HQ 0956356 - Country of origin of knit sweaters; 19 CFR 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 956356

June 1, 1994

CLA-2 CO:R:C:T 956356 CAB

CATEGORY: CLASSIFICATION

Robert J. Mele
CSI Industries Inc.
450 Winks Lane
Bensalem, PA 19020

RE: Country of origin of knit sweaters; 19 CFR 12.130, Customs Regulations

Dear Mr. Mele:

This is in response to your inquiry of April 10, 1994, requesting a country of origin determination for knit sweaters. A sample was submitted for examination.

FACTS:

The merchandise in question is a woman's knit sweater described as Style No. 223-942607. The sweater is composed of 100 percent acrylic material. The yarn is sourced in Hong Kong which is referred to as "Country C". The yarn is then transported to Taiwan which is referred to as "Country A", where it is knitted into panels by a flat knitting machine. Once the panels are completed, they are sent to either China or the Philippines, which are referred to as "Country B", where they are linked, finished, and packaged. There are no cutting operations performed in the manufacturing process.

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, 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, the following:

(iii) Weaving, knitting or otherwise forming fabric;

Section 12.130(e)(2), Customs Regulations, states, an article or material usually will not be considered to be a product of a particular foreign territory or country, or insular possession of the U.S. by virtue of merely having undergone any of the following:

(iii) Trimming and/or joining together by sewing, looping, linking, or other means of attaching otherwise completed knit-to-shape component parts produced in a single country, even when accompanied by other processes
(e.g. washing, drying, mending, etc.) normally incident to the assembly process;

The linking together of the knit-to-shape component parts in China or the Philippines falls squarely in 12.130(e)(2)(iii) as an operation that does not confer origin. Knitting fabric into sweater panels by a knitting machine would transform the fabric into new and different articles of commerce. Thus, the processing in Country A (Taiwan) does amount to the complex manufacturing operation necessary to substantially transform an article in accordance with Section 12.130(e)(1)(iii). As the linking and finishing operation in Country B (China or Philippines) is a simple combining operation that does not constitute a substantial manufacturing operation, the processing in Taiwan is considered to be the last substantial manufacturing operation that the merchandise undergoes. Therefore, the country of origin of the subject merchandise is Country A (Taiwan) where it underwent its last substantial transformation.

HOLDING:

The country of origin of the knit sweater at issue is Country A (Taiwan).

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 accordance with section 177.2, Customs Regulations (19 CFR 177.2).

Sincerely,

John Durant, Director
Commercial Rulings Division

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