United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1996 HQ Rulings > HQ 559032 - HQ 559296 > HQ 559151

Previous Ruling Next Ruling
HQ 559151




June 22, 1995

CLA-2 CO:R:C:S 559151 BLS

CATEGORY: MARKING

TARIFF NO.: 6110.30.3045

Michael Stein, Esq.
Harmonized Customs Brokers, Inc.
Cargo BLDG. #10, JFK Int'l Airport
Jamaica, N.Y. 11430

RE: Country of Origin Marking requirements of sweatshirt embroidered in Haiti; 19 CFR 12.130; substantial transformation; classification

Dear Mr Stein:

This is in reference to your letter dated November 30, 1994, on behalf of Dimensions Inc., requesting country of origin marking requirements and the proper classification of an embroidered sweatshirt to be imported from Haiti. A sample of the unisex sweatshirt and an embroidery kit have been submitted.

FACTS:

The sample unembroidered sweatshirt has been examined by our New York office, which reports that it has long sleeves with rib knit cuffs, a rib knit waistband and a round, rib knit neckband. The neckband has no opening or closure that starts at the neck. The inside of the sweatshirt is napped and the fiber content is 50 percent cotton and 50 percent polyester. The embroidery kit consists of cotton yarns of various colors, a hand sewing needle, a paper device with holes to aid in sewing, a woven fabric piece (10 inches by 7 inches) called a "waste canvass", and an English language instructional pamphlet.

The shirt and embroidery kit, both of U.S.-origin, are exported to Haiti where the design will be cross-stitched on the shirt using a waste canvass as a grid. When the design is finished, the threads of the waste canvass are pulled out. The finished product is a shirt embellished with a cross-stitched design.

The completed item will not be sold as a shirt, but will be used as a display sample, for the purpose of selling kits.

ISSUES:

1) What is the classification of the embroidered sweatshirts?

2) What are the country of origin marking requirements for the imported sweatshirts?

LAW AND ANALYSIS:

1) Classification

Since the embroidery is a form of decoration or trimming, it is not included in the determination of the sweatshirt's fiber content in chief weight. Therefore, the correct fiber content for both the embroidered and non-embroidered sweatshirt is 50% cotton, 50% polyester. Since the tariff provision for man-made fiber knitted sweatshirts appears after that for cotton knitted sweatshirts, the submitted sample is classifiied as a man-made fiber knitted sweatshirt. See Section XI, Subheading Note 2(A), HTSUS, and Legal Note 2(A), HTSUS. Unisex apparel is classified as womenswear. See Note 8, Chapter 61, Harmonized Tariff Schedule of the United States (HTSUS). The sample submitted is properly classified under the provision for "Sweaters, pullovers, sweatshirts...knitted or crocheted, Of man-made fibers: Other, Other, Sweatshirts, Women's or girls' ", in subheading 6110.30.3045, HTSUS.

2) Country of Origin Marking

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S.shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Section 12.130, Customs Regulations (19 CFR 12.130), sets forth the principles for country of origin marking determinations for textile and textile products subject to section 204 of the Agricultural Act of 1956 as amended (7 U.S.C. 1584).

Under 19 CFR 12.130, the standard of substantial transformation governs the determination of the country of origin where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory, country, or insular possession where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new or different article of commerce, and such transformation is the result of substantial manufacturing or processing operations. See 19 CFR 12.130(b).

Section 12.130(d)(1), Customs Regulations (19 CFR 12.130(d)(1)), provides that a new or
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) of the regulations lists some of the factors considered in determining whether a manufacturing operation has occurred. These factors include: (1) the physical change in the material or article as a result of the manufacturing or processing operations in each foreign country; (2) the time involved in the manufacturing or processing operations in each foreign country; (3) the complexity of the manufacturing or processing operations in each foreign country; (4) the level or degree of skill and/or technology required in the manufacturing or processing operations in each foreign country; and (5) the value added to the article or material in each foreign country compared to its value when imported into the U.S.

Customs has previously ruled that embroidery work performed on garments which does not change the identity or fundamental character of the article is not a substantial transformation. See Headquarters Ruling Letter (HRL) 733952 dated February 15, 1991 (decorating front panels of an unfinished track suit with plastic ornaments, appliques and embroidery in China was not a substantial transformation of the article); and HRL 734275 dated October 8, 1991 (decorating two front panels of a women's vest with embroidery was not a substantial transformation since it did not change the identity or fundamental character of the panels.)

Similarly, in the instant case, we find that the embroidery work performed on the sweatshirt does not change the identity or fundamental character of the article. Therefore, the operations performed in Haiti do not result in a substantial transformation of the U.S.-origin sweatshirt and thread.

However, 19 CFR 12.130(c)(1) provides that notwithstanding paragraph (b) (relating to substantial transformation), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, HTSUS ("Note 2"), may not, upon its return to the U.S., be considered a product of the U.S. Note 2 provides that any product of the U.S. which is returned after having been advanced in value or improved in condition abroad, or assembled abroad, shall be a foreign article for the purposes of the Tariff Act of 1930, as amended.

As the embroidery process in this case will advance the value of the sweatshirts and the thread, the country of origin of the returned article will be Haiti. Therefore, the sweatshirts must be marked with Haiti as the country of origin..

It is noted that subheading 9802.00.80, HTSUS, provides a partial duty exemption for articles assembled abroad in whole or in part of fabricated components, the product of the U.S., which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by operations incidental to the
assembly process such as cleaning, lubricating, and painting. Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components, such as welding, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners.

If you desire to obtain a ruling with respect to the applicability of subheading 9802.00.80, HTSUS, you must provide us with additional information regarding the operations performed abroad, specifically, whether any of the waste canvass remains on the sweatshirt after completion of the sewing operations in Haiti, or whether all of the threads are removed after the design is completed.

HOLDING:

1) An embroidered unisex sweatshirt imported from Haiti of 50 % cotton, 50 % polyester is classified as a man-made fiber knitted sweatshirt. The article is properly classifiable under the provision for "Sweaters, pullovers, sweatshirts...knitted or crocheted, Of man-made fibers: Other, Other, Sweatshirts, Women's or girls' ", in subheading 6110.30.3045, HTSUS.

2) An embroidery operation performed on a unisex sweatshirt does not result in a substantial transformation of the U.S.-origin sweatshirt and embroidery materials under 19 CFR 12.130(b). However, notwithstanding this provision, since the sweatshirt has been advanced in value or improved in condition in Haiti, it may not be considered a product of the U.S. upon return from abroad. (See 19 CFR 12.130(c)(1) and Chapter 98, Subchapter II, Note 2, HTSUS.) Therefore, the sweatshirt must be marked with Haiti as the country of origin.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling

See also: