HQ 0954447 - Country of origin marking for U.S. origin sweatshirts that are embossed with U.S. origin polyurethane foam, adhesive webbing and facing in Mexico; 19 CFR 12.130(c); HRLs 555760 and 555249 - United States International Trade Commision Rulings

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HQ 954447

September 9, 1993

CLA-2 CO:R:C:T 954447 NLP

CATEGORY: CLASSIFICATION

Ms. Elaine Jacoby
Miles & Joffroy, Inc.
2225 Avenida Costa Este
Suite 1600
Otay Mesa, CA 92073

RE: Country of origin marking for U.S. origin sweatshirts that are embossed with U.S. origin polyurethane foam, adhesive webbing and facing in Mexico; 19 CFR 12.130(c); HRLs 555760 and 555249

Dear Ms. Jacoby:

This is in response to your letter dated February 8, 1993, on behalf of your client, Coast Belt, Inc., in which you requested a ruling concerning the country of origin marking requirements applicable to U.S. origin sweatshirts that will embossed in Mexico and returned to the U.S.

FACTS:

The articles at issue are blank 100% cotton sweatshirts that are manufactured in the U.S. These sweatshirts will be exported to Mexico where they will be embossed with material of U.S. origin. The embossing procedure utilizes pre-cut U.S. origin polyurethane foam, adhesive webbing and a pellon type facing material. The sweatshirt will be turned inside out and placed on a rotating table. The pre-cut foam, adhesive webbing and facing will be centered on the inside front of the sweatshirt, which will be positioned under the embossing picture forming dye of the sonic welding machine. The dye will be lowered and the machine will impress the dye on the materials for approximately one minute. This operation affects a permanent embossed picture on the front of the sweatshirt.

The approximate values of the sweatshirts will range from $3.00 to $5.00. The aggregate cost of the embossing materials will range from $0.05 to $0.10 per sweatshirt. The total cost of the assembly operation is approximately $0.04 per sweatshirt.

In your letter, you state that it has been suggested that the sweatshirts be marked as follows:

U.S. GARMENT
FURTHER PROCESSED IN MEXICO

ISSUE:

What are the country of origin marking requirements applicable to a U.S. made sweatshirt that will be embossed in Mexico with U.S. origin pre-cut polyurethane foam, adhesive webbing and facing?

LAW AND ANALYSIS:

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 U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

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), section 12.130, Customs Regulations (19 CFR 12.130) is applicable. Section 12.130 provides that generally the country of origin of a textile product is that foreign territory, country or insular possession where the article last underwent a substantial transformation. However, there is an exception to the general rule set forth in section 12.130(c), Customs Regulations (19 CFR 12.130(c). Section 12.130(c) provides the following:

Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposes of the Tariff Act of 1930, as amended. In order to have a single definition of the term "product of" and, therefore, a single country of origin for a textile or textile product, notwithstanding paragraph (b), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, may not, upon its return to the U.S., be considered a product of the U.S.

In Headquarters Ruling Letter (HRL) 555760, dated November 16, 1990, Customs dealt with the country of origin marking requirements applicable to U.S. manufactured blank 100% cotton t-shirts that where shipped to Guatemala, where a design was embroidered on the front of the t-shirts. The t-shirts were then returned to the U.S. Customs held that 19 CFR 12.130(c) was applicable and since the t-shirts were advanced in value and improved in condition by the foreign embroidery operation, they were not considered a product of the U.S. Therefore, for purposes of 19 U.S.C. 1304, a label such as "Made in Guatemala, U.S.A. fabric" or "Product of Guatemala, U.S.A. fabric" was considered acceptable. See also, HRL 555249, dated June 16, 1989, wherein U.S. made sweatshirts were exported to Haiti, where they were subjected to a chenilling process and then they were returned to the U.S. These sweatshirts were considered products of Haiti for marking purposes pursuant to 19 CFR 12.130(c).

In the present case, the embossing of the U.S. manufactured sweatshirts in Mexico advances their value and improves their condition and thus renders them products of Mexico. Therefore, the sweatshirts must be marked with the appropriate country name, legibly, conspicuously and permanently. The following markings would be considered acceptable:

Made in Mexico, U.S. fabric; or
Product of Mexico, U.S. fabric.

HOLDING:

The embossing operation performed on the U.S. made sweatshirts in Mexico advances them in value and improves them in condition. Therefore, for country of origin marking purposes, the sweatshirts are considered to be products of Mexico pursuant to 19 CFR 12.130(c) and must be marked accordingly.

Sincerely,

John Durant, Director

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