HQ 953409 - Country of origin determinition for knit sweaters; Section 12.130 of the Customs Regulations (19 CFR 12.130); country of origin status conferred where fabric is formed; cutting along pre-marked lines, sewing, assembly and packing are not substantial manufacturing operations; HRL 089767 (10/21/92). - United States International Trade Commision Rulings

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HQ 953409

May 13, 1993

CLA-2 CO:R:C:T 953409 SK

CATEGORY: CLASSIFICATION

Lee Seah Weng
Lee Yin Knitting Factory Pte. Ltd.
994 Bendemeer Road #06-07
Singapore 1233

RE: Country of origin determinition for knit sweaters; Section 12.130 of the Customs Regulations (19 CFR 12.130); country of origin status conferred where fabric is formed; cutting along pre-marked lines, sewing, assembly and packing are not substantial manufacturing operations; HRL 089767 (10/21/92).

Dear Mr. Weng:

This is in response to your letter of August 18, 1992, requesting this office to issue you a country of origin determination for knitted sweaters which will undergo one of either two different manufacturing scenarios. You also request instruction as to how this merchandise should be marked for purposes of indicating country of origin. Our analysis follows.

FACTS:

You have submitted two proposed plans for manufacturing knit sweaters. You state that you have two factories, in Singapore and in Malayasia, in which you will be processing the merchandise at issue.

In Plan A, the fabric will be knit and manually cut along demarcated lines in Singapore. The sewing/linking, buttoning (optional), washing (optional), inspection/rework, labeling and packing will take place in Malaysia.

In Plan B, only the knitting of the fabric will take place in Singapore. Cutting along pre-marked lines and all the other processes set forth above will take place in Malaysia.

In your submission to this office you included photographs of the sweater fabric which clearly show cutting lines that have been knitted into the fabric.

ISSUES:

What is the country of origin of the sweaters at issue under the two manufacturing plans proposed by the manufacturer?

How should the merchandise be marked?

LAW AND ANALYSIS:

Country of origin determinations are made pursuant to Section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) of the Customs Regulations 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) of the Customs Regulations sets forth criteria in 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(e)(1) 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, any of the following:

(i) Dyeing of fabric and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing;

(ii) Spinning fibers into yarn;

(iii) Weaving, knitting or otherwise forming fabric;

(iv) Cutting of fabric into parts and the assembly of those parts into the completed article; or

(v) Substantial assembly by sewing and/or tailoring of all cut pieces ...
[emphasis added]

Conversely, Section 12.130(e)(2) provides that, "[A]n 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:

(i) Simple combining operations, labeling, pressing, cleaning or dry cleaning, or packaging operations, or any combination thereof;

(ii) Cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use;

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

(iv) One or more finishing operations on yarns, fabrics, or other textile articles, such as showerproofing, superwashing, bleaching, decating, fulling, shrinking, mercerizing, or similar operations; or

(v) Dyeing and/or printing of fabrics or yarns. [emphasis added]

In applying the above regulations to the manufacturing scenario set forth in Plan A, the garments' country of origin will be Singapore. The operations that take place in Malaysia are deemed simple combining operations and do not serve to confer country of origin status as set forth in Section 12.130(e)(2)(i). Accordingly, the country of origin is where the fabric was formed: Singapore.

In Plan B, the country of origin of the sweaters is also Singapore. As provided in Section 12.130(e)(2)(iii), an article usually will not be considered to be a product of a second country where otherwise completed knit-to-shape component parts from one country have been merely assembled in the second country. Customs has consistently ruled that fabric with cutting lines or other markings which establish the identity of apparel parts will be treated as knit-to-shape components. See Headquarter Ruling Letters (HRL's) 089767, dated October 21, 1992; 088069, dated January 25, 1990; 089155, dated May 29, 1991. Therefore, in this instance the country of origin of the sweaters will be Singapore, where the fabric was knit, as cutting along pre-marked lines of demarcation is not deemed to be a substantial manufacturing process so as to confer country of origin status.

HOLDING:

The country of origin of the sweaters at issue, in both Plans A and B, 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 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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