HQ 952642: Country of origin of sports bags, knapsacks, and insulatedlunch bags; 19 CFR 12.130; fabric manufactured and cut in Taiwan;components manufactured in Taiwan; fabric and componentsassembled by sewing in China; mere assembly is not substantialtransformation

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 952642

                          May 10, 1993

CLA-2 CO:R:C:T: 952642 BC

CATEGORY:  Classification

Maureen Shoule
J.W. HAMPTON, JR. & CO., INC.
15 Park Row
New York, New York 10038

RE:  Country of origin of sports bags, knapsacks, and insulated
lunch bags; 19 CFR 12.130; fabric manufactured and cut in Taiwan;
components manufactured in Taiwan; fabric and components
assembled by sewing in China; mere assembly is not substantial
transformation

Dear Ms. Shoule:

     This responds to your letter of September 11, 1992, on
behalf of Access Bag N' Pack, wherein you requested a binding
ruling on the country of origin of sports bags, knapsacks, and
insulated lunch bags, the fabric and components of which were
manufactured and cut in Taiwan for assembly by sewing in China. 
You submitted samples for our examination.  (Please note that
your letter indicates, in the first paragraph, that the bags at
issue are insulated bags, sports bags, and knapsacks; yet, in the
details of the manufacturing process, on page 1, you indicate
that they are insulated lunch bags, belt bags, and tote bags. 
For purposes of this ruling, we will assume that the bags are
insulated lunch bags, sports bags, and knapsacks, as identified
by style number in the first paragraph of your letter.)

     Your letter included a request for a ruling on a marking
question.  That issue was turned over to our Value and Marking
Branch.  We understand that a ruling responding thereto was
issued on January 13, 1993 (HRL 734823).

FACTS:

     The merchandise at issue is described as sports bags,
knapsacks, and insulated lunch bags made of nylon material,
sheeting, padding, zippers, webbing, trim, buckles, thread, and
hang tags.  The sports bag is style #1450; the knapsack is style
#7411; and the insulated lunch bags are produced in three styles:
#45101, #45081, and #45631.  The nylon and insulating material is
manufactured and then die-cut to proper shapes in Taiwan.  All
other components are also manufactured in Taiwan, including the
cartons for packing.  All cut material and other components are
assembled by a simple sewing process by unskilled labor in China. 
The assembled bags are packed in the cartons and shipped to the
United States.

     You provided a cost breakdown (per dozen bags of each style)
for the bags resulting from operations performed respectively in
Taiwan and China.  For the sports bag (style #1450), 75.50% of
the cost of the bags results from operations performed in Taiwan,
while the cost figure for China is 24.50%.  For the knapsacks
(style # 7411), 69% of the cost of the bags results from
operations performed in Taiwan, while the figure for China is
31%.  For the three styles of insulated lunch bags, the cost
breakdown is as follows:  Style #45101 - 78.50% Taiwan and
21.507% China; style #45081 - 73.10% Taiwan and 26.90% China; and
style 45631 - 73.90% Taiwan and 26.10% China.

ISSUE:

     What is the country of origin of the sports bags, knapsacks,
and insulated lunch bags at issue, Taiwan or China?

LAW AND ANALYSIS:

Country of Origin

     The country of origin regulations for textiles and textile
products are contained in section 12.130, Customs Regulations (19
CFR 12.130).  Section 12.130 provides that a textile or textile
product which consists of materials produced or derived from, or
processed in, more than one country is considered to be a product
of that foreign 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 a substantial manufacturing process into
a new and different article of commerce.  Pursuant to section
12.130(d)(2), the following factors are evaluated in determining
whether merchandise has been subjected to a substantial
manufacturing or processing operation: the physical change in the
article; the time involved in the manufacturing operation; the
complexity of the operations, the level or degree of skill and/or
technology required; and the value added to the article.

     While the bags are assembled and packed in China, the nylon
material, insulating material, and other components are
manufactured in Taiwan; the former materials are also die-cut to
shape there.  These operations performed in Taiwan are more
extensive than the simple sewing operation performed in China. 
Customs has long 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.  (See
Headquarters Ruling Letters (HRL's) 082747 (February 23, 1989)
and 082787 (March 9, 1989) regarding, respectively, the assembly
of jeans and a jogging suit.)  Further, that part of the cost of
the five styles of bags at issue accruing from operations
performed in Taiwan is: 75.50% (#1450), 69% (#7411), 78.50%
(#45101), 73.10% (#45081), and 73.90% (#45631).

     Based on the foregoing facts, we conclude that the
operations performed in China do not result in a substantial
transformation.  Two recent Customs rulings are in accord.  In
HRL 951899, dated October 31, 1992, we issued a country of origin
determination for certain tote bags and luggage.  In that
decision, luggage panels, zippers, grommets, piping, webbing,
labels, and packaging materials were shipped to China for
assembly into finished articles.  We ruled that this assembly of
materials did not involve sufficient skill or complexity to
constitute a substantial transformation.  In HRL 951481, dated
July 31, 1992, we issued a country of origin determination with
respect to certain knapsacks/backpacks.  There, nylon fabric,
thread, binding, zippers, webbing, trim, and hang tags were die-
cut in Taiwan to the proper shapes for stitching.  These
materials were shipped to China for assembly.  We concluded that
the manufacture of the raw materials and the designing and
cutting operations were the factors which contributed most to the
creation of the finished articles.  

Quota Category

     You requested a binding ruling on the quota category
applicable to the bags at issue.  The bags are classifiable under
heading 4202, Harmonized Tariff Schedule of the United States
Annotated (HTSUSA).  The sports bags and knapsacks are explicitly
set forth in heading 4202, HTSUSA, and are covered under
subheading 4202.92, HTSUSA, as "[t]ravel, sports and similar
bags."  Additional U.S. Note 1, Chapter 42, HTSUSA, defines the
subheading provision for "travel, sports and similar bags" as
covering "goods . . . of a kind designed for carrying clothing
and other personal effects during travel, including backpacks and
shopping bags of this heading . . ."  The lunch bags at issue are
similar bags used to carry and preserve food during travel. 
Headquarters Ruling Letter 950653 (December 4, 1991) classified
insulated lunch bags under subheading 4202.92.3030, HTSUSA.  The
bags and knapsacks at issue in the instant case would also be
classified under that subheading.  Consequently, the textile
quota category would be 670.

HOLDING:

     The country of origin of the sports bags, knapsacks, and
insulated lunch bags at issue is Taiwan.  The textile quota
category is 670.

     The designated textile and apparel category may be
subdivided into parts.  If so, visa and quota requirements
applicable to the subject merchandise may be affected.  Since
part categories are the result of international and bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available, we
suggest that you check, close to the time of shipment, the Status
Report on Current Import Quotas (Restraint Levels), an internal
issuance of the U.S. Customs Service, which is available for
inspection at your local Customs office.

     Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories, you should contact your local
Customs office prior to importation of this merchandise to
determine the current status of any import restraints or
requirements.

     The holding set forth above applies only to the specific
factual situation and merchandise identified in this ruling
request.  This limitation 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 section 177.9(b)(1), Customs Regulations, 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, in that event, 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