HQ 0082369 - Country of origin of certain sweaters - United States International Trade Commision Rulings

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HQ 082369

January 24, 1989

CLA-2 CO:R:C:G 082369 SM 076187

CATEGORY: CLASSIFICATION

TARIFF NO: (no tariff number used)

Francis W. Foote, Esq.
Siegel, Mandell & Davidson, P.C.
Suite 300
665 Fifteenth Street, N.W.
Washington, D.C. 20005

RE: Country of origin of certain sweaters

Dear Mr. Foote:

Your letter of May 25, 1988, on behalf of XXXXXXXXXXXXX, requests a binding country of origin ruling for certain sweaters. You previously requested a ruling for an identical transaction that was considered under file 076187. However, you withdrew the request before a ruling was issued, and that file was closed.

Pursuant to the Freedom of Information Act, 5 U.S.C. { 552 (1982), and 19 C.F.R. { 177.2(b)(7) (1988), you request that your client's name and address as well as the name of the second country or territory involved in the prospective trans- action, XXXXXXXXXXXXX be treated as privileged or confidential information, the disclosure of which would tend to cause com- petitive harm to your client. We agree to preserve the confi- dentiality of these two pieces of information by deleting them from either your letter of August 12, 1988, or from this re- sponse before either is released to the public.

FACTS:

You state that the sweaters, sleeved and sleeveless, will be produced through operations carried out in two dif- ferent foreign countries or territories, and you ask us to determine which of the two will be considered the country of origin in accordance with the textile country of origin regulations, 19 C.F.R. { 12.130. The operations you describe may be summarized as follows. In South Korea, Taiwan, or China yarn will be knit on flat or circular knitting machines into continuous lengths of piece goods of four different specifications. The piece goods are so made that the pulling of threads will result in their separating into distinct
panels that will be used to make sweater fronts or backs, sleeves, neck ribbing, or armhole ribbing, respectively, depending on the specifications. In the second country XXXXXXXXXXXXXXXXXXX the piece goods will be separated into panels. Shoulder, neckline, armhole, and sleeve cap edges will be shaped by cutting. Seams will be joined, and the finished sweaters will be inspected, pressed, and boxed.

You have submitted samples of the piece goods, cut parts, and finished sweaters.

Your position is that application of the textile country of origin regulations to the proposed transaction results in the conclusion XXXXXXXXX will be the country of origin of the sweaters. You argue, specifically, that application of 19 C.F.R. { 12.130(e)(1)(iv), providing that the country where fabric is cut into parts and the parts assembled into a completed article is generally considered the country of origin of the article, requires the conclusion XXXXXXXXX is the country of origin of the sweaters. You also believe that the operations to be performed XXXXXXX are more substantial than the joining of knit-to-shape parts which is specified in 19 C.F.R. {12.130(e)(2)(iii) not to result in a change in country of origin.

ISSUE:

Do the operations performed XXXXXXX result in a change in country of origin of South Korean, Taiwanese, or Chinese piece goods so XXXXXXXXX is the country of origin of the finished sweaters within the meaning of 19 C.F.R. { 12.130?

LAW AND ANALYSIS:

The textile country of origin regulations provide, at 19 C.F.R. { 12.130(b), that textile products processed in more than one foreign country or territory shall be products of that country where they last underwent a substantial transfor- mation. Section 12.130(e)(1)(iv) provides that an article will usually be a product of the country where it has under- gone, prior to importation, cutting of fabric into parts and the assembly of those parts into the completed article.

This subsection thus requires that what is cut into parts and assembled be fabric. We do not consider the sub- mitted samples referred to as piece goods to be fabric within the meaning of this subsection. Rather, they consist of a series of panels with rib-knit bands at the lower edges,
separated by lines of stitching that will easily unravel when pulled. Although you emphasize that until further cutting the use of the panels as either sweater fronts or sweater backs is not determined, it is obvious that the panels can reasonably be used only as the front or back panels of sweaters. Realis- tically, the merchandise, as imported XXXXXXXXX, is commer- cially dedicated for use in the manufacture of sweaters. We have ruled previously that the type of "piece goods" in ques- tion here is classifiable as parts of sweaters if imported in that condition. IA 7/87, file 079657 of April 5, 1987; affirmed, file 080469 of December 21, 1987.

We have also ruled previously that the type of operation to be performed in the second country XXXXXXXXXXXXXXXXXX, does not constitute a substantial transformation within the meaning of 19 C.F.R. { 12..130(e)(1)(iv). Rather, subsection 12.130 (e)(2)(iii) is controlling here. This section provides that textile articles will usually not be products of a country or territory where they have undergone trimming and/or joining together by sewing or other means of attaching otherwise com- pleted knit-to-shape component parts produced in a single country, even when accompanied by other processes. Although some cutting of the knitted pieces is done--in order to shape the neckline, for example--to further shape the panels before final assembly of the sweaters, the rib-knit-bordered deline- ated panels are sufficiently identifiable as parts of sweat- ers and are in fact dedicated to that use at the time of their importation XXXXXXXXX. File 082161 of June 22, 1988.

HOLDING:

The sweaters will be products of South Korea, Taiwan, or China, wherever the panels are knit.

You state that you wish to schedule a conference if Customs does not agree with your position in this matter. Since we have previously ruled several times on virtually identical transactions, and since you had at least two meet- ings on your submission of a request for a ruling on the identical transaction, file 076187, no further conferences would be helpful.

Sincerely,

John Durant, Director
Commercial Rulings Division

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