HQ 955799: Country of origin determination of knapsacks, pouches and carry-alls; fabric and components are manufactured and cut inTaiwan and sewn together in China; 19 CFR 12.130; HRLs 952642,951899 and 951481

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                


                            HQ 955799


                         April 28, 1994


CLA-2 CO:R:C:T 955799 NLP

CATEGORY: Classification

Ms. Denise Kelly
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, FL  33126-2022

RE:  Country of origin determination of knapsacks, pouches and
     carry-alls; fabric and components are manufactured and cut  in
Taiwan and sewn together in China; 19 CFR 12.130; HRLs      952642,
951899 and 951481

Dear Ms. Kelly:

     This is in response to your letter of January 14, 1994, in
which you requested a country of origin determination for
knapsacks, pouches and carry-alls.  Samples of the articles were
submitted for our examination and they will be returned to you with
this ruling.

FACTS:

     The articles at issue are described as knapsacks, pouches and
carry-alls.  The first article at issue is a knapsack, style J177. 
It is constructed of cotton denim fabric and it is secured by a
drawstring closure.  This closure is located at the top of the sack
and may be concealed by a foldover flap.  Attached to the flap is
a metal snap swivel closure.  The knapsack has a front zippered
pocket decorated with a sewn-on flower design and two adjustable
back-straps with adjustable metal buckles that allow the knapsack
to be worn on the back or over one shoulder.  

     The cotton fabric from which this article is made is woven,
dyed, printed, cut and finished in Taiwan.  The other components
are also manufactured in Taiwan.  The cut fabric and the other
components are sent to China where they are assembled by sewing
into the completed knapsacks and packed in polybags and cartons
for shipment to the U.S.  The denim fabric is also stonewashed in
China.  The costs incurred in Taiwan per dozen items amount to
68.51% of the total costs of the knapsack.  The costs incurred in
China represent 31.49% of the total costs of the knapsack.




     The second article, style L1655, is a rectangular shaped pouch
that is made of nylon and measures approximately 6 inches in length
by 9 inches in width.  It has a zipper closure and a 
3/4 inch nylon band is sewn on to the front of the pouch directly
underneath the zipper.  The name "Estee Lauder" is stitched on the
nylon band.  

     The components and fabric of this pouch are manufactured and
cut in Taiwan and are sent to China for assembly by sewing into
completed pouches.  The pouches are packed in polybags and cartons
and shipped to the U.S.  The costs incurred in Taiwan per dozen
items represent 64.02% of the total costs of the pouches.  The
costs incurred in China represent 35.98% of the total costs of the
pouch.

     The third article is identical in design and construction to
the above described pouch.  The only difference between the pouches
in that the name "Drakkar Noir" is printed on the front of this
pouch.  The costs incurred in Taiwan per dozen pouches  represent
63.15% of the total costs of the pouches.  The costs incurred in
China represent 36.85% of the total costs of the pouches.

     The fourth article, style P420T4, is an over-sized duffle-
like travel or sports carry-all.  It is constructed of nylon with
PVC-backing.  The bag has two carrying straps that are attached to
the front and back panels.  It has an adjustable shoulder strap
that is secured to the side panels and a nylon zipper closure which
covers the length of the top panel.  Nylon mesh fabric covers one
side panel and forms a pocket.  The edges of the side panels and
bottom front panel are trimmed with plastic piping.

     The fabric is manufactured and die-cut in Taiwan and all of
the other components, including the polybags, are also manufactured
in Taiwan.  The fabric and components are sent to China for
assembly by sewing.  The finished articles are then packed in
cartons for shipment to the U.S.  The costs incurred in Taiwan per
dozen bags repesent 76.46% of the total costs of the bags.  The
costs incurred in China represent 23.54% of the total costs of the
bags.

ISSUE:

     What is the country of origin of the knapsacks, pouches and
travel bags?

LAW AND ANALYSIS:   

     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 or 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 for 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) of the 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) 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 onto the U.S.


     Section 12.130(e) of the Customs Regulations sets forth
criteria which aid us in determining whether an article has been
subjected to certain manufacturing or processing operations which
serve to substantially transform an article into a new and
different article of commerce.  Specifically, Section
12.130(e)(1)(iii) and (iv) are relevant in the instant case.  This
Section provides that:

          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:

          *         *         *         *         *

     (iii) Weaving, knitting or otherwise forming fabric;        

     (iv)  Cutting of fabric into parts and the assembly of those
           parts into the completed articles; . . . 

     We have previously held that cutting of fabric into pattern
pieces constitutes a substantial transformation of the fabric,
resulting in the apparel pieces becoming a product of the country
where the fabric is cut.  See, Headquarters Rulings Letter (HRL)
951437, dated July 17, 1992.  Customs has also held that the mere
assembly of goods, entailing simple combining operations, trimming
or joining together by sewing is not enough to substantially
transform the components of an article into a new and different
article of commerce. For example, in HRL 952642, dated May 10,
1993, Customs held that the assembly process of sports bags,
knapsacks and insulated lunch bags, which involved the sewing
together of material that was manufactured and cut in Taiwan and
components that were manufactured in Taiwan, did not 
result in a substantial transformation.  The operations performed
in Taiwan were more extensive than the simple sewing operation
performed in China.  Furthermore, a significant part of the cost
of the bags accrued from operations performed in Taiwan.  
Moreover, in HRL 951889, dated October 31, 1992, we held that the
assembly of luggage panels, zippers, grommets, piping webbing,
labels and packaging materials into luggage and tote bags did not
involve sufficient skill or complexity to constitute a substantial
transformation.  Finally, in HRL 951481, dated July 31, 1992, nylon
fabric, thread, binding, zippers, webbing, trim and hang tags were
die-cut in Taiwan and these materials were 
shipped to China for assembly.  We held that the manufacture of
the raw materials and the designing and cutting operations were
the factors which contributed most to the creation of the knapsacks
and the country of origin was determined to be Taiwan.



     In the instant case, the fabric used to construct the
knapsacks, pouches and travel bags is cut in Taiwan and this
materially alters the fabric into designated component pieces.  
The assembly operations to be performed in China are mere combining
and sewing operations and do not possess the requisite degree of
complexity to be deemed substantial manufacturing processes for
purposes of conferring country of origin status.  In assembling the
component pieces, no great degree of skill or advanced technology
is required, nor is tailoring involved.  In addition, the greatest
cost in producing these articles is incurred in Taiwan.  We note
that the stonewashing of the knapsack in China does not
substantially transform the article as, in the instant situation,
it is akin to a finishing operation. See, 19 CFR 12.130(e))(2)(iv). 
Thus, the country of origin of these articles is Taiwan as that is
where the fabric was manufactured and cut into specific parts and
where the articles last underwent a substantial transformation.  

HOLDING:

     The country of origin for the knapsack, pouches and travel
bag is Taiwan.

     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
                                   Commercial Rulings Division