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HQ 560106




March 7, 1997

MAR 2-10 RR:TC:SM 560106 KBR

CATEGORY: MARKING

Diane Stehl
Wells Lamont
6640 West Touhy Avenue
Niles, IL 600714-4587

RE: Country of origin determination for knit gloves; 19 CFR ?102.21(c)(3)(ii); 19 CFR ?12.130(c); T.D. 90-17.

Dear Ms. Stehl:

This is in response to your letter dated August 19, 1996, concerning the country of origin marking of knit gloves which you intend to import into the U.S. You presented three questions: 1) the appropriate country of origin marking for gloves of U.S. materials assembled outside the U.S. and imported as U.S. goods returned; 2) the appropriate country of origin marking for knit to shape gloves which are knit to shape in the U.S. and sent with other U.S. components to Mexico for assembly; and 3) the country of origin of gloves in which the fabric is knit in China and cut and assembled in Sri Lanka or Indonesia. The third issue was addressed separately in HQ 959735 (October 3, 1996). This ruling addresses only the first and second issues.

FACTS:

1) Gloves Assembled Abroad With Components Cut to Shape in the U.S.

In the first scenario, you state that you use U.S.-origin fabric which is then cut into glove pieces in the U.S. The glove pieces are then shipped to Jamaica, Haiti or Mexico for assembly. You import the gloves under subheading 9802.00.80, Harmonized Tariff Schedule of the U.S. ("HTSUS"), with a duty allowance for the value of the U.S. fabric pieces. In your previous importations under this scenario you have been marking the gloves as "U.S. components assembled in (Jamaica, Haiti or Mexico)", whichever individual country was appropriate.

2) Gloves Knit to Shape in the U.S. - Assembled in Mexico

In the second scenario, you state that you manufacture a knit to shape glove in the U.S. of U.S. yarn. This is shipped to Mexico where it is assembled with a U.S.-made glove insert and a U.S.-made hook and loop' type fastener. In Mexico, the glove insert is sewn in, the hood of the glove is attached and the Velcro is applied.

ISSUE:

What is the proper country of origin marking for the gloves in the two scenarios described above?

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 into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article 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 the country of origin marking requirements and the exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "country of origin" as the country of manufacture, production or growth of any article of foreign origin entering the U.S.

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 Section 334 (60 Fed. Reg. 46188). Customs found that the regulations promulgated pursuant to the Uruguay Round Agreement Act are used to determine the country of origin of imported textile articles and whether an imported textile article remains an article of foreign origin' after it undergoes processing in the U.S. See HQ 559625 (January 19, 1996).

Thus, effective July 1, 1996, the country of origin of a textile or apparel product is determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of section 102.21.

Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of section 102.21 is inapplicable.

Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section:".

We have determined that the proper classification of the subject articles is within heading 6116 of the Harmonized Tariff Schedule of the United States (HTSUS). The applicable rule is found at 19 CFR ?102.21(e), 6101-6117 which requires:

(1) If the good is not knit to shape and consists of two or more component parts, a change to an assembled good of heading 6101 through 6117 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

(2) If the good is not knit to shape and does not consist of two or more component parts, a change to heading 6101 through 6117 from any heading outside that group, except from heading 5007, 5111 through 5113, 5208 through 5212, 5309 through 5311, 5407 through 5408, 5512 through 5516, 5806, 5809 through 5811, 5903, 5906 through 5907, and 6001 through 6002, and subheading 6307.90, and provided that the change is the result of a fabric-making process.

(3) If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession.

In the first scenario, the gloves fall within (1) above. The pieces are not knit to shape and consists of two or more components. The gloves are wholly assembled in one of three different countries: Jamaica, Haiti or Mexico. Therefore the country of origin of the gloves will be the one country of assembly. The country of origin marking you wish to use, "U.S. components assembled in _______", where the blank will indicate the single country of origin of the assembled glove, is an acceptable country of origin marking for the first scenario.

In the second scenario, the gloves are manufactured from a knit to shape component, a glove insert and hook and loop' fastener, all of U.S. origin. In Mexico, the glove insert, hood of the glove and hook and loop' fastener are assembled. Since the glove is knit to shape in the U.S. and then assembled in Mexico, paragraph (c)(2) does not apply. The knit to shape component starts and remains within heading 6101, HTSUS through 6117, HTSUS after assembly and, therefore, does not undergo the required change in tariff classification.

The next step in the hierarchy is paragraph (c)(3)(i), which states that "If the good is knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit". In this case that is the U.S.

However, there is an exception to products from the United States that are sent abroad for processing. Pursuant to T.D. 90-17, published in the Federal Register on March 1, 1990 (55 FR 7303), Customs extended the principles of country of origin for textiles and textile products contained in 19 C.F.R. ?12.130 to such merchandise for all Customs purposes, including duty and marking. Section 12.130(c)(1) states the following:

Applicability to U.S. articles sent abroad. Chapter 98, Subchapter II, Note 2, Harmonized Tariff Schedule of the United States, 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. In order to have a single definition of the term "product of" and, therefore, a single country of origin for a textile or textile product, notwithstanding paragraph (b), merchandise which falls within the purview of Chapter 98, Subchapter II, Note 2, Harmonized Tariff
Schedule of the United States, may not, upon its return to the U.S., be considered a product of the U.S.

Since the assembly of the gloves in Mexico constitutes an advancement in value or improvement in condition, the country of origin of the subject gloves is Mexico, for quota, marking, and duty purposes pursuant to T.D. 90-17 and Section 12.130(c).

HOLDING:

The country of origin of the gloves in scenario one is the country of assembly. The gloves in scenario one may use the country of origin marking "U.S. components assembled in _____" where the blank is the single country of origin. In scenario two, the country of origin is Mexico.

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
Tariff Classification Appeals
Division

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