HQ 960871 - Country of origin determination for woman's knitwear; 19 CFR - United States International Trade Commision Rulings

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HQ 960871

November 24, 1997
CLA-2 RR:TC:TE 960871 jb

CATEGORY: CLASSIFICATION

Harold I. Loring, Esq.
Grunfeld, Desiderio, Lebowitz & Silverman LLP 245 Park Avenue, 33rd Floor
New York, NY 10167-3397

RE: Country of origin determination for woman's knitwear; 19 CFR

Dear Mr. Loring:

This is in reply to your letter dated April 29, 1997, on behalf of your client, Rose Knitting (Asia) Ltd., requesting a country of origin determination for certain women's knitwear which will be imported into the United States. Samples of the garment's component pieces, before assembly, and the completed garments, were submitted to this office for examination.

FACTS:

The subject merchandise, consists of two styles of women's knit pullovers, referenced styles 904606A and 904606B, made of 100 percent cotton fabric. The garments feature long sleeves and a crew neck. The fabric of the garments consist of a two by two rib knit construction which has more than nine stitches per two centimeters measured in the horizontal direction. The pullovers are intended for wear on the upper part of the torso.

As per your letter, the manufacturing operations for the subject garments are as follows:

STYLE NO. 904606A

Country A front panel is knit with lines of demarcation at the neck back panel is knit with lines of demarcation at the neck

You emphasize that the front and back panels as knitted are fully contoured at the armholes, side seams, shoulders and bottom; only the neck is in need of further cutting along the lines of demarcation.

Country B sleeve panels are knit to shape neck trim is knit front panel and back panel are cut along lines of demarcation at the neck all components are linked by looping finishing operations

STYLE NO. 904606B

Country A front panel is knit with lines of demarcation at the neck and armholes back panel is knit with lines of demarcation at the neck and armholes

Country B sleeve panels are knit with lines of demarcation at the armholes neck trim is knit front panel and back panel are cut along lines of demarcation at the neck and armholes sleeve panels are cut at the armholes all components are linked by looping finishing operations

ISSUE:

What is the country of origin of the subject merchandise?

LAW AND ANALYSIS:

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) 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 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be 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".

Paragraph (e) states that "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 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.

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.

Section 102.21(c)(b) states:

(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.

The subject merchandise is classifiable as women's knit pullovers in heading 6110, HTSUS. You state that in the case of Style No. 904606A the front and back panels are knit to shape, and in the case of Style No. 904606B that the front, back and sleeve panels are knit to shape. You conclude that as two of the three major components (front, back or sleeve panels) in each of the subject scenarios are knit to shape in a single country, that country is where the most important assembly or manufacturing process occurs. You add that although this office has in the past issued rulings addressing what constitutes "knit to shape" garments, those rulings never spoke to "lines of demarcation" such as those present in the subject component pieces, and thus should be disregarded. Specifically, you make reference to HQ 959582, dated September 9, 1996, and HQ 959484, dated October 3, 1994.

This office strongly disagrees with your claims. First, we bring to your attention that HQ 959484 made explicit reference to the lines of demarcation present on the front panel in both scenarios which were addressed. Secondly, although lines of demarcation at crucial points such as the neck and armholes have never been discussed at length in prior country of origin rulings since the section 102.21 rules went into effect, this does not in any way indicate that the cutting of lines of demarcation is to be treated any differently from the cutting of major panels without established lines of demarcation.

You make reference to several prior Headquarter Rulings (HQ 088069, dated January 25, 1990 and HQ 089155, dated May 20, 1991) wherein Customs determined that the lines of demarcation created during the knitting process predetermines garment "shape" and results in knit to shape parts. 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.

An examination of the subject component parts reveals that for style no. 904606A, in the case of the front panel, at the top, in a semi-circular formation, the knit fabric changes from a two by two rib which comprises the rest of the panel, to a two by one rib. This changed pattern serves as a line of demarcation; that is, where the semi-circular shape is to be cut out, resulting in a round neckline. The back panel for this style has two very small holes at each side which seem to simulate lines of demarcation. For style no. 904606B the lines of demarcation also vary. The front panel features a series of small holes in a semi-circular fashion from the top; the back panel features four small holes (two at each side from the top), and the sleeve panels feature the series of holes similar to the front panel. To say that the component pieces are "contoured enough" even prior to the cutting, evades the entire "knit to shape" and "major parts" definitions explicitly set forth in section 102.21(c)(b) (3)(4). However, regardless of how the lines of demarcation are fashioned, the fact remains that without subsequent cutting operations, the garments would either lack a neck opening or arm openings. As such, the cutting to shape of the panel to form the neck contour or the cutting to shape at the sleeves to form the armholes goes beyond the "minor cutting" envisioned by section 102.21(c)(b).

Accordingly, as the subject garments are not knit to shape, and are comprised of multiple components assembled in a single country, the country of origin is the country where the assembly process occurs, that is, Country B.

HOLDING:

The country of origin of the subject women's knit garments, referenced styles 904606A and 904606B, is Country B.

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 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, 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
Commercial Rulings Division

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