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HQ 087271


January 17, 1991

CLA-2 CO:R:C:G 087271 CC

CATEGORY: CLASSIFICATION

Mr. Matthew Chang
Assistant Vice President
C. Itoh & Co. (America) Inc.
335 Madison Avenue
New York, N.Y. 10017

RE: Country of origin of sweaters

Dear Mr. Chang:

This letter is response to your inquiry of September 18, 1990, requesting country of origin determinations for sweaters.

FACTS:

According to your submissions, knit-to-shape component parts are made in China. These parts are sent to Hong Kong where they are joined together by a simple linking method, such as that described in Section 12.130 of the Customs Regulations (19 CFR 12.130), to create completed sweaters. We note that you have not submitted a sample.

You have requested country of origin and country of origin marking determinations in light of Treasury Decision (T.D.) 90-17. In addition, you inquire whether the sweaters will be subject to a Column II rate of duty and which country must issue the visa.

ISSUE:

What is the country of origin for the merchandise at issue?

LAW AND ANALYSIS:

T.D. 90-17, published in the Federal Register on March 1, 1990 (55 F.R. 7303), announced a change of practice to conform the rules of origin for textile products for all purposes to the rules set forth in Section 12.130 of the Customs Regulations (19 CFR 12.130). Therefore country of origin determinations for duty, quota, and marking purposes for textile products are governed by Section 12.130 of the Customs Regulations (19 CFR 12.130).

Section 12.130 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)(2) of the Customs Regulations 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.

Section 12.130(e)(2) provides that an article or material usually will not be considered to be a product of a particular foreign territory or country, or insular possession of the U.S. by virtue of merely having undergone any of the following:

...

(iii) trimming and/or joining together by sewing, looping, linking, or other means of attaching otherwise completed knit-to- shape component parts produced in a single country, even when accompanied by other processes (e.g. washing, drying, mending, etc.) normally incident to the assembly process.

We believe that based on your submissions Section 12.130(e)(2)(iii) would be applicable. Assuming that the component parts are completed and knit-to-shape and are joined together by sewing, looping, linking, or other means of attaching, no substantial transformation takes place in Hong Kong. The last substantial transformation for this merchandise occurs in China, where the fabric is made. Therefore the country of origin for duty, quota and visa, and marking purposes is China.

You inquired whether one of the following would be acceptable for marking purposes: "Made in China, Assembled in Hong Kong" or "Knit in China, Assembled in Hong Kong."

Section 304 of the Tariff Act of 1930, as amended, (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions to 19 U.S.C. 1304.

The name of the country of origin must be clearly indicated on the imported article. Reference may be made to a second country so long as the country or origin is clearly stated and the requirements of Section 134.46 of the Customs Regulations are satisfied. The expressions "Made in China" and "Knit in China" clearly state the country of origin for the merchandise at issue. The expressions "Made in China, Assembled in Hong Kong" or "Knit in China, Assembled in Hong Kong" satisfy the requirements of Section 134.46 of the Customs Regulations and would be acceptable country of origin marking.

Concerning your additional questions, merchandise of China is subject to a Column I rate of duty at this time. A visa will be required from China. With regard to your question concerning a possible change in the most-favored-nation (MFN) status of China, we are not aware of any impending change in the eligibility of the PRC for MFN status. However, should you require more detailed information we suggest that you contact the Office of the U.S. Trade Representative on this matter.

HOLDING:

The country of origin for duty, quota and visa, and marking purposes for the merchandise at issue is China.

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 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it subsequently be 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, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director

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