HQ 0956143 - Country of origin determination for men's long sleeve quilted shirts; 19 CFR 12.130; substantial transformation where assembly occurs; sub-assembly of minor parts does not confer country of origin; HRLs 953640, 954448 and 952639. - United States International Trade Commision Rulings

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HQ 956143

July 13, 1994

CLA-2 CO:R:C:T 956143 NLP

CATEGORY: CLASSIFICATION

Samuel Chow, Managing Director
Taiwan Garments
615-5 Lin Shen N. Rd.
Taipei, Taiwan

RE: Country of origin determination for men's long sleeve quilted shirts; 19 CFR 12.130; substantial transformation where assembly occurs; sub-assembly of minor parts does not confer country of origin; HRLs 953640, 954448 and 952639.

Dear Mr. Chow:

This is in response to your letter of March 10, 1994, in which you requested a country of origin determination for men's long sleeve quilted shirts. Samples of the unassembled and sub- assembled component parts as well as a finished shirt were provided to this office for our examination.

FACTS:

The garment at issue is a men's long sleeve quilted western style shirt. In country A the following operations take place:

1. The fabric is spun and woven.
2. The quilting is made up by sewing 100% polyester filler onto a 100% nylon lining.
3. Patterning, sampling, size grading and marking the fabric, either by computer or manually.
4. Cutting the fabric into 25 different pieces, including the collar, front and back panels, front and back yoke, two pockets, flaps and sleeves.
5. Cutting the quilting fabric into 5 pieces, including the sleeves and the front and back panels. 6. Making up the collar by pressing it with the interlining.
7. Making up the cuffs.
8. Pressing the pocket with the interlining and flaps and stitching the pocket on front chest.
9. Sewing the front and back yoke.
10. Making up the sleeve placket.
11. Making up the front placket.

In country B, the front and back panels, the collar, sleeves, cuffs, quilting and buttons are assembled by sewing into the finished shirt. The finished garment is then pressed and packaged for shipment to the United States (U.S.).

ISSUE:

What is the country of origin of the men's long sleeve quilted western style shirt at issue?

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 or 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 for 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) of the Customs Regulations 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 onto the U.S.

Section 12.130(e) of the Customs Regulations sets forth criteria which aid us in determining whether an article has been subjected to certain manufacturing or processing operations which serve to substantially transform an article into a new and different article of commerce. Specifically, Section 12.130(e)(1)(v) is relevant in the instant case. This Section provides that:

An article or material usually will be a product of a particular foreign territory or country, or insular possession of the U.S., when it has undergone prior to importation into the U.S. in that foreign territory or country, or insular possession any of the following:

(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.)

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, Headquarters Ruling Letter (HRL) 086696, dated June 8, 1990, HRL 082924, dated March 26, 1990, HRL 085611, dated January 17, 1990, HRL 951426, dated April 8, 1992. Thus, in the instant case, the cutting operation performed in country A entitles the cut pieces and made up components there produced to be considered a product of country A. In order for the finished shirt to be considered a product of country B, the assembly operation performed in that country must be substantial.

Section 12.130(e)(1)(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 shirt, one must 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 shirt. This occurs at the time of assembly of the individual component parts into a long sleeve shirt with collar, cuffs, full-frontal opening with plackets and yokes. See, Headquarters Ruling Letter (HRL) 953640 and HRL 954448, both dated Augsut 19, 1993.

In certain country of origin cases, when determining where a substantial transformation has occurred, we have had to address the situation where there is a sub-assembly of component parts in country A and the complete assembly of all the component parts in country B. Previously, we have held that any subassembly (of pieces cut in country A) taking place in country A, resulting in the assembly by sewing of both cut pieces and sub-assembled components in country B, would preclude the finished article from being considered a product of country B. A sub-assembly of even the collar and/or cuffs in country A would usually preclude a determination that country B was the country of origin.

Recently, however, we have permitted some minor subassembly of cut pieces in country A. In HRL 953640, dated August 19, 1993, we determined that origin of the finished product, a men's dress shirt, was in country B, despite the fact that the collar and the cuffs were made up (sub-assembled) in country A. In addition, in HRL 952774 and HRL 954448, both dated August 19, 1993, and involving men's western style shirts and woven dress and sport shirts, respectively, we determined that the country of origin for the shirts was in country B, despite the fact that the collar, in the former case and the cuffs, in the latter case, were made up in country A. In each of these cases, the sub-assembly that took place in country A was considered a minor part of the complete assembly of the garment and, as such, it was deemed non- controlling. In HRL 954448, we stated the following regarding the sub-assembly issue:

Though a sub-assembly operation does take place in Scenario II and III in Country A, it is a minor part of the complete assembly of the garment and should not control the country of origin determination of the shirt. The assembly process in Country B, the time at which all component parts,
including the sub-assembled collar and cuffs, are sewn together, is viewed by Customs as a substantial assembly resulting in a completed garment.

Moreover, in HRL 952639, dated February 22, 1994, we dealt with the country of origin of men's and women's lined jackets wherein the sub-assembly processes in country A were more extensive than in the above two cases and were more akin to the sub-assembly operations in the instant case. In HRL 952639, in country A, the fabric for the men's jacket was cut into component pieces and the following pieces were assembled: the collar, cuffs, sweep bottom, front placket and warmer quilting. Also in country A, the fabric for the women's jacket was cut into its component pieces and the following pieces were assembled: collar, collar quilting, front and back yokes, front and back yoke quilting and quilting for the warmer. These made up components and the remaining cuts pieces, the pockets and warmer, respectively, were shipped to country B, where they were made up and the complete assembly by sewing of all components and pieces into the finished garment was performed.

In HRL 952639 we held that the sub-assembly operations performed in country A were minor operations that produced several components of the finished product. No further assembly of the sub-assembled components took place in country A and all the individual components were assembled by sewing into the finished jackets in country B. Thus, a complete assembly of the components that made up the garment was performed in country B and since the assembly process was considered a complex sewing procedure, we considered it a substantial assembly productive of a substantial transformation.

Therefore, based on the above cited cases, it is our position that it is not necessary that all the cut pieces be assembled in country B to confer origin in that country. Minor sub-assembly operations in country A will not necessarily preclude a determination of origin in country B, provided that there is in country B a complete assembly of the component parts that make up the garment and it is a substantial assembly.

In the instant case, sub-assembly operations take place in country A and all the individual components are attached by sewing into the finished shirt in country B. As with the sub-assembly operations performed on the garments in HRL 952639, the sub- assembly operations at issue are also a minor part of the complete assembly of the garment and should not control the country of origin of the subject shirt. Sewing the individual components of the shirt together, particularly the long sleeves, collar, yokes and plackets, to form the completed shirts, necessitates careful and skilled sewing in the assembly. See, HRL 954448. Therefore, the assembly process in country B, the time at which all the component parts, including the sub-assembled collar, cuffs, pocket, yoke, plackets are sewn together, is viewed by Customs as beyond a simple sewing operation and qualifies as a substantial assembly process. Thus, the country of origin is conferred in country B as this is when a substantial assembly of the completed garment takes place. In addition, a determination that substantial assembly 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.

HOLDING:

The country of origin of the subject men's shirts for quota and visa purposes is country B.

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
Commercial Rulings Division

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