HQ 959772 - Country of origin of a sweater knit to shape in two countries; Section 102.21(c)(4) - 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 > 1997 HQ Rulings > HQ 959705 - HQ 959800 > HQ 959772

Previous Ruling Next Ruling
HQ 959772

January 29, 1997

CLA-2 RR:TC:TE 959772 CAB

CATEGORY: CLASSIFICATION

Harold I. Loring, Esq.
Grunfeld, Desiderio, Lebowitz & Silvermann LLP 245 Park Avenue
33rd Floor
New York, NY 10167-0002

RE: Country of origin of a sweater knit to shape in two countries; Section 102.21(c)(4)

Dear Mr. Loring:

This is in response to your inquiry of September 19, 1996, requesting a country of origin determination for a sweater pursuant to Section 102.21, Customs Regulations, on behalf of Crystal Sweater Limited. A sample was submitted for examination. After a request for a conference, on December 19, 1996, you met with Customs attorneys regarding the pending country of origin determination.

FACTS:

The article at issue is a child's long-sleeved acrylic knit sweater. The front panel will be knit to shape in China. The back panel, sleeves, and neck trim will be knit to shape in Hong Kong. The knit to shape back panel, sleeves, and neck trim will then be shipped to China for linking with the front panel.

ISSUE:

What is the country of origin of the subject sweater?

LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act (codified at 19 USC Section 3592), new rules of origin were effective for textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product when the good is wholly obtained or produced in a single country, territory, or insular possession. The subject sweater is not wholly obtained or produced in a single country, territory, or insular possession, thus, Section 102.21(c)(1) is inapplicable.

Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section. Section 102.21(c)(2) states:

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.

Section 102.21(e) states "The following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:"

6101-6117 (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.

The subject sweaters are classifiable under Heading 6110, which provides for, knitted sweaters and similar articles. The applicable tariff shift rule requires a tariff shift to heading 6101 through 6117 from any heading outside that group. In this case, the goods are knit to shape however, they fail to meet the applicable tariff shift requirement as they are classifiable under Heading 6110, HTSUSA, and the sweater components are classifiable under Heading 6117, HTSUSA, which is not outside the specified group (heading 6101-6117). Therefore, the tariff shift rule is not met and Section 102.21(c)(2) is inapplicable.

Section 102.21(c)(3) applies where the country of origin of a textile or apparel product cannot be determined pursuant to paragraph (c)(1) or (c)(2) and where the merchandise consists of either a good that was knit to shape in a single country, or (with an exception for goods of certain specifically enumerated headings), was wholly assembled in a single country, territory, or insular possession.

Section 102.21(b) states the following:

(3) Knit to shape. The term knit to shape applies to any good of which 50 percent or more of the exterior surface area is formed by major parts that have been knitted or crocheted directly to the shape used in the good, with no consideration being given to patch pockets, appliques, or the like. Minor cutting, trimming, or sewing of those major parts will not affect the determination of whether a good is "knit to shape."

(4) Major parts. The term major parts means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar parts.

In this instance, the subject sweater is comprised of components that have not been knit to shape in a single country, territory, or insular possession. Therefore, Section 102.21(c)(3) is inapplicable.

Section 102.21(c)(4) provides the first multi-country rule. Section 102.21(c)(4), states the following:

Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred.

You cite several prior rulings where Customs determined that the country of origin of sweaters was where at least two of the three major components were knit. See, Headquarters Ruling Letters (HQ) 734242, dated March 2, 1992; HQ 950287, dated October 30, 1991; HQ 734456, dated March 12, 1992; HQ 734791, dated February 16, 1993; and HQ 952503, dated January 15, 1993. You also cite HQ 956625, dated July 27, 1994, for the proposition that assembly plus the knitting of only one component in the assembling country would not confer origin. It is important to note that the referenced rulings were decided pursuant to Section 12.130, Customs Regulations, and though in some instances they might be helpful in the determination of current country of origin issues, Section 102.21 is the provision that is applicable and supersedes any rationale used in Section 12.130 contrary to the intent of Section 102.21.

In this case, the front panel will be knit to shape in China, while the back panel, sleeves, and neck trim will be knit to shape in Hong Kong. All of the component pieces will be linked in China. Customs is of the opinion that the knitting to shape of the back panel, sleeves, and neck trim constitutes the most important manufacturing process. Therefore, pursuant to Section 102.21(c)(4), the country of origin of the subject sweater is Hong Kong. Thus, while this determination of origin is consistent with the "two out of three" analysis previously used in the country of origin determinations of knit sweaters pursuant to Section 12.130, it is important to note, however, that each determination of origin will be based on the specific facts presented.

HOLDING:

The country of origin of the subject sweater is the country where the back panel, sleeves, and neck trim are knit to shape, Hong Kong.

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 19 CFR 177.9(b)(1). This section states that 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, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

Sincerely,

John Durant, Director
Tariff Classification Appeals

Previous Ruling Next Ruling