HQ 0954979 - Country of origin of knit sweaters; 19 CFR 12.130; sweater panels (back, front, two sleeves) are knit to shape, or cut, in country A; sweater panels are assembled in country B; simple assembly and finishing operations do not constitute a substantial transformation. - 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 > 1994 HQ Rulings > HQ 0954939 - HQ 0955015 > HQ 0954979

HQ 954979

January 6, 1994

CLA-2 CO:R:C:T 954979 SK

CATEGORY: CLASSIFICATION

Frank J. Desiderio
Grunfeld, Desiderio, Lebowitz & Silverman 245 Park Avenue
New York, N.Y. 10167-0002

RE: Country of origin of knit sweaters; 19 CFR 12.130; sweater panels (back, front, two sleeves) are knit to shape, or cut, in country A; sweater panels are assembled in country B; simple assembly and finishing operations do not constitute a substantial transformation.

Dear Mr. Desiderio:

This is in response to your letter of September 1, 1993, on behalf of your client, Tommy Hilfiger Sportswear, in which you request a country of origin determination for knitted sweaters. No sample was submitted to this office.

FACTS:

The garments at issue undergo the following manufacturing processes:

COUNTRY A (India or Pakistan) -- Sweater panels (back, front, sleeves) are knit to shape or cut;

COUNTRY B (People's Republic of China) -- Knit sweater panels are assembled and finished (joined by looping or sewing, trimmed, labeled, washed, pressed and packaged).

ISSUE:

What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) 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;

(ii) The time involved in the manufacturing or processing;

(iii) The complexity of the manufacturing or processing;

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations;

(v) The value added to the article or material;

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:

(i) Dyeing of fabric and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing;

(ii) Spinning fibers into yarn;

(iii) Weaving, knitting or otherwise forming fabric;

(iv) Cutting of fabric into parts and the assembly of those parts into the completed article;

(v) 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 (19 Cust. Bull. 58, 70; 50 FR 8714), the final document rule establishing 19 CFR 12.130:

[T]he 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 complete assembly of all the cut pieces of a garment is performed in one country, or the assembly is a relatively simple one, Customs will rule on the particular factual situations as they arise, utilizing the criteria in section 12.130(d).

This office has consistently 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 Headquarters Ruling Letters (HRL's) 082747, dated February 23, 1989; 086665, dated March 23, 1990; 951169, dated April 1, 1992; 951437, dated July 17, 1992; 952647, dated January 27, 1993.

In the instant case, the assembly operations to be performed in Country B (People's Republic of China) are mere combining and sewing operations and do not possess the requisite degree of complexity to be deemed substantial manufacturing processes for purposes of conferring country of origin status. No great degree of skill or advanced technology is required, nor is tailoring involved.

The operations performed in Country A (India or Pakistan), however, are deemed to substantially transform the article as per Section 12.130(e)(1)(iii) which provides that "weaving, knitting or otherwise forming fabric" will usually confer country of origin status. Similarly, if the sweater panels are not knit to shape in Country A, but rather cut from the knitted fabric, this too is deemed a substantial transformation; the cutting of fabric into designated garment pieces is a substantial manufacturing process that serves to create a new and different article of commerce.

HOLDING:

Your submission states that the sweater fabric will either be knit to shape, or sweater panels will be cut from the formed fabric, in either India or Pakistan. If the sweater panels are knit to shape, and not subsequently cut, the country of origin of the sweaters at issue will be the country where the fabric is formed: India or Pakistan (Country A).

If sweater panels are cut from already formed fabric, and this cutting occurs in the same country as where the fabric is formed (either India or Pakistan), the country of origin of the sweaters at issue will be India or Pakistan (Country A) as this is where the garments last undergo a substantial transformation. We note that if the fabric is formed and cut in different countries, the country where the fabric is cut into garment pieces confers country of origin status to the garment as this is the country where the garment last undergoes a substantial transformation (i.e., fabric is woven in India and cut into garment pieces in Pakistan: country of origin is Pakistan).

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,

John Durant, Director

Previous Ruling Next Ruling