The Country of Origin of Sequined Fabrics

HQ 088442 APRIL 25, 1991 CLA-2 CO:R:C:T 0 PR CATEGORY: Classification TARIFF NO.: Patrick D. Gill, Esquire Rode & Qualey 295 Madison Avenue New York, New York 10017 RE: The Country of Origin of Sequined Fabrics Dear Mr. Gill: This is in reply to your submission on behalf of Lace of France, Inc., concerning the country of origin of certain fabrics. FACTS: Fabric is manufactured and cut to length in France and then sent to China where beads or sequins are applied for decoration purposes. It is then exported to the United States. Each sample is a highly decorative openwork fabric with a preconceived inwrought floral design. One sample represents the fabric prior to the application of beads or sequins. The other sample has sequins outlining the flowers, or portions thereof. The sequins take up less than 10 percent of the outer surface of the sample. Please note that Customs can only rule on samples submitted for our examination. ISSUE: The issue presented is whether the application of sequins to fabrics in China will cause those fabrics to become products of that country. LAW AND ANALYSIS: While the fabrics in question are described as "plain lace" fabrics, it appears that the samples submitted were probably knit on a raschel machine. Since knit fabrics are not considered lace under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), the samples, if knit, are not lace fabrics for tariff purposes. Section 12.130, Customs Regulations (19 CFR 12.130) provides, in pertinent part, as follows: (b) Country of origin. For the purpose of this section * * * a textile or textile product, subject to section 204, Agricultural Act of 1956, as amended, imported into the customs territory of the United States shall be a product of a particular foreign territory or country, or insular possession of the U.S., if it is wholly the growth, product, or manufacture of that foreign territory or country, or insular possession. However, * * * a textile or textile product, subject to section 204, which consists of materials produced or derived from, or processed in, more than one foreign territory or country, or insular possession of the U.S., shall be a product of that foreign territory or country, or insular possession 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. * * * (d) Criteria for determining country of origin. The criteria in paragraphs (d)(1) and (2) of this section shall be considered in determining the country of origin of imported merchandise. These criteria are not exhaustive. One or any combination of criteria may be determinative, and additional factors may be considered. (1) 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. (2) 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 into the U.S. Much of the information which 12.130(b)(2) indicates may be considered in determining whether work done in a second country amounts to a substantial manufacturing or processing operation has not been submitted. However, based on an examination of the two samples, it is apparent that neither of the requirements of 12.130(d) have been met. HOLDING: The attachment of sequins in China to a lace-like fabric manufactured in France does not, in this instance, amount to a substantial transformation within the purview of 12.130, Customs Regulations. Accordingly, the country of origin of the imported fabric remains France. Section 177.9(b)(1), Customs Regulations (19 CFR 177.9 (b)(1), states that a ruling 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. Accordingly, the holding set forth above applies only to the specific factual situation and the merchandise identified in the ruling request. 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. If there is a change in the facts furnished, the holding in this ruling may be affected. In such an event, 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