Revocation of Customs Headquarters Ruling (HQ) 951210Concerning the Country of Origin of Quilts

HQ 956221 JUNE 8, 1994 CLA-2 CO:R:C:G 956221 PR CATEGORY: Classification General Manager Unique Quilts, Inc. 3195 Park Road, Suite E Benicia, California 94510 RE: Revocation of Customs Headquarters Ruling (HQ) 951210 Concerning the Country of Origin of Quilts Dear Sir or Madam: This is in reference to Customs Headquarters Ruling (HQ) 951210, of April 24, 1992, addressed to your company, concerning the country of origin of quilts. We have reviewed that ruling and determined that it is in error. Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625) (hereinafter referred to as section 265), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), Customs published a notice on May 4, 1994, in the CUSTOMS BULLETIN, Volume 28, Number 18, proposing to revoke Customs Headquarters Ruling (HQ) 951210. FACTS: According to the information submitted, the quilts are made in the following manner. In China, cotton fabrics are cut into pieces which are hand sewn together in patterns or designs to form a quilt top (face fabric). The quilt tops range in size from 1656 to 10,528 square inches and account for approximately 1/3 the total time required to produce a finished quilt. In Lesotho, the quilt top is hand-stitched to a polyester batting and a cotton fabric backing. The stitching (five to six stitches per inch) is done in designs over the entire area of the quilt. A cotton fabric binding is then machine stitched around the perimeter and then wrapped around and hand-stitched to the back of the quilt.  -2- Nothing in HQ 951210, or in the file related to that ruling, indicates where the middle polyester batting layer or the cotton backing fabric originated. Nor is there any indication how, or where, the batting and the backing were processed. ISSUE: The issue presented is which country, China or Lesotho, is the country of origin of the subject quilts. LAW AND ANALYSIS: Section 12.130, Customs Regulations (19 CFR 12.130) provides, in pertinent part, that a textile or textile product which consists of materials processed in more than one foreign country shall be a product of the 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 substantial manufacturing or processing operations into a new and different article of commerce. Section 12.130(d) provides: (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. -3- (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. In applying the above criteria, and other criteria in 12.130, it appears that the country of origin to the quilts in question may be Lesotho. What is exported from China is a rectangular-shaped fabric that has neither the identity or character of a quilt. Nor, obviously, is it useable as a finished quilt. We recognize that it may be argued that the fabric is dedicated for use in the production of a quilt. However, in our view, mere dedication to use of a fabric is usually not sufficient to establish the character or identity of that fabric as a finished quilt. The joining of the top fabric with the batting and backing fabric and the processing which results in a finished quilt is a significant change in the appearance and functional ability of the top fabric. In addition, we note that according to the submission, the time, expense, and complexity of the processing done weigh heavily in Lesotho's favor. HOLDING: Customs is unable to make a definitive country of origin determination without knowing the origin of the middle polyester batting and the cotton backing, and where and how they were processed. For example, if the polyester batting and cotton backing are also produced in China, Customs would have to examine this situation in greater detail to determine the country of origin of the quilts. No ruling on the country of origin of the quilts can be made until information concerning where the batting and backing were formed, and where and how they were processed prior to their joining with the quilt top is submitted. HQ 951210, dated April 24, 1992, is hereby revoked.  -4- In accordance with section 625, this ruling will become effective 60 days after its publication in the Customs Bulletin. Sections 177.10(b) and 177.10(c), Customs Regulations (19 CFR 177.10(b) and 177.10(c)) are not applicable to rulings or decisions published pursuant to section 625. Accordingly, the publication of this ruling neither establishes a uniform practice nor constitutes a change of practice or position by the Customs Service. Sincerely, John Durant, Director Commercial Rulings Division