HQ 0088283 - Country of origin of men's dress shirts. Cutting; sewing; trimmings; accessories; marking; packaging - United States International Trade Commision Rulings

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HQ 088283

February 28, 1991

CLA-2 CO:R:C:T 088283 HP

CATEGORY: CLASSIFICATION

Ms. Barbara Yao
International Manager
Cach International, Inc.
1527 Newton Street
Los Angeles, CA 90021

RE: Country of origin of men's dress shirts. Cutting; sewing; trimmings; accessories; marking; packaging

Dear Ms. Yao:

This is in reply to your letter of November 26, 1990, concerning the country of origin determination of men's dress shirts.

FACTS:

The merchandise at issue consists of men's 65% polyester / 35% cotton dress shirts. You anticipate importing approximately 9,000 dozen shirts through the Los Angeles port during the period of March through May of 1991. Your importer number is 95-3407638. You have described the cost and operation breakdown by country as follows:

Operation Cost Country

Fabric production. (23 yards @ $14.95/DZ "A" $0.65/yard)

Designing and styling garment, and $00.25/DZ "A" marking fabric.

Cutting fabric to shape according $03.20/DZ "A" to pattern.

Trimming and accessories. $01.70/DZ "A"

Total for Country "A" $20.10/DZ

Sewing fabric pieces, packaging, $08.00/DZ "B" and exporting.

Total for Country "B" $08.00/DZ

Total Cost $28.10/DZ "A"+"B"

ISSUE:

Whether the manufacturing processes taking place in country "B" constitute a substantial transformation sufficient to consider country "B" the country of origin?

LAW AND ANALYSIS:

Textile commodities produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that:

... a textile product ... which consists of materials produced or derived from, or processed in, more than one foreign ... country shall be a product of that foreign ... country where it last underwent a substantial transformation.

12.130(b). A textile product undergoes a substantial transformation when it is "... transformed by means of substantial manufacturing or processing operations into a new and different article of commerce."

Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regulations is considered in determining whether a textile product has undergone substantial manufacturing or processing operations, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determinative, and additional factors may be considered."

In determining whether merchandise has undergone substantial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country.

In HRL 086696 of June 8, 1990, we undertook this analysis with respect to, inter alia, men's dress shirts. In that
scenario, the piece goods [were] marked and cut in country A. In addition, the collars and front panels [were] constructed in country A; however, the remaining cut panels together with the finished components (collars and front panels) [were] sent to country B and sewn into completed shirts.

According to T.D. 85-38 (19 Cust.
Bull. 58, 70; 50 FR 8714), the final document rule establishing 19 CFR 12.130:

The assembly of all the cut pieces of a garment usually is a substantial manufacturing process that results in an article with a different name, character or use than the cut pieces. It should be noted that not all assembly operations of cut garments will amount to a substantial transformation of those pieces. Where either less than a complete assembly of all cut pieces of a garment is performed in one country, or the assembly is a relatively simple one, then Customs will rule on the particular factual situations as they arise, utilizing the criteria in
12.130(d).

In HRL 086696, we held that "the sewing operations conducted in country B do not appear to require a high degree of skill." As nothing suggested that the component assembly was a complex operation with respect to the time or skill required, or the value added, we stated that no substantial manufacturing or processing operation existed.

The procedures taking place in this situation are nearly identical to those in the above-referenced ruling. The manufacturing operations are the same, and the additional value bestowed upon the shirts in country "B" is only 39.8% of the value of the components upon export from country "A". Consequently, the shirts have not been substantially transformed, and country "A" is the country of origin for quota and marking purposes.

HOLDING:

As a result of the foregoing, Country "A" is the country of origin of the men's dress shirts under 19 C.F.R. 12.130.

The holding in this ruling 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 C.F.R. 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 C.F.R. 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. In such a case, it is recommended that a new ruling request be submitted in accordance with section 177.2, CUSTOMS REGULATIONS (19 C.F.R. 177.2).

Sincerely,

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