HQ 086779: Clarification of HRL 086549. Country of origin of diapers; cut; sewn

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 086779

                          April 25, 1990




     CLA-2 CO:R:C:G  086779  HP

     CATEGORY:  Classification

     Ms. Grace Howe
     President
     Tego Limited
     5959 Topanga Canyon Blvd.
     Suite 380
     Woodland Hills, CA 91367

     RE:  Clarification of HRL 086549.  Country of origin of
     diapers; cut; sewn

     Dear Ms. Howe:

          This is in reference to HRL 086549 of March 13,
     1990, in which we determined country of origin for duty
     purposes of diapers under the U.S. - Canada Free Trade
     Agreement.  Our Blaine, Washington, office has re-
     quested we extend this analysis for textile quota/visa
     purposes.

     FACTS:

          The merchandise at issue consists of 100% cotton
     babies' diapers.  The following tables describe the
     manufacturing processes.

            CHINA PRODUCTION STEPS (CAD$ 2.915/DOZEN)

     1.   100% cotton cloth is woven.
     2.   The cloth is shipped to Canada on large rolls.

           CANADA PRODUCTION STEPS (CAD$ 3.2714/DOZEN)

     1.   Two layers of fabric are placed onto the cutting table.
     2.   The fabric is cut to size (24" wide x 16" long).







     3.   The sides of the two layers of fabric are folded
          over (left: 4" right: 8").
     4.   The center panels are sewn using a straight sewing
          machine.
     5.   The sewn fabric is taken to a serging machine,
          where the top and bottom edges are trimmed and
          overedged.
     6.   The threads from all edges are trimmed, as a
          trailer thread of at least -
" is required.
     7.   The diaper is inspected.
     8.   The completed merchandise is packaged into cartons
          and shipped.

     ISSUE:

          Whether the processes taking place in Canada are
     sufficient to change the country of origin for
     quota/visa purposes from China?

     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 Cus-
     toms Regulations (19 C.F.R. 12.130).  These regu-
     lations provide that:

               ... a textile product ... which consists of
               materials produced or derived from, or pro-
               cessed in, more than one foreign ... country
               shall be a product of that foreign ... coun-
               try 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.

          Section 12.130(e)(2) states that

                    [a]n article or material
               usually will not be considered to
               be a product of a particular for-
               eign territory or country, ... by
               virtue of merely having undergone
               any of the following:

                              * * *

                         (ii) Cutting to
                    length or width and hemm-
                    ing or overlocking fab-
                    rics which are readily
                    identifiable as being in-
                    tended for a particular
                    commercial use.... [Em-
                    phasis added.]

          It is clear that this provision does not
     disqualify the diapers from consideration as products
     of Mozambique or Zimbabwe.  Upon exportation from
     China, the merchandise is mere cotton fabric, suitable
     for multiple uses.  There is no evidence, i.e., lines
     of demarcation, that would aid the examiner in
     determining that the fabric is meant to be diapers.

          Since there exist no provisions which specifically
     eliminate the instant manufacturing processes from
     consideration, it is our opinion that the merchandise
     has undergone a substantial transformation in Canada.
     The merchandise changes from cotton fabric to child-
     ren's diapers as a result of Country 2's complex
     manufacturing operations.  Following the rules of
     origin stated above, therefore, Country 2 is considered
     the country of origin for quota/visa purposes.  See
     also HRL 086665 of March 23, 1990.

     HOLDING:

          As a result of the foregoing, the instant
     merchandise is considered to be a product of Canada for
     quota/visa purposes.

           This notice to you should be considered a
     clarification of HRL 086549 of March 13, 1990, as to
     the merchandise described as diapers, under 19 C.F.R.
     177.9(d)(1) (1989).








                            Sincerely,


                      JOHN DURANT, DIRECTOR
                   COMMERCIAL RULINGS DIVISION