HQ 087950: Country of origin of diapers. Mere cutting of fabric into squares measuring 27 inches by 27 inches does not constitute a substantial transformation.

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 087950

                         January 9, 1991



CLA-2 CO:R:C:G 087950 CRS

CATEGORY:  Classification

Mr. Bryce Haynes
Executive Vice President
The Bibb Company
P.O. Box 4207
Macon, GA 31208

RE:  Country of origin of diapers.  Mere cutting of fabric into
     squares measuring 27 inches by 27 inches does not constitute
     a substantial transformation.

Dear Mr. Haynes:

     This is in reply to your letter dated September 6, 1990, in
which you requested a ruling concerning the country of origin of
cotton diapers.

FACTS:

     The merchandise in question consists of a 100 percent cotton
birdseye fabric measuring 27 inches by 27 inches.  The fabric is
made and bleach finished in the People's Republic of China (PRC).
From the PRC the fabric is shipped to Thailand in rolls of 300-
400 yards in length where the fabric, which has no lines of
demarcation, is cut and sewn into squares.  In this state, the
fabric is packaged and sold for use as diapers.

     With regard to the processing of the fabric in Thailand you
have provided the following information:

     A.   The fabric is unrolled on a table approximately 30 feet
          in length.  Allowing for the surging operation that
          comes later the "fabric lay" length will be a multiple
          of 27" up and down the table with a 27" x 55" template.
          This operation requires about 38 demarcation lines
          across the 55" width.  After the markings are complete
          the operator will then cut across the 5" or 6" high
          "fabric lay" at every 27" marking.  The sizes of each
          stack is now 27" x 55".  The operator then cuts across
          each of these stacks at the very center after marking
          each stack using the template.

     B.   From the cutting table the stacks of 27" x 27" diapers
          are transported to a surging operation.  This operation
          entails sewing across each raw-edge on the diaper.
          After this operation the size of the diaper is
          approximately 27" x 27".

     C.   From the surging operation (sewing) the diapers are
          sent to the inspection and folding stations.  The
          diapers are inspected for fabric and sewing defects at
          the time they are hand folded.  These operators place
          in stacks of twelve (12) and folds (sic) the stack
          into a 7" x 9" configuration ready for packaging.

     D.   The folded stacks are placed onto a trolley and sent to
          a packaging station.  The stacks are then placed into
          printed polyethylene bags, one dozen diapers per bag.
          The bag is sealed at the end.  As the bags are sealed
          they drop on a conveyor to be loaded into corrugated
          boxes for shipment.

After processing the merchandise in question is shipped to the
United States through the port of Savannah.

ISSUE:

     Whether the cutting and sewing of Chinese fabric in Thailand
constitutes a substantial manufacturing operation such that the
merchandise is deemed to have been substantially transformed
pursuant to 19 CFR 12.130.

LAW AND ANALYSIS:

     Pursuant to section 12.130, Customs Regulations (19 CFR
12.130), a textile or textile product which consists of materials
produced or derived from, or processed in, more than one foreign
territory or country shall be a product of that foreign territory
or 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 substantial manufacturing or processing operations into a new
and different article of commerce.

     Section 12.130(d) establishes criteria for determining
whether an article has been substantially transformed.  However,
the criteria set forth in 19 CFR 12.130(d) are not exhaustive;
one or any combination of these criteria may be determinative and
additional factors may be considered.

     According to 19 CFR 12.130(d)(2), the following factors are
to be considered in determining whether merchandise has been
subjected to substantial manufacturing or processing operations:
the physical change in the material or article, the time involved
n the manufacturing or processing operations, the complexity of
the operations, the level or degree of skill and/or technology
required, and the value added to the article.

     Nevertheless, section 12.130(e)(2) provides that an article
will usually not be considered to be a product of a particular
country merely by having undergone:

     (ii) Cutting to length or width and hemming or overlocking
     fabrics which are readily identifiable as being intended for
     a particular commercial use....

In this case, the fabric is merely cut into squares and the edges
hemmed.  Consequently, Customs' is of the view that the operation
operations to which the fabric is subjected are insufficient to
constitute a substantial manufacturing process under 19 CFR
12.130.

HOLDING:

     The cutting and sewing operations performed in Thailand do
not constitute a substantial transformation as required by 19 CFR
12.130.  The country of origin of the instant merchandise is the
People's Republic of China.

     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