HQ 0954808 - Country of origin determination for girl's padded jacket; 19 CFR 12.130; substantial transformation occurs at time of assembly; assembly of shell is beyond a simple sewing operation - United States International Trade Commision Rulings

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HQ 954808

December 17, 1993

CLA-2 CO:R:C:T 954808 jb

CATEGORY: CLASSIFICATION

Ms. Marty L. Corgan
M & L International Co., L.P.
1333 N. Kingsbury Street
Chicago, Il, 60622

RE: Country of origin determination for girl's padded jacket; 19 CFR 12.130; substantial transformation occurs at time of assembly; assembly of shell is beyond a simple sewing operation

Dear Ms. Corgan:

This letter is in response to your inquiry of August 9, 1993, requesting a country of origin determination for a girl's padded jacket. A sample of the unassembled jacket shell and the lining with the padding and zipper attached were provided to this office for examination.

FACTS:

You state that the shirts may be manufactured in one of three circumstances:

SCENARIO I:

Country A Country B
shell is cut lining is cut shell is assembled padding is cut padding is sewn to lining zipper is attached shell and padding are assembled and finished

SCENARIO II:

Country A Country B
shell is cut shell is assembled lining is cut padding is cut padding is sewn to lining zipper is attached shell and padding are assembled and finished

SCENARIO III:

Country A Country B Country C
shell is cut shell is assembled lining is cut padding is cut padding is sewn to lining zipper is attached shell and padding are assembled and finished

You state that in all three scenarios the padding for the jacket is produced in Country B, the fabric for the shell and the lining are produced in Country C,and the zipper is produced in Country D (or possibly Country C). Also included in your letter was the operations breakdown involved in all three scenarios for each country.

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 textiles and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854).

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 insu1ar 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.

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 081320, dated April 14, 1989; HQ 086696, dated June 8, 1990; HQ 082924, dated March 26, 1990; HQ 085611, dated January 17, 1990; HQ 951426, dated April 8, 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. To determine whether origin is conferred when an article is transformed from its numerous constituent parts to what is eventually recognized as the completed garment, i.e., a jacket, one must first define "substantial assembly."

Substantial assembly can be defined as that operation, whether by sewing or tailoring, when all the components of the garment are attached together to form that completed jacket. Succinctly stated, substantial transformation occurs at the time of assembly of the individual component parts into what can be identified as a jacket.

Sewing the individual components of the shell together necessitates careful and skilled sewing in the assembly. This is because unlike a simple, plain jacket, or a jacket onto which designs have been sewn, this jacket has a large number of small pieces, each of which has to be sewn together to actually form the completed shell. Thus, the small parts consisting of the design are not sewn onto the shell but actually constitute the shell when assembled together. At the cutting stage of these small pieces, the identity of the jacket is not yet discernable because we do not have large, simple panels. For example, the
collar consists of three separate and different colored pieces; the "design" on the jacket, which covers the front upper portion of the jacket and extends midway to the back, past the shoulders, is actually a strip of different colored fabric which is an integral part of the shell (without this piece there would be a hole between the upper and lower portion of the jacket). Onto this strip additional separate diamond pieces are sewn, plus two individual strips of colored fabric, thus forming an "X" across the diamonds; the pocket flaps consists of three separate and different colored pieces; the pockets and plackets have a quilted design, and there is also a separate piece of fabric which forms a tunnel around the jacket, into which the string which tightens the jacket at the waist may be funnelled.

Accordingly, because of the extensive and intricate nature of the assembly operation which must be performed before the shell is completed, the sewing operations involved in the assembly of the shell constitute a substantial transformation. In addition, a determination that substantial transformation occurs at the time of assembly of the individual component parts is in adherence to the terms set by Section 12.130(e)(1) of the Customs Regulations. We refer you to several rulings which have held that substantial transformation occurs at the time of complete assembly, e.g., HQ 075323, dated April 1, 1985; HQ 082787, dated March 9, 1989, HQ 555608, dated January 27, 1990, and HQ 952750, dated October 16, 1992.

In Scenario I, all of the components for the shell are cut and assembled in Country A. The completed shell is thereafter sent to Country B for the addition of the lining and padding. In Scenario II, the cutting of all the components for the shell is performed in Country B. The unassembled parts are then sent to Country A where the shell is assembled. The completed shell is then sent to Country B where the lining and padding are added to the shell. In Scenario III, all of the components for the shell are cut in Country C. The unassembled parts are then sent to Country A where the shell is assembled, after which the completed shell is sent to Country B where the lining and padding are added to the shell.

In all three scenarios there is a substantial transformation at the time of assembly of the component parts of the shell into the completed shell. It is the opinion of this office that it is at this time that the garment is readily identifiable as a jacket and thus a substantial assembly of the completed garment takes place. The addition of the lining and padding do not change the identity of the garment.

HOLDING:

Based on the information provided, the country of origin for the jacket is as follows:

Scenario I- country of origin of the jacket is Country A Scenario II- country of origin of the jacket is Country A Scenario III- country of origin of the jacket is Country A

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 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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