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HQ 962214





December 17, 1998
CLA-2 RR:CR:TE 962214 jb

CATEGORY: CLASSIFICATION

Allan H. Kamnitz, Esq.
Sharrets, Paley, Carter & Blauvelt, P.C.
Sixty Seven Broad Street
New York, NY 10004

RE: Country of origin determination for women's suit; 19 CFR Section 102.21(c)(4); most important manufacturing operation

Dear Mr. Kamnitz:

This is in reply to a letter from your firm dated August 10, 1998, and subsequent submission, dated September 3, 1998, on behalf of your client, Kasper A.S.L. Ltd, requesting a country of origin determination for a women's suit, referenced style 40397, made of 50 percent polyester and 50 percent acetate woven fabric. The importations of this suit will be made in equal quantities of jackets and skirts and will be offered and sold, at both the wholesale and retail levels, as a suit.

FACTS:

The subject merchandise, referred to as style 40397, consists of a suit-type jacket and skirt composed of identical woven fabric produced from 50 percent polyester and 50 percent acetate fibers. Both garments are tailored and fully lined with a 100 percent acetate woven fabric. The jacket is constructed from six panels sewn together lengthwise and features long sleeves, darts, a notched collar, a full front opening secured by a three button closure and besom pockets. The skirt features a waistband, a rear center vent, a rear zipper and one button closure and darts. This garment meets the requirements for a suit as set out in Note 3(a) to Chapter 62, HTSUS.

You indicate in your letter that either the jacket or matching skirt will be completely manufactured (as per the operations listed below) in either Hong Kong or China. Additionally, you state that in all instances the component produced in China will be made first (prior to the production of the second component in Hong Kong) and then sent to Hong Kong for final pressing, final inspection and packing before export.

SKIRT cut components merrow all skirt panels sew front and back darts finish the centre back seam press back vents press waistband join all lining seams sew hanging loops set zipper join front and back panels set lining to shell set waistband top stitch blind stitch bottom hem make buttonhole sew button

JACKET cut component pieces sew front seam and open seam sew tape onto front and back neck make pocket flaps make pocket and set flap onto pocket make collar sew main and size label onto neck facing sew cuff onto sleeve press sleeve hem sew center back seam and press open press bottom hem sew sleeve join side panels to front and back join shoulder seams join neck facing with front facings set collar set sleeves set sleeve heads sew shoulder heads sew shoulder pads join all lining seams and press set lining to shell turn jacket over and close sleeve lining seam
mark button hole position bar tack button hole mark button position sew buttons

ISSUE:

What is the country of origin of the submitted 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:"

6201-6208 (1) If the good consists of two or more component parts, a change to an assembled good of heading 6201 through
6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

The subject suit is classified in heading 6204, HTSUS. As the subject merchandise is not wholly assembled in a single country, the terms of the tariff shift are not met.

Paragraph (c)(3) states that, "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) or (2) of this section:"

(i) If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; or

(ii) Except for goods of heading 5609, 5807, 5811, 6213, 6214, 6301 through 6306, and 6308, and subheadings 6209.20.5040, 6307.10, 6307.90, and 9404.90, if the good was not knit to shape and the good was wholly assembled in a single country, territory, or insular possession, the country of origin of the good is the country, territory, or insular possession in which the good was wholly assembled.

As the subject merchandise is not knit to shape and assembly operations occur in more than one country, paragraph (c)(3) is inapplicable.

Paragraph (c)(4) states that, "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". In the case of the subject suit, the jacket and skirt are wholly assembled in different countries.

As was stated in Headquarters Ruling Letter (HQ) 960073, dated July 8, 1997, regarding the country of origin of suit components manufactured in different countries:

...Section 102.17, Customs Regulations (19 CFR ?102.17), which is incorporated by reference in section 102.21, and which specifically refers to section 102.21, provides, in pertinent part, as follows:

?102.17 Non-qualifying operations.

A foreign material shall not be considered to have undergone the applicable change in tariff classification set out in
?102.20 or ?102.21, or satisfy the other applicable requirements of that Section by reason of:

(c) Simple packing, repacking or retail packaging without more than minor processing;

In accordance with the clear wording of the above quoted Customs regulations, the components of the suits (i.e., the jackets and pants) returned to Country A after processing in Country B are subjected to "simple packing, repacking or retail packaging without more than minor processing." As a result, under section 102.21, the jackets and pants remain products of Countries A and B respectively.

The foregoing result is not a novel consequence of the circumstances of this case. It appears that Treasury Decision (TD) 91-7, which is an interpretive rule concerning, among other things, the applicability of special tariff treatment programs
(e.g. the General System of
Preferences (GSP) and the Caribbean
Basin Initiative (CBI)) to collections of articles classified under a single tariff provision such as sets, mixtures, and composite goods, would have dictated the same origin result for the imported suits. In addition to recognizing that there may be multiple countries of origin for those type articles, TD 91-7 specifically states that where an entire imported entity (set or composite good) is not the "product of" the beneficiary country, neither the entity nor any part thereof is entitled to preferential rates of duty.

Similarly, in the case of the subject merchandise, although the simple packing of the Chinese component in Hong Kong does result in the classification of both components as a "suit" for tariff purposes, it does not change the origin of that component. As such, the most important manufacturing process for the subject merchandise is the country in which each of the components for the suit was wholly assembled. This is consistent with the requirements set out in section 102.21(c)(2) which establishes that the origin of merchandise classified in heading 6204, HTSUS, is the single country in which the good is assembled. That is to say, if the jacket is wholly assembled in China, for marking purposes, the country of origin is China, and if the skirt is wholly assembled in Hong Kong, for marking purposes, the country of origin is Hong Kong. In the alternative, if the jacket is wholly assembled in Hong Kong, for marking purposes, the country of origin is Hong Kong, and if the skirt is wholly assembled in China, for marking purposes, the country of origin is China.

HOLDING:

The subject merchandise is classified in subheading 6204.19.2000, HTSUSA, which provides for, women's or girls' suits, ensembles, suit-type jackets, blazers, dresses, skirts, divided skirts, trousers, bib and brace overalls, breeches and shorts (other than swimwear): suits: of other textile materials: of artificial fibers: other. The applicable general column one rate of duty is 36.6›/kg + 26.9% ad valorem. The textile quota category is 644.

The subject merchandise will have two country of origins. For purposes of marking each component should be clearly marked with the appropriate country of origin.

For purposes of quota/visa, as the suit is classified in subheading 6204.19.2000, HTSUSA, it requires a textile visa for category 644. As the suit has two countries of origin (that is, China for one component and Hong Kong for the other), both a textile visa for category 644 from China and a textile visa in category 644 from Hong Kong will be required for each suit to enter the United States.

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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