HQ 957612 - Country of origin men's trousers; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 957612

May 12, 1995

CLA-2 R:C:T 957612 CAB

CATEGORY: CLASSIFICATION

Harold I. Loring, Esq.
Grunfeld, Desiderio, Lebowitz & Silverman 245 Park Avenue
New York, NY 10167-0002

RE: Country of origin men's trousers; Section 12.130, Customs Regulations

Dear Mr. Loring:

This is in response to your inquiry dated January 13, 1994, on behalf of Mast Industries, Inc., requesting a country of origin determination for men's woven pants. Since Customs received the inquiry January 17, 1995, we are assuming that the date on the inquiry was incorrect. A sample was submitted for examination. This is a prospective request.

FACTS:

The garment at issue is a pair of men's woven trousers. The pants contain a zippered front opening, belt loops, two side pockets, two back pockets, and cuffs.

Fabric from a country such as Hong Kong will be transported in bolts to the Maldives for processing. In the Maldives, the fabric will be cut into component parts for men's woven pants. The cut garment pieces will then be exported to Sri Lanka for assembly and finishing operations. The finishing operations include washing, pressing, and packing.

The details of production are as follows: The value of the fabric in each garment will be approximately $3.40; The cost of cutting component parts in the Maldives is estimated to be $0.72; The cost of assembly and finishing in Sri Lanka is estimated to be $2.00, while assembly and finishing in Sri Lanka will take forty minutes.

ISSUE:

What is the country of origin of 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 subsequent 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 in the manufacturing or processing operations; and

(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), Customs Regulations, 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 operations 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, and 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 instance, the sewing and finishing operation performed in Sri Lanka 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 the Maldives does result in a substantial transformation. The cutting materially changes the fabric into designated garment pieces, which constitute new and different articles of commerce. Therefore, the subject garment is a product of the country where the fabric was cut into garment pieces, the Maldives.

HOLDING:

The country of origin of the subject pants is the Maldives.

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

Sincerely,

John Durant, Director
Commercial Rulings Division

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