HQ 559828 - Country of Origin Marking; Rain Jackets; 19 CFR Part 12.130 - United States International Trade Commision Rulings

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HQ 559828

May 17, 1996

MAR-02 RR:TC:SM 559828 MLR

CATEGORY: MARKING

Mr. Robert Ledlow
Walls Industries, Inc.
1905 N. Main
Cleburne, TX 76031

RE: Country of Origin Marking; Rain Jackets; 19 CFR Part 12.130

Dear Mr. Ledlow:

This is in reference to your facsimiles of May 6 and 8, 1996, requesting a ruling concerning the country of origin marking on rain jackets. On May 10, 1996, we informed you that the shipment planned for entry after July 1, 1996, will be considered by the Textiles Branch. Accordingly, this letter will only address the May shipments.

FACTS:

In Headquarters Ruling Letter (HRL) 559613 dated May 3, 1996, we determined that the country of origin of certain rain jackets, made from U.S.-origin gortex fabric cut in Hong Kong and assembled in China, would be China for marking purposes pursuant to 19 CFR 12.130(e)(1)(v), for shipments to be entered in May 1996, and 19 CFR 102.21(c)(2) for all shipments to be entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. You now inform us that the jackets are actually made from fabrics cut in Hong Kong, specified parts are sewn in China, and the major assembly, and major seam sealing is performed in Hong Kong. Four production procedure summaries are submitted for four styles of garments. The garments are a "Pro IV Coat," a "Premium Rain Jacket," a "Ladies Rain Jacket," and a "Shikari Rain Jacket." All styles feature a three-piece hood with a visor and a drawstring, two large covered zippered pockets, a rolled hem with an adjustable drawstring, a front zipper covered by a storm fly that snaps, and raglan sleeves with a hook and loop take-up tab at the cuff. The "Pro IV Coat" additionally features a zip-off insulated hood, a self collar with hook and loop take-up tabs, and a zip-out reversible liner.

For the "Pro IV Coat," approximately 17 minutes of sewing time are required in China, and approximately 142 minutes are required in Hong Kong. The assembly operations performed in China involve making two sleeve tabs, the right and left fly, and the hood side shell; and basting the collar. In Hong Kong, the jacket is completely assembled which includes making and sewing together the front jacket shell, the back jacket shell, jacket lining, sewing the chest and bellow pockets to the front jacket shell, joining the yoke to the front and the back, joining the sleeves and collar; inserting the zipper; and making a tunnel with a drawstring.

For the "Premium Rain Jacket" approximately 9 minutes of sewing time are required in China, and approximately 48 minutes are required in Hong Kong. For the "Ladies Rain Jacket" approximately 9 minutes of sewing time are required in China, and approximately 53 minutes are required in Hong Kong. The hood of both jackets is assembled in China, and mesh is serged to the upper jacket portions. In Hong Kong, both styles of jackets are assembled which includes sewing together the front and back jacket shell and the sleeves, joining the hood, inserting the zipper, attaching the pockets, and hemming a tail with a drawstring and the sleeves. The "Shikari Rain Jacket" involves similar assembly processes as the "Premium Rain Jacket" and "Ladies Rain Jacket," except that the "Shikari Rain Jacket" does not contain a mesh lining, and, accordingly, does not involve the assembly of the mesh to the upper jacket portions in China. Approximately 5 minutes of sewing time are required in China, and approximately 47 minutes are required in Hong Kong.

The finished garments will then be imported into the U.S. Two shipments will be imported in May 1996, and another will be imported after July 1, 1996. In a telephone conversation on May 2, 1996, you stated that the jackets to be imported in May, contain a sewn-in label at the inside center of the neck midway between the shoulder seams, a hang-tag, and a sticker on the outside plastic packaging with the markings "Made in Hong Kong."

ISSUE:

What are the country of origin marking requirements of the imported waterproof garments?

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported in the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was "that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements country of origin marking requirements and exceptions of 19 U.S.C. 1304. Because the articles in question are textile products subject to section 204 of the Agricultural Act of 1956, as amended
(7 U.S.C. 1854), and you plan to import shipments in May 1996, section 12.130(d) and (e), Customs Regulations {19 CFR 12.130(d) and (e)}, will still be applicable. Section 12.130, Customs Regulations (19 CFR 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 or 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. See 19 CFR 12.130(b).

According to 19 CFR 12.130(d)(1), 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. According to 19 CFR 12.130(d)(2), the following will be considered in determining whether merchandise has been subjected to substantial manufacturing or processing operations: (i) the physical change in the material or article; (ii) the time involved; (iii) the complexity of the operations; (iv) the level or degree of skill and/or technology required; and (v) the value added to the article in each country or territory. Section 12.130(e), Customs Regulations {19 CFR 12.130(e)}, describes various processes that will confer origin. One of those processes is the "cutting of fabric into parts and the assembly of those parts into the completed article." 19 CFR

In HRL 952639 dated February 22, 1994, Customs considered the country of origin of men's and women's lined water-resistant jackets assembled in country B from pieces of fabric produced, cut and made up in Taiwan. Even though some sub-assembly work occurred in Taiwan, such as the assembly of the collar, cuffs, sweep bottom, front placket, and warmer quilting, it was held that the country of origin of the finished jackets was country B since this was where there was a complete assembly of the component parts that made up the garment, and there was a substantial assembly as opposed to a simple sewing procedure.

In this case, the jackets appear to be similar to those considered in HRL 952639. However, in HRL 952639 the jackets were assembled in a different country from where the fabric was cut and some subassemblies were made. In this case, both the fabric is cut and substantial assembly occurs in Hong Kong, and only some minor sub-assembly work is performed in China. Accordingly, just as the sub-assembly work performed in HRL 952639 did not control the origin determination and the assembly in country B was sufficient enough to confer origin, we conclude that, pursuant to 19 CFR 12.130(e)(1)(iv), the country of origin of the jackets to be entered in May 1996 will be Hong Kong as this is where the fabric is cut and substantial assembly occurs. Therefore, marking the jackets "Made in Hong Kong" with a sewn-in label at the inside center of the neck midway between the shoulder seams will be appropriate.

HOLDING:

On the basis of the information submitted, the country of origin of the jackets to be entered in May 1996 will be Hong Kong for country of origin marking purposes pursuant to 19 CFR

The designated textile and apparel category may be subdivided into parts. If so, the visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service which is updated weekly and is available for inspection at your local Customs office. 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.

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 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 the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it be subsequently 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 19 CFR 177.2. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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

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