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HQ 956843


October 21, 1994

CLA-2 CO:R:C:T 956843 GG

CATEGORY: CLASSIFICATION

TARIFF NO.: 6106.20.2010

Robert T. Stack, Esq.
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd Floor
New York, New York 10036-8901

RE: Classification and country of origin of a woman's knit blouse

Dear Mr. Stack:

This is in response to your July 12, 1994 request for a binding ruling on the tariff classification, country of origin and marking requirements of a woman's knit blouse. Your client is Liz Claiborne, Inc. We will address the classification and country of origin issues in this letter. The Special Classification and Marking Branch will issue a marking ruling under separate cover.

FACTS:

The merchandise at issue is a woman's 100% polyester knit blouse, known as Style No. V4460174. The blouse has a round neckline, rear opening with a single button closure, short sleeves, shoulder pads, and a straight hemmed bottom. The fabric contains more than 10 stitches per centimeter measured in both directions.

The unmarked fabric will be cut into the blouse's eight fabric components in Korea. The components consist of a single front panel; a single back panel; two sleeve panels; two shoulder pad coverings; and the capping pieces for the neckline and the neck opening.

The cut components will be sent to the People's Republic of China ("China") for assembly. The assembly operations will consist of sewing the components together by machine and attaching textile labels and buttons. Only 15% of the total F.O.B. cost per garment will be attributable to the assembly charge in China plus freight between the countries.

ISSUE:

What are the proper classification and the country of origin of the woman's knit blouse?
LAW AND ANALYSIS:

Articles are classified under the Harmonized Tariff Schedule of the United States (HTSUSA) in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that articles are classifiable according to the terms of the headings and any relative section or chapter notes and, provided the headings or notes do not otherwise require, according to the remaining GRI's taken in order.

The classification of the blouse is not in dispute. Heading 6106, HTSUSA provides for "women's or girls' blouses and shirts, knitted or crocheted". Chapter Note 4 states that this heading does not cover garments with pockets below the waist, with a ribbed waistband or other means of tightening at the bottom of the garment, or garments having an average of less than 10 stitches per linear centimeter in each direction counted on an area measuring at least 10 centimeters by 10 centimeters. Style No. V4460174 is a woman's knitted blouse, without pockets, ribbed waistband or bottom tightening method, and has more than 10 stitches per linear centimeter measured in both directions. Therefore, it is classifiable under this heading.

Country of origin determinations for textile products are made pursuant 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)(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; (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; and
(v) The value added to the article or material. Section 12.130(e)(1) of the Customs Regulations describes manufacturing or processing operations from which an article usually will 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 completed assembly and tailoring of all cut pieces of suit-type jackets, suits, and shirts).

According to Treasury Decision (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 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, resulting in the pieces becoming products of the country where the fabric is cut. See Headquarters Ruling Letter (HRL) 956632, dated August 18, 1994; HRL 955123, dated January 27, 1994; HRL 954448, dated August 19, 1993; and HRL 953698, dated July 19, 1993.

It has also been Customs' position that the mere assembly of goods by 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 956632; HRL 954728, dated October 22, 1993; HRL 953697, dated July 26, 1993; HRL 955123; and HRL 952647, dated January 27, 1993.

In this instance, the blouses will be assembled in China through relatively simple sewing operations. The assembly requires straight stitching, without tailoring. The sewing is not complex enough to be deemed a substantial assembly under Section 12.130(e)(1)(v). Therefore, the country of origin of the blouses is the country in which the garment pieces are cut, i.e., Korea.
HOLDING:

The woman's knit blouse is classifiable under subheading 6106.20.2010, HTSUSA, as a woman's blouse, knitted or crocheted, of man-made fibers, other. The textile quota category is 639, and the duty rate is 34.6% ad valorem.

The country of origin of the blouse is Korea.

This ruling is issued pursuant to the provisions of Part 177 of the 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.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are the subject of frequent negotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at the local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact the local Customs office prior to importing the merchandise to determine the current status os any import restraints or requirements.

Sincerely,

John Durant
Director, Commercial

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