Internal Advice request on the classification and country oforigin of diapers.

HQ 953132 April 26, 1993 CLA-2 CO:R:C:T 953132 HP CATEGORY: Classification TARIFF NO.: 6209.20.5040 Mr. Steven A. Knox District Director U.S. Customs Service Second and Chestnut Streets Philadelphia, PA 19106 RE: Internal Advice request on the classification and country of origin of diapers. Dear Mr. Knox: This is in reference to a shipping container of cloth diapers detained by you in March, 1992. After consulting with FNIS Ann White and the Office of Trade Operations, we have agreed to treat the importer's request for review as a Request for Internal Advice. Please reference your Entry Number 1101-92- 433-0911679-6, dated March 20, 1992, detained March 26, 1992. FACTS: The merchandise at issue is described by the importer as follows: 100% cotton fabric, single ply with sewing lines (to hold stitches) in roll form would be imported into Jamaica from a third country [in this case China]. Details of diaper manufacturing process - Cloth is received in 900 foot long by 30" width [rolls]. Cloth is single ply, single width. - Cloth is laid out on a 48 foot long table, straightened and flattened out. - A pattern is placed on the cloth and outlined in washable marking pen. It is then cut lengthwise. - Two layers of cloth are used per diaper. - A bundle of 10 dozen pieces of cloth are rolled up and delivered to a storage shelf for distribution to sewing station operators who fold the cloth into shape and sew the two center panel stitches only. - Goods are then looked at by a Q.C. inspector, moved to the Chief inspector[']s station and after approval they are delivered to a second sewing station which trims and hems the top and bottom. - Goods are inspected again. If approved they are moved to a third sewing station for bar tacking of all four corners. - Goods are then moved to trimming and final inspection. - The diapers are then moved to another section for folding and packaging in one dozen lots. They are then moved to a pressing machine for packing in 50 dozen bundles. * * * Diaper Specifications - 100% gauze cotton woven prefolded diapers, bartacked. - Six layers thick in the middle and four layers thick on the sides, sewn in the middle, hemmed, and bartacked. - Measurement: 12" x 16" - Diapers to be used by infants with age equivalent ranging from newborn to two years. Diapers are sold to diaper services. ISSUE: How are these goods classified under the HTSUSA? What is there country of origin for quota/visa purposes? LAW AND ANALYSIS: Classification The General Rules of Interpretation (GRIs) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part, that such "classification shall be determined according to the terms of the headings . . . ." Heading 6209, HTSUSA, provides for babies' woven garments and clothing accessories. The diapers at issue are appropriately classified herein. Country of Origin Textile commodities produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that: . . . a textile product . . . which consists of materials produced or derived from, or processed in, more than one foreign . . . country shall be a product of that foreign . . . country 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. Customs has long held that producing diapers from plain cotton fabric suitable for multiple uses is considered a substantial transformation when the manufacturing and processing operations include, inter alia, cutting to length and width or length alone, complex folding to create the diaper's unique multi-layer middle portion, hemming and/or overlocking the edges, and finishing and packaging. HRL 950849 of March 24, 1992; HRL 953078 of January 25, 1993. Contra HRL 087950 of January 9, 1991; HRL 088321 of March 7, 1991 (merely cutting fabric into squares and hemming insufficient to constitute substantial manufacturing process). As was demonstrated by the importer at conference with the Assistant Commissioner, Commercial Operations and members of my staff, the Chinese fabric has regular lines of either differing weave or high density which have no use other than as markers to be used in the cutting, folding and sewing of the diapers. It is our opinion that the weave structure of the fabric confirms the fact that the material is intended for use as diapers. The changing of the weaves is performed at additional cost and for the specific purpose of creating markers for folding. As a result, no substantial transformation takes place. The diapers are therefore considered a product of China. HOLDING: As a result of the foregoing, the instant merchandise is classified as woven cotton diapers of China, classified under subheading 6209.20.5040, HTSUSA, textile category 239. 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 bilateral agreements which are subject to frequent negotiations and changes, to obtain the most current information available, we suggest that the importer check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at the 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, the importer should contact the local Customs office prior to importing the merchandise to determine the current status of any import restraints or requirements. 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 177.9(b)(1), Customs Regulations (19 C.F.R. 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 C.F.R. 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 177.2, Customs Regulations (19 C.F.R. 177.2). Sincerely, John Durant, Director Commercial Rulings Division