HQ 0956167 - Country of origin of boxer shorts, trousers, and shorts; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 956167

June 29, 1994

CLA-2 CO:R:C:T 956167 CAB

CATEGORY: CLASSIFICATION

Diane L. Weinberg, Esq.
Sandler, Travis & Rosenberg, P.A.
505 Park Avenue
New York, NY 10022-1106

RE: Country of origin of boxer shorts, trousers, and shorts; Section 12.130, Customs Regulations

Dear Ms. Weinberg:

This is in response to your inquiry of March 29, 1994, on behalf of Pacific Garment Manufacturing Pte., Limited, and Vilco Pte. Ltd., concerning the country of origin of various garments. Samples were submitted for examination.

FACTS:

The articles in question are referred to as Exhibits A-E. Exhibit A is a pair of basic 5-pocket denim jeans with a fly front and a zippered closure. Exhibit B is a pair of basic 5-pocket denim shorts with a fly front and a zippered closure. Exhibit C is a pair of cotton flannel boxer shorts that contain an elasticized waistband and a fly front with double buttons. Exhibit

D is a pair of cotton boxer shorts that contain a contrasting elasticized waistband and a fly front with double buttons. Exhibit E is a pair of cotton khaki trousers which possess a zippered fly front and single button closure, belt loops, side pockets, double pleats, and two back pockets.

The garments are made of piece goods from China or Hong Kong. The piece goods are then transported to Singapore where they are cut into shaped garment pieces. These cut components are then sent to either Sri Lanka or Indonesia for assembly into the completed garments. After assembly, some of the garments may be finished and packaged either in the country of assembly or Singapore. The boxer shorts will be finished and packaged only in the country of assembly.

ISSUE:

What is the country of origin of the merchandise in question?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 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), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states 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), 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), Customs Regulations, states that for 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 operation;

(iii) The complexity of the manufacturing or processing operation;

(iv) The level or degree of skill and/or technology; and,

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

Section 12.130(e)(1), 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).

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 situations as they arise, utilizing the criteria in Section 12.130(d).

Customs has consistently determined that cutting fabric into garment pieces constitutes a substantial transformation of the fabric and the clothing pieces become products of the country where the fabric is cut. (See e.g. Headquarters Ruling Letter (HRL) 952531, dated November 25, 1992, HRL 089539, dated April 22, 1992).

Customs has also 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 HRL 092787, dated March 9, 1989; and HRL 082747, dated February 23, 1989).

In this instance, the sewing operation performed in Sri Lanka or Indonesia involves the simple assembly of garment pieces. The sewing does not amount to the complex sewing operation required by Section 12.130(e)(1)(v). The cutting process in Singapore, however, does result in a substantial manufacturing operation. The cutting materially changes the fabric into designated garment pieces, which constitutes new and different articles of commerce. Also, the value added to the subject garment in Singapore is substantially more than the value added to the goods in the country of assembly. Therefore, the garments in question are products of Singapore.

HOLDING:

The country of origin of Exhibits A-E is Singapore.

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Sincerely,

John Durant, Director

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