HQ 953329 - Country of origin determination for knit sweaters - United States International Trade Commision Rulings

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HQ 953329

April 26, 1993

CLA-2 CO:R:C:T 953329 CAB

CATEGORY: CLASSIFICATION

Ms. Catherine Kurz
Lee Yin Inc.
10603 Muirfield Drive
Suite 600
Potomac, MD 20854

RE: Country of origin determination for knit sweaters

Dear Ms. Kurz:

This letter is in response to the inquiry of August 18, 1992, by Lee Seah Weng, requesting a country of origin determination and marking requirements for knitted sweaters. The country of origin question will be addressed in this ruling while the labeling issue will be resolved in a separate ruling by our Value and Marking Branch. No sample was submitted for examination.

FACTS:

In your submission you state that pullover and cardigan sweaters will be constructed of various materials including acrylic, cotton, wool, and ramie cotton. You propose two different manufacturing scenarios. In one scenario, you state that yarn will be knitted into fabric in Singapore. The knit fabric will then be pre-marked into shaped panels by a computer aided manufacturing process. The pre-marked fabric will then be manually cut into sweater pieces. The garment pieces will then be sent to Malaysia to undergo further processing. The processing in Malaysia will include sewing, attaching buttons, washing, steam ironing, labeling, and packing for export to the United States. The manufacturing process involved in the second proposed scenario is similar to the processing involved in the first scenario. The only difference between the two scenarios is the country in which the manual cutting process will be completed. In the second scenario, the pre-marked fabric will be cut into garment pieces in Malaysia.

ISSUE:

What is the country of origin for 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

(iii) The complexity of the manufacturing or processing

(iv) The level or degree of skill

(v) The value added to the article or material

Section 12.130(e)(1), Customs Regulations, states that an article or material usually will be a product of a particular country when it has been subject to weaving, knitting or otherwise forming fabric in that country.

In both of the suggested scenarios, Singapore is the country where the fabric used to construct the finished product is knitted. Singapore is also the country where the knitted fabric is pre-marked into readily identifiable sweater panels. The pre- marking of the fabric in Singapore dedicates that fabric to sweater parts. The manufacturing operation in Malaysia which includes the cutting and sewing of pre-marked garment pieces does not require a high degree of skill or technology. This processing amounts to a simple joining and finishing operation which does not result in a substantial transformation within the purview of Section 12.130. As the sweater fabric is formed in Singapore and the subsequent processing in Malaysia does not amount to a substantial manufacturing operation, the forming and marking of the fabric in Singapore is considered the time at which the last substantial transformation occurred. This conclusion comports with the conclusion reached by Customs in Headquarters Ruling Letter 088069, dated January 25, 1991. In HRL 088069 Customs determined that the last substantial transformation of fabric that had been knitted and pre-marked into sweater pieces in Singapore and then sent to Malaysia for cutting and joining together into a finished sweater occurred in Singapore.

HOLDING:

The country of origin of the knit sweaters under each set of facts presented is Singapore.

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 of 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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