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HQ 967825





September 15, 2005

CLA-2 RR:TCM:CTF 967825 TMF

CATEGORY: CLASSIFICATION

TARIFF NO.: 6105.10.0010

Victor Chung
Pacic Apparel Resources Inc.
2530 Corporate Place, A112
Monterey Park, California 91754

RE: Classification and country of origin determination of men’s and boy’s non-lined, woven, long and short sleeve “working” shirts; United States – Israel Free Trade Agreement; 19 CFR Section 12.130; 19 C.F.R. Section 102.21; General Note 8, HTS

Dear Mr. Chung:

In your letter dated July 22, 2005, you requested a tariff classification ruling and a country of origin determination of certain men’s and boy’s non-lined, woven, long and short sleeve “working” shirts that will be imported into the United States. A schematic was submitted with your request.

FACTS:

The subject garment is described by you as men’s and boy’s woven, non-lined, simple, woven, long and short sleeve shirt that is labeled as a “working” shirt. You indicate that the garment will be “marketed to mostly blue-collar working community as their working garment.” You state that they are not “dress shirts” that are worn with suits.

The merchandise is designated as style GS0007/GS0019 in your submitted schematic.

You indicated that the woven fabric will be either predominately of cotton or of man-made fiber and the fabric will be obtained from either one or more of the following countries: Hong Kong, China, Taiwan, Indonesia and South Korea.

The fabric is shipped to Israel where it is cut into garment components. The components are shipped to China, Egypt, Sri Lanka or Turkey, where they will be assembled into the subject shirts along with the attachment of trims, labels, and non-Israeli origin findings. The finished garments will be exported directly from these countries, not Israel, to the United States.

ISSUE:

What are the classification and country of origin of the subject garment?

LAW AND ANALYSIS:

Classification:

We are unable to provide you with the classification at the statistical ten-digit level without information related to whether the subject merchandise contains two or more colors in the warp and/or the filling. Therefore, we have determined the classification based on the information you have submitted to us at this time.

If the subject garments’ fiber content in chief weight of cotton, they are classifiable in subheading 6205.20.20, HTSUSA, which provides for “Men’s or boys’ shirts: Of cotton: Other.” If the subject garments’ fiber content is in chief weight of man-made fibers, they are classifiable in subheading 6205.30.20, HTSUSA, which provides for “Men’s or boys’ shirts: Of man-made fibers: Other: Other.”

Country of Origin

Section 334 of the Uruguay Round Agreements Act (codified at 19 U.S.C. 3592), enacted on December 8, 1994, provided rules of origin for textiles and apparel entered, or withdrawn from warehouse for consumption, on and after July 1, 1996. Section 102.21, Customs Regulations (19 C.F.R. 102.21), published September 5, 1995, in the Federal Register, implements Section 334 (60 FR 46188). Section 334 of the URAA was amended by section 405 of the Trade and Development Act of 2000, enacted on May 18, 2000, and accordingly, section 102.21 was amended (68 Fed. Reg. 8711). Thus, the country of origin of a textile or apparel product shall be determined by the sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21.

However, we note that you indicated that the fabric used in the subject shirts is cut in Israel. Section 334(b)(5) of the Uruguay Round Agreements Act provides that:

This section shall not affect, for the purposes of the customs laws and administration of quantitative restrictions, the status of goods that, under rulings and administrative practices in effect immediately before the enactment of this Act, would have originated in, or been the growth, product, or manufacture of, a country that is party to an agreement with the United States establishing a free trade area, which entered into force before January 1, 1987. For such purposes, such rulings and administrative practices that were applied, immediately before the enactment of this Act, to determine the origin of textile and apparel products covered by such agreement shall continue to apply after the enactment of this Act, and on and after the effective date described in subsection (c), unless such rulings and practices are modified by the mutual consent of the parties to the agreement.

Israel is the only country that qualifies under the terms of Section 334(b)(5). As the Section 334 rules of origin for textiles and apparel products do not apply to Israel, we refer to the 19 C.F.R. §12.130 rules of origin, the rules of origin applicable to textiles and textile products before the enactment of Section 334. Section 334(b)(5) makes clear that if origin was conferred in Israel under Section 12.130, Israel will now be accorded the same treatment. This interpretation of Section 334(b)(5) was confirmed in a Notice of a general statement of policy, Treasury Decision 96-58, appearing in the Federal Register, Vol. 61, No. 148, dated July 31, 1996.

Accordingly, pursuant to Section 12.130(b), the standard of substantial transformation governs the country of origin determination where textile and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory or country where the article last underwent a substantial transformation. Substantial transformation occurs when an article is transformed into a new and different article of commerce by means of substantial manufacturing or processing.

