HQ 0086568 - Country of origin of a baseball-style cap - United States International Trade Commision Rulings

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HQ 086568

May 30, 1990

CLA-2 CO:R:C:G 086568 CC

CATEGORY: CLASSIFICATION

Mr. Steve Hill
General Manager
Four Seasons Garment Company
1111 Western Row Road
Mason, OH 45040

RE: Country of origin of a baseball-style cap

Dear Mr. Hill:

This letter is in response to your inquiry for a country of origin determination, for quota and marking purposes, for a baseball-style cap. Samples were submitted for examination.

FACTS:

According to your submissions, fabric of Chinese origin will be cut into components there. Also, the crown panel will be sewn together and seam tape applied in China. The following components will be shipped to Sri Lanka for assembly: unassembled visor pieces and visor board, sweatband, completed crown assembly, braid, adjustable strap, and the button for the top of the crown.

In Sri Lanka, the following operations will be performed: attach button to crown, sew visor piece together, stuff visor board into pocket and close visor, apply six rows of stitches to visor, sew sweatband to crown, sew visor to crown, sew snap to crown, block cap, inspect caps, purchase packaging, and pack caps for export.

You believe that the processing done in Sri Lanka represents approximately 51 percent of the sewing labor. Also, you believe that the cap at issue is substantially transformed in Sri Lanka.

ISSUE:

What is the country of origin for quota and marking purposes for the cap at issue?

LAW AND ANALYSIS:

Section 12.130(b) of the Customs Regulations provides that a textile product that is processed in more than one country or territory shall be a product of that country or territory where it last underwent a substantial transformation. A 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) of the Customs Regulations sets forth criteria in determining whether a substantial transformation of a textile product has taken place. This regulation states that these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1) states that 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.

Section 12.130(d)(2) states that 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.

(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.

We do not believe that a new and different article results from the processing operations performed in Sri Lanka. When the cap components arrive in Sri Lanka, the crown of the cap is already formed; therefore, this article already has the character of a cap. In addition, a substantial amount of the processing operations are performed in China, where the fabric is made and cut to make the components, and pieces are sewn together to form the crown of the cap. We believe that in application of 19 CFR 12.130, the last substantial transformation of the cap at issue takes place in China. Therefore, the country of origin for quota and marking purposes for the cap at issue is China.

HOLDING:

The country of origin for quota and marking purposes for the cap at issue is China.

Sincerely,

John Durant, Director

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