HQ 0951541 - Country of Origin determination for men's polyester/cotton woven dress shirts - 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 > 1993 HQ Rulings > HQ 0951469 - HQ 0951626 > HQ 0951541

HQ 951541

July 30, 1992

CLA-2 CO:R:C:T 951541 jb

CATEGORY: CLASSIFICATION

Andrew P. Vance, Esquire
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016

RE: Country of Origin determination for men's polyester/cotton woven dress shirts

Dear Mr. Vance:

This letter is in response to your inquiry of April 7, 1992, on behalf of your client, Luen Thai, requesting a country of origin determination for men's woven polyester/cotton dress shirts. As requested, your sample will be returned under separate cover.

FACTS:

The submitted sample is a long sleeve, woven men's 65 percent/35 percent cotton, white dress shirt. The shirt has a dress collar, full frontal opening with placket, a yoke across the back extending to the shoulders to which a single panel is sewn, left breast pocket, and cuffs with two buttons on each cuff.

You state that the dress shirts may be manufactured by either of the following circumstances:

(1) The fabric is made in one country (not Hong Kong or China) and thereafter the fabric is marked and cut into shirt panels in Hong Kong. All parts are then assembled, sewn, ironed and packed in China; or

(2) The fabric is made in one country (not Hong Kong or China) and thereafter the fabric is marked and cut into shirt panels in Hong Kong. At the same time the collars and cuffs are sewn in Hong Kong, and then all parts and the collars and cuffs are assembled, sewn, ironed and packed in China; or

(3) The fabric is made in one country (not Hong Kong or China) and thereafter the fabric is marked and cut into shirt panels in Hong Kong. At the same time the collars are sewn in Hong Kong and then all parts and the collars are assembled, sewn, iron and packed in China.

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).

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). (Emphasis added)

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). Emphasis added.

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 731028, dated July 18, 1988; HQ 731306, dated July 17, 1989; HQ 732485, dated January 18, 1990; HQ 556070, dated July 1, 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 086696, dated June 8, 1990; HQ 088283, dated February 28, 1991 and HQ 089539, dated April 22, 1992).

Section 12.130(e)(i)(v) makes note that there must be substantial assembly by sewing or tailoring of a suit-type garment for substantial transformation to occur. Tailored is defined as:

Having simple, trim, fitted lines obtained by careful cutting, seaming and pressing. Mary Brooks Picken, The Fashion Dictionary at 377 (1973).

1. Fashioned or fitted to resemble a tailor's work. 2. Custom made. 3. Having the look of one fitted by a custom tailor. Webster's Ninth New Collegiate Dictionary at 1202 (1991).

The submitted sample is a dress shirt; also considered a "suit-type" shirt. Dress shirt is defined as:

Man's shirt for evening wear. See shirts. Mary Brooks Picken, The Fashion Dictionary at 114 (1973).

Man's white shirt for evening wear, usually having starched, tucked, or pleated bosom. Id. at 322.

A man's shirt especially for wear with evening dress; broadly: a shirt suitable for wear with a necktie. Webster's Ninth New Collegiate Dictionary at 383.

As the definitions of dress shirt illustrate, the requisite operations that are entailed in the production of this more tailored article, necessitate careful and skilled sewing in the assembly. The assembly operation is thus not a factor of how much time is employed but rather the skill and complexity that is involved.

As concerns the subject merchandise, in the first set of circumstances, where all of the assembly and sewing is done in China, substantial transformation also occurs in China. As provided in section 12.130(e)(1)(v), since the processing operations performed in China involve a substantial assembly by sewing of all the cut pieces, this satisfies the manufacturing or processing requirement from which an article will usually be considered a product of the country in which those operations occurred.

In the second and third set of circumstances, only partial sewing and assembly operations are performed in China. Before this stage in the processing is reached, the fabric is marked, cut and partially sewn and assembled in Hong Kong. As stated in T.D. 85-38, not all assembly operations of cut garment pieces will amount to substantial transformation of those pieces, giving as an example thereof, the situation where less than a complete assembly of all the cut pieces is performed in one country. In both the second and third circumstances the partial sewing and assembly operations are not considered significant enough to qualify as "substantial transformation". As such, substantial transformation remains that of the country in which the cutting of the fabric was performed, that is to say, Hong Kong.

HOLDING:

The country of origin of the submitted merchandise in each of the three factual situations presented is as follows:

(1) Where the fabric is made in one country, cut into shirt panels in Hong Kong, and then all parts assembled, sewn, ironed and packed in China, the country of origin is China.

(2) Where the fabric is made in one country, marked and cut into shirt panels in Hong Kong (where the collars are cuffs are also sewn), and then all parts including the collars and cuffs are assembled, sewn, ironed and packed in China, the country of origin is Hong Kong.

(3) Where the fabric is made in one country, marked and cut into shirt panels in Hong Kong (where the collars are also sewn), and then all parts including the collars are assembled, sewn, ironed and packed in China, the country of origin is Hong Kong.

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