Section 12.130(d) sets forth criteria for determining whether a substantial transformation of a textile product has taken place. 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) 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) states that for determining whether the 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 operations; (iii) The complexity of the manufacturing or processing operations; (iv) The level or degree of skill and/or technology required in the manufacturing or processing operations; (v) The value added to the article or material.

Section 12.130(e)(1) states, in pertinent part, that an article will usually be a product of a particular country when it has undergone in that country:

(iv) Cutting of the fabric into parts and the assembly of these parts into the completed article; or (v) Substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which were cut from the fabric in another country into a component garment. (e.g., the complete assembly and tailoring of all cut pieces of a suit-type jacket, suit or a shirt).

Under § 12.130, CBP has held that the cutting of fabric into garment parts is a substantial transformation of the fabric and those garment parts become the product of the country in which they are cut. CBP has also held that when garment parts are cut in one country but the garment is assembled in another country, unless the assembly operation is a substantial assembly such as that referred to in Section 12.130(e)(1)(v), the country or origin remains the country in which the garment parts are cut. See, for example, HRL 088235 dated March 15, 1991, and the rulings that are cited in that ruling.

In this case, when the fabric used in the subject shirts is imported into Israel where it is cut into components, the fabric is substantially transformed into cut components that are products of Israel. However, when the cut components are assembled together in a second country, we find the sewing of the cut pieces involves a simple assembly of garment pieces to make the subject shirts. CBP has previously determined that the sewing of the components does not amount to the complex sewing operation required in section 12.130(e)(1)(v) because a limited number of parts are sewn together and there is no individual tailoring of the garments. See Headquarters Ruling Letter (HQ) 562864, dated December 3, 2003. CBP has also determined that finishing, inspection and packaging are not considered sufficient operations to "substantially transform" an article and thus change the country of origin. See HQ 088235, dated March 15, 1991, which determined that production in Israel, which includes knitting, dyeing and cutting fabric in Israel with assembly and finishing in Turkey resulted in a country of origin in Israel. Rather, unless the assembly operations are substantial, the country of origin remains where the components are cut. See HQ 088022, dated February 7, 1991 and HQ 084427, dated August 30, 1989.

Therefore, in this instance, although there is assembly in a second country (either China, Egypt, Sri Lanka or Turkey) where attachment of trimming and findings occurs, these operations are not substantial. Thus, the subject shirts would remain products of Israel. See HQ 953241, dated April 9, 1993, which held that men’s woven cotton shirts that are made from hand-loomed fabric from India which is cut in India and assembled in Singapore have a country of origin of India pursuant to 19 C.F.R. § 12.130; see also HQ 956495, dated September 7, 1994, which held that men’s shirts that are cut in Hong Kong and shipped to China for assembly have a country of origin of Hong Kong.

“Imported Directly” From Israel:

General Note 8, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), provides that products of Israel are eligible, when imported into the United States, for the "special" duty rate set forth in the tariff schedule only if each article is imported directly from Israel into the customs territory of the United States (General Note 8(b)(ii)). However, the assembled garments are exported to the United States from China, Egypt Sri Lanka or Turkey. Therefore, these garments do not qualify for the "special" duty rate.

HOLDING:

If the subject garments’ fiber content is in chief weight of cotton, they are classifiable in subheading 6205.20.20, HTSUSA, which provides for “Men’s or boys’ shirts: Of cotton: Other.” The general column one duty rate is 19.7% ad valorem. The textile category number is 340. If the subject garments’ fiber content is in chief weight of man-made fibers, they are classifiable in subheading 6205.30.20, HTSUSA, which provides for “Men’s or boys’ shirts: Of man-made fibers: Other: Other.” The general column one duty rate is 29.1¢/kg + 25.9% ad valorem. The textile category number is 640.

The country of origin of the shirts is Israel. Based upon international textile trade agreements, products of Israel are not subject to quota or the requirement of a visa. However, as the subject shirts are not directly imported from Israel, they are not entitled to preferential duty treatment under the United States-Israel Free Trade Agreement.

Quota/visa requirements are no longer applicable for merchandise, which is the product of World Trade Organization (WTO) member countries. The textile category numbers above apply to merchandise produced in non-WTO member-countries. Quota and visa requirements are the result of international agreements that are subject to frequent negotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the "Textile Status Report for Absolute Quotas," which is available on our web cite at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer you to the web cite of the Office of Textiles and Apparel of the Department of Commerce at http://otexta.ita.doc.gov.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Should it be subsequently determined that the information furnished is not complete and does not comply with 19 C.F.R. 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 CBP, it is recommended that a new ruling request be submitted in accordance with 19 C.F.R. 177.2.

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is entered

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division

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