Country of origin of a backpack; Section 102.21(c)(4),Customs Regulations

HQ 959417 July 26, 1996 CLA-2 RR:TC:TE 959417 CAB CATEGORY: Classification Roland E. Portal Pronto Cargo Brokers, Inc. P.O. Box 52-3113 Miami, FL 33152-3113 RE: Country of origin of a backpack; Section 102.21(c)(4), Customs Regulations Dear Mr. Portal: This is in response to your inquiry of May 1, 1996, requesting a country of origin determination for a backpack pursuant to Section 102.21, Customs Regulations. This request is on behalf of Excel Handbags Co., Inc. A sample was submitted for examination. FACTS: The article at issue is designed in the manner of a traditional backpack. This design includes adjustable, padded straps which fit over the wearer's shoulders. The backpack is constructed of man-made textile material with the bottom side and narrow front strip constructed of suede material. The backpack also contains exterior compartments which have zipper closures. The materials required to produce the finished backpack include the nylon material, suede, zippers, binding, webbing, and all hang tags. These materials are produced in Taiwan. All of the component pieces are cut in China. You state that minor assembly parts are also sewn in China. You do not mention which minor parts are assembled in China. From an examination of the finished backpack, Customs is assuming that what you refer to as "minor subassemblies" include the attachment of an interior pocket and small exterior side pocket with zipper to the front panel and the joining of the lining to the component pieces in China. The front panel, back panel, suede components, shoulder straps, gusset with zipper, and front pocket are exported and assembled into a finished backpack in Taiwan. If this description of the manufacturing process is incorrect, please notify this office and we will rule accordingly. ISSUE: What is the country of origin for the subject backpack? LAW AND ANALYSIS: Pursuant to the Uruguay Round Agreements Act, new rules of origin were effective on textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product is determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21. Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product in which the good is wholly obtained or produced in a single country, territory, or insular possession. As the subject bag is not wholly obtained or produced in a single country, territory, or insular possession, Section 102.21(c)(1) is inapplicable. Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section. Section 102.21(c)(2) states: Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section. Heading 4202 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), provides for, inter alia, travel, sports and similar bags. The subject backpack fits within the purview of this heading. Section 102.21(e) states "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section." 4202.92.15-4202.92.30 A change to subheading 4202.92.15 through 4202.92.30 from any other heading, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession. In this instance, the subject backpack undergoes assembly operations in China and Taiwan. Therefore, the bag is not wholly assembled in a single country and Section 102.21(c)(2) is inapplicable. Section 102.21(c)(3) provides for goods that have been wholly assembled in a single country, insular possession, or territory or which are knit to shape. Section 102.21(c)(3) is therefore inapplicable to the subject merchandise as it has not been wholly assembled in a single country, insular possession, or territory, nor is it a knit to shape good. Section 102.21(c)(4) provides the first multi-country rule. Section 102.21(c)(4), provides the following: Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred. Section 102.21(b)(6) stipulates that "minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as wholly assembled' in a single country, territory, or insular possession." In this instance, the assembly of the front and back panels, bottom panel, shoulder straps, gusset with zippers, and exterior pocket in Taiwan are not considered minor subassembly operations. The attachment of the lining to the component pieces in China and the attachment of both the interior and exterior pockets to the front panel in China are also not considered minor subassembly operations. However, when evaluating the assembly operations in both Taiwan and China pursuant to Section 102.21(c)(4), it appears that the assembly operations in Taiwan are the most important. HOLDING: Pursuant to Section 102.21(c)(4), Taiwan is the country of origin for the backpack. The holding set forth above applies only to the specific factual situation and merchandise identified in the ruling request. This position is clearly set forth in section 19 CFR 177.9(b)(1). This section states that ruling letter is issued on the assumption that all of the information furnished in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it be subsequently 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. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2. Sincerely, John Durant, Director Tariff Classification Appeals Division