The Country of Origin of Handbags produced in Italy and Morocco

N223697 July 16, 2012 CLA-2-42:OT:RR:NC:N4:441 CATEGORY: Country of Origin Donna L. Shira Sharretts, Paley, Carter & Blauvelt, P.C. Seventy-five Broad Street New York, NY 10004 RE: The Country of Origin of Handbags produced in Italy and Morocco Dear Ms. Shira: This is in reply to your letter dated June 26, 2012, requesting a country of origin determination for handbags which will be imported into the United States. Your request was on behalf of Ralph Lauren Corp. FACTS: The subject of this ruling is three handbags referred to as styles 435174967, 435174695 and 435171071. The articles are constructed from genuine leather. You have submitted samples of the unassembled component pieces for each style and photographs of each completed handbag. Your samples are being returned to you. The manufacturing operations for the handbags are as follows: The leather, which is of Italian origin, is cut to shape and form in Italy. The textile linings are also cut in Italy. The pre-cut components are then sent to Morocco where the leather is skived (that is, pared to reduce thickness) and where partial assembly operations of sewing and gluing occur. The subassemblies are then packed and shipped back to Italy where the bags are ultimately assembled. The linings originate in England, certain hardware pieces are from China, and the leather originates in Italy, as do the copper locks of style 435171071 and the stirrup clips and chains of styles 435174967 and 435174695. ISSUE: What is the country of origin of the subject merchandise? LAW AND ANAYSIS: Section 134.1(b), CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of [the marking laws and regulations].” For country of origin marking purposes, a substantial transformation of an article occurs when it is used in manufacture, which results in an article having a name, character, or use differing from that of the article before the processing. However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). You argue that the subject handbags are substantially transformed in Italy. We agree. Customs and Border Protection (CBP) has previously held that cutting materials to defined shapes or patterns suitable for use in the assembly of a finished article, as opposed to mere cutting to length and/or width which does not render the article suitable for a particular use, constitutes a substantial transformation. See Headquarters Ruling Letters (HRL’s) H005728, dated April 19, 2007, HQ 562156, dated July 5, 2001, and HQ 734539, dated June 8, 1992. Based on the information provided, we find that the leather undergoes a substantial transformation in Italy as a result of cutting to shape and form the components for later assembly into the finished articles. Furthermore, we find that the operations performed in Morocco do not constitute a further substantial transformation of the Italian pre-cut components. The Morocco operations consist of merely skiving, gluing and sewing. CBP has long held that the mere assembly of parts will not necessarily constitute a substantial transformation. See C.S.D. 80-111, dated September 24, 1979, in which the U.S. Customs Service (now, CBP) found that the U.S. assembly of imported ceiling fan components on an assembly line did not constitute a substantial transformation. Ceiling fan motors underwent a 20-step assembly and the fan blades underwent a 5-step assembly. See also HRL 734539, dated June 8, 1992, regarding the country of origin of clutches and handbags. Since the skiving and pre-assembly does not amount to a further substantial transformation of the Italian-origin pre-cut components, it is unnecessary to decide if the final assembly operations performed in Italy also constitute substantial transformation. HOLDING: The country of origin of the handbags is Italy. 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 a ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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 CBP, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2. A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Vikki Lazaro at 646-733-3041. Sincerely, Thomas J. Russo Director, National Commodity Specialist Division