HQ 0951424 - Country of Origin determination for a knit, cotton jersey men's brief - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0951335 - HQ 0951571 > HQ 0951424

HQ 951424

April 24, 1992

CLA-2 CO:R:C:T 951424 jb

CATEGORY: CLASSIFICATION

Judith Schechter, Esquire
Grunfeld, Desiderio, Lebowitz & Silverman 12 East 49th Street
New York, NY 10017

RE: Country of Origin determination for a knit, cotton jersey men's brief

Dear Ms. Schechter:

This letter is in response to your inquiry of March 26, 1992, on behalf of your client, Orit Imports, Inc., requesting a country of origin determination for a knit, cotton jersey men's brief. A sample was submitted for examination.

FACTS:

The submitted sample, Style 336, consists of a knit, 100 percent cotton jersey men's brief.

According to your submissions, Orit Imports, Inc., is contemplating a multi-country processing whereby fabric will be knit and printed or dyed in Hong Kong or Pakistan. The fabric, which will not have any lines of demarcation, will be sent to Singapore where it will be cut into garment components. The cut components and trim (i.e., elastics and labels) will then be sent to Malaysia for assembly by sewing. The finished garments will be returned to Singapore for packing and export to the United States.

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), sets forth the principles of country of origin for textile and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854). According to T.D. 85-38, the final rule document which established 19 CFR 12.130, the principles of country of origin for textiles and textile products contained in 19 CFR 12.130 are applicable to such merchandise for all purposes, including duty and marking (50 FR 8714 (1985)).

This regulation, which became effective in 1985, came about as a result of Executive Order No. 12475 (49 FR 19955 (1984)), which directed the Secretary of Treasury, in accordance with policy guidance provided by the Committee for the Implementation of Textile Agreements, to issue regulations governing the entry, or withdrawal from warehouse for consumption, of textile and textile products subject to section 204. The regulations were to include clarifications in, or revisions to, the country of origin rules for textiles and textile products subject to section 204 in order to avoid circumvention of multilateral and bilateral textile agreements.

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) 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)(1) of the Customs Regulations describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130(e)(1)(v) provides the following:

Substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which have been cut from fabric in another foreign territory or country, or insular possession, into a completed garment (e.g. the complete assembly and tailoring of all cut pieces of suit-type jackets, suits and shirts).

According to T.D. 85-38, 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 garment pieces will amount to a substantial transformation of those pieces. Where either less than a complete assembly of all the 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 situation as they arise, utilizing the criteria in section 12.130(d).

We have previously held that cutting of fabric into pattern pieces constitutes a substantial transformation of the fabric, resulting in the apparel pieces becoming a product of the country where the fabric is cut (see: HQ 084979, dated October 23, 1989; HQ 731036, dated July 17, 1989; HQ 555730, dated February 19, 1991; HQ 556030, dated August 29, 1991; and HQ 089834, dated September 26, 1991).

Customs has long held that the mere assembly of goods, entailing simple combining operations, trimming or joining together by sewing is not enough to substantially transform the components of an article into a new and different article of commerce (see HQ 082787, dated March 9, 1989 and HQ 082747, dated February 23, 1989).

Because the articles in question are textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854), 19 CFR 12.130 is applicable.

Style 336 is similar to Headquarters Ruling (HQ) 081642, dated April 28, 1989, addressing the country of origin of certain women's 100 percent cotton knit panties produced in multiple countries. In that ruling it was held that despite the fact that the underpants would be sewn and assembled in Thailand, Israel was the designated country of origin for the panties because they were cut and bleached there.

The sewing operation performed in Malaysia involves the simple assembly of several cut pattern pieces: four panels in the front and one panel each in the crotch and across the buttocks. The sewing does not involve the complex sewing operation required when manufacturing a suit, suit jacket, or tailored shirt contemplated by section 12.130(e)(v).

The cutting in Singapore, materially changes the garment into designated garment parts. Since assembly, per se, of the garment does not result in a substantial transformation, the cutting process in Singapore is considered the time at which the last substantial transformation occurs.

HOLDING:

The country of origin of the submitted merchandise is Singapore. It is at the cutting process, in Singapore, that the textile product undergoes a substantial transformation and is transformed into a new and different article of commerce.

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 the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.

Should it be 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

Previous Ruling Next Ruling