HQ 955213 - Country of origin of men's shirts - United States International Trade Commision Rulings

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HQ 955213

January 26, 1994

CLA-2 CO:R:C:T 955213 CAB

CATEGORY: CLASSIFICATION

Mr. Samuel Chow
Taiwan Garments Manufacturing
Company Ltd.
P.O. Box 82
Taipei, Taiwan

RE: Country of origin of men's shirts

This is in response to your inquiry of October 5, 1993, requesting a country of origin determination for men's shirts. Illustrations of the subject garments were included in your submission.

FACTS:

There are two types of shirts at issue. One style is described as a men's long sleeve woven shirt. The shirt contains a full frontal opening and button closure, a front placket, a collar, a front breast pocket, sleeve plackets, and cuffs. The other style at issue is a short sleeve men's shirt which is constructed essentially the same as the long sleeve shirt except that it has short sleeves without plackets or cuffs. The manufacturing steps for the long sleeve shirt are as follows: Fabric is woven and cut into garment pieces in Taiwan which is referred to as Country A; The collar is pressed and fused to interlining; The collar, cuffs, and sleeve plackets are assembled; The garment pieces, including the assembled collar, cuffs, and sleeve plackets, are then sent to Country B for sewing, assembly, and packaging. The manufacturing steps for the short sleeve shirt are as follows: Fabric is woven in Taiwan; The fabric is then cut into garment pieces which include the collar, front and back panels, the yoke, front pockets, and sleeves. Also in Taiwan, the collar is fused to the interlining, a placket is created, and buttons and buttonholing is inserted. The garment pieces are then sent to Country B where the front and back panels, collar, and sleeves are assembled, pressed, and packaged for exportation.

ISSUE:

What is the country of origin of the merchandise at issue?

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 required

(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 operation 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 situation 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 e.g. HRL 082787, dated March 9, 1989; and HRL 082747, dated February 23, 1989).

In this case, the sewing operation performed in Country B or any other country concerning the short sleeve shirt involves the simple assembly of various garment pieces. The sewing does not amount to the complex sewing operation required by Section 12.130(e)(1)(v). The cutting process in Country A (Taiwan), however, does constitute a substantial manufacturing operation. The cutting operation materially alters the fabric into designated garment pieces, which constitute new and different articles of commerce. Therefore, in accordance with prior Customs rulings and Section 12.130(e), the short sleeve shirt is subject to the last substantial transformation in Country A (Taiwan), where it was cut into garment pieces.

In HRL 954448 dated August 19, 1993, Customs was confronted with a country of origin determination for a long sleeve men's shirt which contained plackets, a yoke and a collar. The garment was very similar in design to the subject long sleeve shirt. Customs defined substantial assembly in HRL 954448 as that operation, whether by sewing or tailoring, when all the components of the garments are attached together to form that completed shirt. Customs further stated that a substantial transformation occurs at the time of assembly of the individual component parts into a long sleeve shirt with collar, cuffs, full-front opening with plackets, and shoulder yokes.

When determining the country of origin of the long sleeve shirt in light of HRL 954448, it appears that the complete assembly in Country B is more than a simple sewing operation. Instead, the complete assembly of the cut components, including the cut pieces and previously assembled collar, cuff, and sleeve plackets, requires the requisite skill and technology for a substantial assembly in accordance with Section 12.130(e)(1), Customs Regulations, and therefore, constitutes a substantial transformation.

HOLDING:

The country of origin of the short sleeve shirt at issue is Country A (Taiwan). The country of origin of the long sleeve shirt is Country B where a substantial assembly operation occurs.

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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