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HQ 955800




May 18, 1994

CLA-2 CO:R:C:T 955800 CMR

CATEGORY: CLASSIFICATION

TARIFF NO.: 6107.11.0010, 6111.20.6040, 6109.10.0012, 6105.20.2010

Mark F. Tesone, Esq.
Crowell & Moring
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2595

RE: Country of origin of certain textile apparel articles processed in Australia and the People's Republic of China

Dear Mr. Tesone:

This is in response to your submission of January 26, 1994, on behalf of your client, Pacific Brands, Ltd., requesting a ruling on the country of origin, classification and applicable quota/visa requirements for certain textile apparel articles processed in Australia and the People's Republic of China. Samples of cut component parts and of finished garments were received with your submission.

FACTS:

The garments at issue include men's hipster briefs, infant jumpsuits, men's T-shirts and men's polo shirts. The garments will be made of Australian-origin knit fabric which is dyed and cut into component parts in Australia. The cut components and accessories (of various origins, but purchased in Australia) will be sent to the People's Republic of China (hereinafter China) for assembly into the finished garments. The garments will be packed in China in packaging material of Australian origin and then returned to Australia for export to the United States through the ports of New York and Los Angeles. In the future, the finished garments may be exported to the United States directly from China.

The men's hipster briefs, style B13845, are made of 100 percent cotton interlocking knit construction and range in size from 75cm waist to 105cm waist. The briefs are hemmed, with elastic inserted into the hem, at the top and at the leg openings. The briefs have a smooth front and are available in various colors.

According to your submission, the hipster brief will be made of fabric which is knit and dyed in Australia. The fabric is cut into four component pieces. The cut pieces and accessories (elastic; thread; packaging material including hangers, bar codes, plastic wrapping, labels, hang tags, and cardboard; purchased in Australia) will be shipped to China for assembly and packing. The assembly entails joining the cut components and elasticizing and hemming the top and leg openings. We note that the submitted sample is different from your description of the garment in that the sample consists of one piece, not four as your submission indicates. This will not affect the outcome in this case, but the sample does not match the description.

The infants' jumpsuits or coverup, referred to as the Bonds Wondersuit, style 95647, are made of 70 percent cotton/30 percent nylon knit terry fabric. The submitted garment is a one-piece garment with a full-front opening secured by nine snaps. The frontal opening extends partially down each leg for easier changing. The garment features long sleeves with cuffs, a partially elasticized waist (in rear), a peter pan collar and enclosures for the feet. The garment is available in sizes 000, 00, 0 and 1.

The fabric for the jumpsuits will be knit, dyed and finished in Australia. It will then be cut into ten designated garment parts. The cut garment parts, along with accessories purchased in Australia (thread, elastic, snaps, snap sockets, product tags, hangers, stickers, and plastic) will be shipped to China for assembly and packing.

The men's T-shirts, described as the Bonds Athletic T-shirt, style 439BA2, are made of 100 percent cotton knit jersey fabric. The submitted sample has a round, rib knit neck; short, hemmed sleeves and a hemmed, straight bottom. The garment weighs 180 grams per square meter. The garment is available in sizes extra- small, small, medium, large and extra-large.

The fabric for the men's T-shirts will be knit and dyed in Australia. It will be cut in Australia into five garment components (a front panel, a back panel, 2 sleeves and 1 collar). The cut components, along with accessories purchased in Australia (pins, product tags and packaging materials--cardboard and paper wrappers) will be sent to China for assembly and packing.

The men's polo shirts, referred to as the Bonds Original Penguin Shirt (styles 939KM and 939NR), are made of 35 percent cotton/65 percent nylon pique knit fabric. The shirts feature rib knit spread collars; a partial front opening with a three button left over right placket; short sleeves with rib knit cuffs; Penguin logo attached to the left chest; and a hemmed bottom. Style 939KM also has a patch pocket on the left chest. -3-

The polo shirts will be available in sizes small, medium, large and extra-large (chest sizes 34", 40" and 46").

The fabric for the men's polo shirts will be knit, dyed and finished in Australia. The fabric will be cut in Australia into six or seven garment pieces (a front panel, a back panel, 2 sleeves, 1 collar, 1 piece of ribbing, and 1 pocket for style 939KM). The cut components, along with accessories purchased in Australia (buttons, pins, thread, product tags, and packaging material--cardboard, paper wrappers and plastic), will be shipped to China for assembly and packing.

You submit that the assembly in China for all the subject garments involves only simple combining and packing and does not require highly skilled workers.

ISSUE:

What is the country of origin of the men's briefs, infants' jumpsuits, men's T-shirts and polo shirts?

What is the proper classification under the Harmonized Tariff Schedule of the United States for the subject goods?

What are the quota/visa requirements for the subject goods?

LAW AND ANALYSIS:

Determinations of the country of origin of textiles and textile products are governed by the terms of section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) provides that a textile or textile product which is processed in more than one country will be considered a product of that country where it last underwent a substantial transformation. A substantial transformation is defined therein as a transformation by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d)(1) provides 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) sets out factors which will be considered in determining if merchandise has been subjected to substantial manufacturing or processing operations. These factors are:

(i) The physical change in the material or article as a result of the manufacturing or processing operations; (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; and, (v) The value added to the article or material in each foreign territory or country compared to its value when imported into the U.S.

Section 12.130(e)(1) states, in pertinent part, that an article will usually be a product of a particular country when it has undergone in that particular country:

(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 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).

Customs has consistently held that the cutting of fabric into garment pieces is a substantial transformation of the fabric and the garment pieces become a product of the country in which they are cut. We have also consistently held that when garment parts are cut in one country and the garment is assembled in another country, unless the assembly operation is a substantial assembly such as that referred to in 12.130(e)(1)(v), the country of origin remains the country in which the garment parts are cut. See, HRL 088235 of March 15, 1991, and rulings cited therein.

In regard to the subject garments, the cutting of the fabric into garment pieces in Australia is a substantial transformation of the fabric and thus the origin of the garment pieces is Australia. The assembly of the garment pieces into finished men's briefs, infants jumpsuits, men's T-shirts and men's polo shirts does not constitute a substantial transformation as it only requires simple sewing and so does not meet the substantial assembly requirement of 12.130(e)(1)(v). Thus, the country of origin of the goods is the country in which the last substantial transformation occurs, i.e., where the garment pieces are cut, Australia.

HOLDING:

The country of origin of the men's hipster briefs, infants' jumpsuits, men's T-shirts and men's polo shirts, cut in Australia and assembled in China, is Australia.

As to the classification of the subject merchandise, the men's hipster briefs are classifiable in subheading 6107.11.0010, HTSUSA, which provides for men's cotton underpants and briefs. The briefs are dutiable at 7.9 percent ad valorem. The infants' jumpsuits are classifiable in subheading 6111.20.6040, HTSUSA, which provides for babies' knit or crocheted garments, of cotton, other. They are dutiable at 8.6 percent ad valorem. The men's cotton T-shirts are classifiable in subheading 6109.10.0012, HTSUSA, which provides for men's other T-shirts, of cotton. The garments are dutiable at 21 percent ad valorem. The men's polo shirts are classifiable in subheading 6105.20.2010, HTSUSA, which provides for men's knitted or crocheted shirts of man-made fibers, other. The polo shirts are dutiable at 34.6 percent ad valorem.

As to your question regarding visa/quota requirements, currently there are no visa/quota requirements for the subject merchandise from Australia.

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding is 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.

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 your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Rulings Division

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