling and packaging
operations are mere combining operations of Section
12.130(e)(2)(i). These processes are not substantial
manufacturing operations and do not result in a substantial
transformation of the flags. Consequently, the flags are not
products of the United States.
The foregoing conclusions are consistent with our prior
decisions concerning merchandise undergoing similar processing
operations. In Headquarters Ruling Letter (HRL) 953295, dated
May 7, 1993, woven greige fabric from China was exported to
Mauritius to be processed into finished flat sheets. In
Mauritius, the fabric was printed, cut, sewn, scoured, bleached
and packaged. We concluded that there was no substantial
transformation in Mauritius. Therefore, the flat sheets were
products of China.
In HRL 555677, dated November 5, 1990, rolls of cotton
fabric were exported to Jamaica to be manufactured into surgical
cloths. In Jamaica, the fabric was dyed, cut, stitched on all
four edges and packaged. We found that the operations performed
in Jamaica were not complex and did not constitute a substantial
transformation.
HOLDING:
The country of origin of the subject merchandise is Japan.
In accordance with Customs Regulation 134.46, the country of
origin must be preceded by "Made in," or "Products of," or other
similar words. However, the marking "Made in Japan, Finished in
the United States," is acceptable. A marking of "Made in Japan,
Constructed in the United States," is not acceptable as it does
not accurately describe the operations performed in the United
States.
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 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