HQ 958365 - Country of origin determination of a karate uniform; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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 958254 - HQ 958366 > HQ 958365

Previous Ruling Next Ruling
HQ 958365

December 12, 1995

CLA-2 RR:TC:TE 958365 CAB

CATEGORY: CLASSIFICATION

Mr. Ken C. Deng
General Manager
Kuang Fong Industrial Co., Ltd.
2F No. 192, Sec 2
Shi Yuan Road, 108
Taipei, Taiwan R.O.C.

RE: Country of origin determination of a karate uniform; Section 12.130, Customs Regulations

Dear Mr. Deng:

This is in response to your request of August 18, 1995, for a country of determination on karate uniforms. A sample was submitted for examination. Your sample will be returned under separate cover .

FACTS:

The karate uniform at issue is comprised of a pair of trousers and an upper body garment which are both made up of 50 percent cottton/50 percent polyester fabric. The trousers contain an elasticized waistband and drawstring means of closure. The top has side slits and a fully opened front that closes with ties attached in the interior of the garment.

The manufacturing process is as follows: Fabric is woven, dyed, and cut into garment pieces in Taiwan. The fabric along with trimmings are then transported to China where they are assembled and sewn into the finished garments.

ISSUE:

What is the country of origin of the subject merchandise?

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)(iv), Customs Regulations, specifically provides that the cutting of fabric into parts and the assembly of those parts into the completed article will be a manufacturing operation that will usually result in an article being considered a product of the country in which those operations occurred.

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, 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 operations performed in China involve the simple assembly of various garment pieces. The sewing does not amount to the complex sewing operation required in Section 12.130(e)(1)(v). The cutting process in Taiwan does result in a substantial transformation. The cutting materially alters the fabric into designated garment pieces, which constitute new and different articles of commerce. Therefore, the subject garments are products where the fabric was cut into garment pieces, Taiwan.

HOLDING:

The country of origin of the subject karate uniform is Taiwan.

However, you should be aware that on December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing Sect. 334 (60 FR 46188). Section 334 generally provides, with certain exceptions, that the origin of textile goods will be the country in which they are assembled. The subject garments are not within the products excepted from the assembly rule. Accordingly, based on the facts stated above, effective July 1, 1996, the country of origin of the subject garments will be China.

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 of 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.

Sincerely,

John Durant, Director
Tariff Classification

Previous Ruling Next Ruling