CLA-2 CO:R:C:T 956256 HP
Mr. Mark J. Angus
The Leather Factory, Inc.
P.O. Box 50429
Fort Worth, TX 76105
RE: Country of origin of braided textile strips.
Dear Mr. Angus:
This is in reply to your letter of March 29, 1994, to our
Dallas, Texas, office. That letter concerned the country of
origin of braided strips, produced in Taiwan and China.
FACTS:
The merchandise at issue consists of braided synthetic
horsehair strips, imported in rolls. You state the appropriate
subheading for this merchandise is under sunbheading
5608.10.3090, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA), and do not request that we verify the
classification.
The fibers of polypropylene are made in Taiwan. After the
fibers are braided in Taiwan, the braids are sent to China to be
stitched together in a horizontal row of twelve braids. The
completed product is then returned to Taiwan, then shipped to you
in Dallas, Texas. You state that 97% of the manufacturing cost
is Taiwanese.
You state that the product currently requires a Taiwanese
visa. You now question whether the completed product can be
shipped to the U.S. directly from the Chinese assembler's
warehouse in Hong Kong and still qualify for a Taiwanese visa.
ISSUE:
Whether the country of origin of the completed product is
considered China or Taiwan?
LAW AND ANALYSIS:
Textile commodities produced in more than one foreign
country are subject to the country of origin requirements
delineated in section 12.130 of the Customs Regulations (19
C.F.R. 12.130). These regulations provide that:
. . . a textile product . . . which consists
of materials produced or derived from, or
processed in, more than one foreign . . .
country shall be a product of that foreign .
. . country where it last underwent a
substantial transformation.
12.130(b). A textile product undergoes a substantial
transformation when it is ". . . transformed by means of
substantial manufacturing or processing operations into a new and
different article of commerce."
Section 12.130 of the regulations outlines the criteria used
to determine the country of origin for textiles and textile
products. Specifically, this provision of the regulations is
considered in determining whether a textile product has undergone
substantial manufacturing or processing operations, and what
constitutes a new and different article of commerce. The factors
considered are not exhaustive. In fact, "one or any combination
of criteria may be determinative, and additional factors may be
considered." In determining whether merchandise has undergone
substantial manufacturing or processing operations, we consider
the (1) physical change in the material or the article; (2) time
involved; (3) complexity of the operations; (4) level or degree
of skill and/or technology required; and (5) value added to the
article in each country.
As we stated, for a manufacturing operation to change the
country of origin of a good, such operation must be considered
"substantial." It is clear from examination of the samples, and
from your valuation statement above, that the Chinese operation,
a three-ply thread run through the row of braids, is a simple
joining or assembly operation. As such, it is our opinion that
the country of origin for the completed product remains Taiwan.
With respect to your question concerning the direct shipment
of the finished product from Hong Kong to the United States, we
cannot answer as to the restrictions imposed on the exportation
of goods by foreign governments. Clearly, there is a potential
problem in obtaining approval from China or Hong Kong for export
from either of these countries of textile products bearing a
third country of origin label. U.S. Customs, however, will
accept a Taiwanese visa for the merchandise manufactured in the
manner described herein.
HOLDING:
As a result of the foregoing, the instant merchandise is
considered a product of Taiwan.
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 177.9(b)(1),
Customs Regulations (19 C.F.R. 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 C.F.R. 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 177.2,
Customs Regulations (19 C.F.R. 177.2).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division