HQ 0733323 - Country of origin of sweaters. - United States International Trade Commision Rulings

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HQ 733323

May 2, 1990

MAR 2-05 CO:R:C:V 733323 LR

CATEGORY: MARKING

Ronald W. Gerdes, Esq.
Sandler, Travis & Rosenberg, P.A.
1120 Nineteenth Street, N.W.
Washington, D.C. 20036

RE: Country of origin of sweaters.

Dear Mr. Gerdes:

This is in response to your letter dated April 24, 1990, submitted on behalf of a number of your clients including The Gap and Salant Corporation, concerning the country of origin marking requirements of sweaters which are knit in China and assembled in Hong Kong.

FACTS:

Treasury Decision 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, Customs Regulations (19 CFR 12.130), which on their face apply only to quota determinations. The change will be effective as to merchandise entered, or withdrawn from warehouse for consumption on or after June 29, 1990. The change of practice affects the country of origin marking requirements of sweaters which are knit in one country and assembled in another. Pursuant to 19 CFR 12.130, the country of origin of the sweater is the country where the panels are knit. Therefore, in accordance with T.D. 90-17, effective June 29, 1990, sweaters which are assembled in Hong Kong from panels knit in China are for all purposes, including country of origin marking, products of China.

You note that since neither the Federal Register notice nor any other rulings or directives of which you are aware provide any guidelines as to what specific language will or will not be acceptable for indicating the appropriate country of origin as determined by the new rule, you request a delay in the implementation of the final rule. You also indicate that there has been some disagreement concerning what is considered acceptable language under the new rules and your clients have been unable to begin taking the necessary steps to comply with the new requirement.

ISSUES:

1) How should sweaters which are knit in China and assembled in Hong Kong be marked to indicate the country of origin after the change of practice announced in T.D. 90-17 goes into effect?

2) Will the June 29, 1990 implementation date of T.D. 90-17 be delayed?

LAW AND ANALYSIS:

ACCEPTABLE MARKING

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 of 19 U.S.C. 1304. The term "country of origin" is defined in section 134.1(b)), Customs Regulations (19 CFR 134.1(b)) as the country of manufacture, production or growth of any article of foreign origin entering the U.S. 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 this part.

In accordance with the above provisions an imported article generally has only one country of origin (i.e., the country where the last substantial transformation occurred). The name of this country must be clearly indicated on the imported article. Reference may be made to a second country so long as the country of origin is clearly stated and the requirements of section 134.46, Customs Regulations (19 CFR 134.46), are satisfied. This regulation requires that in any case in which the name of any country other than the country in which the article was manufactured or produced appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning.

As indicated above, pursuant to T.D. 90-17 and 19 CFR 12.130 the country of origin of a sweater which is knit in China and assembled in Hong Kong is China. Applying the general country of origin marking requirements, any acceptable marking on the finished sweaters must clearly indicate that China is the country of origin. Customs would accept the word "China" standing alone or any of the following markings: "Made in China", "Product of China" and "Knit in China".

If, however, any reference is made to the processing performed in Hong Kong, the requirements of 19 CFR 134.46 must be satisfied and the country of origin must be preceded by "Made in", "Product of," or other words of similar meaning. For purposes of this provision, we consider "Knit in" words of similar meaning to "Made in" or "Product of". Thus, the words "assembled in Hong Kong" or "assembled and finished in Hong Kong" may precede or follow "Made in China", "Product of China", or "Knit in China". For example, "Knit in China. Assembled in Hong Kong" would be acceptable country of origin marking.

It should also be noted that any marking which refers only to the country of origin of the sweater parts, rather than the sweater, does not satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134. For example, the marking "Assembled in Hong Kong from parts knit in China" is not acceptable marking. Such language does not satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134 because it does not clearly indicate the country of origin of the imported sweater.

EFFECTIVE DATE

As indicated above, the change announced in T.D. 90-17 is effective as to merchandise entered, or withdrawn from warehouse for consumption, on or after June 29, 1990, 120 days after the date of publication. However, because neither the Federal Register Notice nor other rulings or directives provides any guidelines as to what specific language will or will not be acceptable to indicate the appropriate country of origin as determined by the new rule, you request a delay in the implementation of the final rule.

We are of the opinion that the original implementation period provided sufficient time to comply with the new marking rules. The fact that Customs has not previously ruled on the specific language that will be acceptable for indicating the appropriate country of origin of articles which are affected by T.D. 90-17 is insufficient reason to delay the effective date. The general rules for marking set forth in the statute and the regulations are applicable to the sweaters and all other articles which are affected by the change of practice. The requirements of 19 CFR 134.46 as interpreted by Customs in numerous rulings are clear. The fact that there has been some reluctance to mark the sweaters in accordance with the general marking requirements is insufficient reason to extend the implementation date. The request for a delay is denied.

HOLDING:

A sweater assembled in Hong Kong from panels knit in China and entered or withdrawn from warehouse for consumption on or after June 29, 1990, must be marked to clearly indicate that it is a product of China. In accordance with 19 U.S.C. 1304 and 19 CFR Part 134, these sweaters may be marked "China", "Made in China", "Product of China" or "Knit in China".

If any reference is made to the processing performed in Hong Kong, the requirements of 19 CFR 134.46 must be satisfied. The country of origin must be preceded by the words "Made in", "Product of" or words of similar meaning and appear in close proximity to and in comparable size letters as the Hong Kong reference. For purposes of this provision, we consider "Knit in" words of similar meaning to "Made in" or "Product of". Thus, the words "assembled in Hong Kong" or "assembled and finished in Hong Kong" may precede or follow "Made in China", "Product of China", or "Knit in China".

Any marking which does not clearly indicate that the country of origin of the sweater is China and refers only to the country of origin of the sweater parts or panels is not acceptable.

Sincerely,

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