CLA-2 CO:R:C:T 956008 CC

Gary Brunell
A.N. Deringer, Inc.
173 W. Service Road
Champlain, NY 12919

RE: A cap with a net used for protection from mosquitos and other insects; country of origin

Dear Mr. Brunell:

This letter is in response to your inquiry, on behalf of Produits Horizon Enr., requesting the country of origin marking of and eligibility for preferential treatment under the U.S.-Canada Free Trade Agreement for a cap from Canada.

In your facsimile of February 4, 1994, you changed this request to an eligibility determination under the North American Free Trade Agreement (NAFTA). The NAFTA eligibility requirements are addressed in a separate letter.

FACTS:

The merchandise at issue, designated by you as a "Bug Cap," is a cap which offers protection from mosquitos and other insects. The cap has a pouch with a snap closure at the front panel over the visor. This pouch contains a net, which can be placed over the wearer's face and attached around the shoulders. The back panels of the cap are made of nylon mesh; the front panel, visor, and pouch are made of 100 percent cotton or a combination of 55 percent cotton and 45 percent polyester. The net is made of 100 percent nylon.

According to your submissions, the cap is made in China. It is shipped to Canada where the pouch and netting are added, along with various minor items such as the label, sewing thread, etc. After completion of the caps, they will be imported into the United States.

ISSUE:

What is the country of origin of the merchandise at issue?

LAW AND ANALYSIS:

According to T.D. 90-17, published in the Federal Register on March 1, 1990 (55 FR 7303), the principles of country of origin for textiles and textile products contained in Section 12.130 of the Customs Regulations (19 CFR 12.130) are applicable to such merchandise for all purposes, including marking. However, 19 CFR 12.130 is not applicable to goods which are determined to be a good of a NAFTA party for marking purposes under Part 102 of the Customs Regulations.

Customs has determined that 19 CFR 12.130 will be applied to determine the country of origin of all imported articles which are classified in Section XI of the Harmonized Tariff Schedule of the United States (HTSUS), or to any imported article classified outside of Section XI, HTSUS, under a subheading which has a textile category number associated with it. Because the subject merchandise is classified under a subheading which has a textile category number associated with it, 19 CFR 12.130 applies in making the country of origin determination.

Section 12.130(b) of the Customs Regulations 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 U.S.

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(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 U.S.

(v) The value added to the article or material in each foreign territory or country, or insular possession of the U.S., compared to its value when imported into the U.S.

The merchandise at issue enters Canada as a cap. The processing operations performed in Canada are minor assembly operations which do not change the fundamental character of this merchandise as a cap; this processing merely adds an additional feature, the netting, to the cap. The processing done in Canada cannot be described as substantial manufacturing or processing operations. Consequently, the last substantial transformation occurs in China, and the country of origin for this merchandise is China.

HOLDING:

The country of origin of the merchandise at issue is China.

The sample is being returned under separate cover.

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
Commercial Rulings Division