HQ 956957 - Country of origin determination for knitted upper body garment; fabric knit and cut in Taiwan; simple assembly in China; 19 CFR 12.130(b)(d)(e); cutting constitutes substantial transformation. - United States International Trade Commision Rulings

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HQ 956957

November 25, 1994

CLA-2 CO:R:C:T 956957 SK

CATEGORY: CLASSIFICATION

Roger Lew
Janeve Sport, Inc.
13837 Magnolia Ave.
Chino, CA 91710

RE: Country of origin determination for knitted upper body garment; fabric knit and cut in Taiwan; simple assembly in China; 19 CFR 12.130(b)(d)(e); cutting constitutes substantial transformation.

Dear Mr. Lew:

This is in response to your letter of July 25, 1994, in which you request a country of origin determination for one style of knit upper body garment, referenced style number 3101. A sample of the finished garment was submitted to this office for examination, as was a bundle of the garment's constituent pieces.

FACTS:

You have requested a country of origin determination for a women's knit jacket, referenced style number 3101. The jacket features a full-front, zippered opening, long sleeves with rib knit cuffs, a rib knit bottom, a shirt collar and two applied front pockets which form a front pouch. The garment's fabric is made from 65 percent polyester and 35 percent cotton and is napped on the inside. The fabric has more than nine stitches per two centimeters measured in the horizontal.

You submit that the garment's fabric is knit and cut into component pieces in Taiwan. In China, the garment is assembled by sewing and then packaged for export. You state that the cost incurred in Taiwan is $25.00 per dozen garments. The cost incurred in China is $5.00 per dozen garments.

ISSUE:

What is the country of origin of style 3101?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject 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) 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(d)(1) 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;
(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;

(v) The value added to the article or material;

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 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 (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 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)."

This office has consistently 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 Headquarters Ruling Letters (HRL's) 082747, dated February 23, 1989; 086665, dated March 23, 1990; 951169, dated April 1, 1992; 951437, dated July 17, 1992; 952647, dated January 27, 1993.

In the instant case, the assembly operations performed in China are mere combining and sewing operations and do not possess the requisite degree of complexity to be deemed substantial
manufacturing processes for purposes of conferring country of origin status. No great degree of skill or advanced technology is required, nor is tailoring involved. The cutting operations in Taiwan, however, materially alter the fabric into designated garment pieces. This constitutes a substantial transformation of that fabric and Taiwan is the country of origin for the subject garment.

HOLDING:

The country of origin of style 3101 is Taiwan. It is during the cutting process in Taiwan that the fabric last undergoes a substantial transformation and is transformed into a new and different article of commerce (knit jacket) by means of substantial manufacturing operations (cutting the fabric into designated garment parts).

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,

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