HQ 0950287 - Country of origin of sweaters - United States International Trade Commision Rulings

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HQ 950287

October 30, 1991

CLA-2 CO:R:C:T 950287 SK

CATEGORY: CLASSIFICATION

Mr. J.F. Fritz
Norman Krieger, Inc.
P.O. Box 92599
Los Angeles, CA 90009

RE: Country of origin of sweaters

Dear Mr. Fritz:

This letter is in response to your inquiry of August 5, 1991, on behalf of California Fashion Club, Inc., requesting a country of origin determination for sweaters. A sample of both the finished article and its unassembled component parts were submitted for Customs' examination.

FACTS:

The submitted sample, Style MJ-2038, is a women's knit pullover sweater that consists of 80% acrylic, 17% nylon and 3% lambswool fibers. The fabric of the sweater has less than nine stitches per two centimeters measured horizontally. The sweater features a round, capped neckline, long sleeves with rib knit cuffs and a pronounced rib knit waistband. The front panel has intarsia knit construction that forms a flower and leaf pattern. Fabric pieces were also submitted that constitute various parts of the sweater: front panel, back panel, two sleeve panels and the collar piece.

According to your submissions, you state that the front panel is knit in Taiwan but the "balance of (the) garment is knit and completed in Macau." An earlier submission by the knitting factory in Macau sets forth that the yarn is spun either in Taiwan or another unspecified country. The yarn is dyed in Macau. The front panel is knit in an unspecified foreign territory. The back panel, the sleeves and the collar are all knit in Macau. The remaining assembling, finishing and packaging are all performed in Macau.

ISSUE:

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

LAW AND ANALYSIS:

Section 12.130 of the Customs Regulations (19 CFR 12.130) is applicable to the merchandise at issue. 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;
(iii) Commercial use.

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 United States;

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the United States;

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the United States;

(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 United States;

(v) The value added to the article or material in each foreign territory or country, or insular possession of the United States, compared to its value when imported into the United States.

Section 12.130(e)(1) provides that an article or material usually will be a product of a particular foreign territory or country, or insular possession of the United States, when, prior to importation into the United States, it has undergone in that foreign territory or country or insular possession, any of the following:

(iii) weaving, knitting or otherwise forming fabric.

The article at issue last undergoes a substantial transformation in Macau. This "substantial transformation" takes the form of extensive manufacturing and processing operations which include all of the subject merchandise's assembly, finishing work and knitting, except for the knitting of the front panel. The article at issue has been subjected to substantial processing in Macau inasmuch as it is here that the article undergoes a significant physical change into a completely assembled sweater and the time involved in knitting and assembling the back, sleeves and collar is significantly longer than that of processing the front panel alone.

HOLDING:

The country of origin for the merchandise at issue is Macau.

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 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,

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