CLA-2 CO:R:C:G 085611 CC
RE: Country of origin for pants and a shirt
Mr. Harold I. Loring
Grunfeld, Desiderio, Lebowitz & Silverman
12 East 49th Street
New York, N.Y. 10017
Dear Mr. Loring:
This letter is in response to your inquiry of September 20,
1989, on behalf of Mamiye Brothers, Inc., requesting country of
origin determinations for pants and a shirt. Samples were
submitted for examination.
FACTS:
The shirt will be made from cotton woven poplin fabric made
in Country A. The fabric will be sent to Country B where it will
be marked with cutting lines and cut into components, which will
be ready for assembly by sewing. The following components will
be sent to Country C for a partial assembly: the pieces for the
beezum-style pocket (i.e. the pocket and pocket lining),
the pieces for the collar (i.e. top and under collar leaf, top
and under collar stand, and interlinings), and the left front
panel. The partial shirt assembly will be sent back to Country B
where, together with other components, it will be assembled by
sewing into a completed shirt.
For production of the shirt, you state that the cost of
processing operations performed in Country B will exceed the cost
of operations performed in Country C by a factor of approximately
11:1. The time spent on the operations in Country B will exceed
the time spent in Country C by a factor of approximately 2.7:1.
The capital investment in Country B will exceed that in Country C
by a factor of 10.1:1. The value added (labor plus overhead) to
the shirt in Country B will exceed the value added in Country C
by a factor of 7.37:1.
The pants will be made from a combination polyester and
cotton woven twill fabric made in Country A. The fabric will be
sent to Country B where it will be marked and cut into
components, which are ready for assembly by sewing. Cut
components for the pockets, pocket lining, and two back leg
panels will be sent to Country C for assembly. The partial pants
assembly will then be sent back to Country B for final assembly
with the other components into completed pants.
For production of the pants, you state that the cost of
processing in Country B will exceed that in Country C by a factor
of 7.2:1. The time spent on processing in Country B will exceed
that in Country C by a factor of 1.73:1. The capital investment
in County B will exceed that in Country C by a factor of 8.3:1.
The value added in Country B will exceed the value added in
Country C by a factor of 6.6:1.
ISSUE:
What is the country of origin of the pants and shirt at
issue?
LAW AND ANALYSIS:
Section 12.130(b) of the Customs Regulations provides that a
textile product that is processed in more than one country or
territory shall be a product of that country or territory where
it last underwent a substantial transformation. A textile
product will be considered to have undergone a substantial
transformation if it has been transformed by means of substantial
manufacturing or processing operations into a new and different
article of commerce. Section 12.130(d)(1) of the Customs
Regulations provides 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(e)(1) of the Customs Regulations describes
manufacturing or processing operations from which an article will
usually be considered a product of the country in which the
processes occurred. Section 12.130(e)(1)(v) provides the
following:
Substantial assembly by sewing and/or tailoring of all
cut pieces of apparel articles which have been cut from
fabric in another foreign territory or country, or insular
possession, into a completed garment (e.g. the complete
assembly and tailoring of all cut pieces of suit-type
jackets, suits, and shirts).
For both the pants and shirt, sewing of all cut pieces does
not take place in Country C; only partial assemblies are
performed there. The pieces sent to Country C have not been
substantially transformed into new and different articles of
commerce that are indicated by changes in name, character, or
use. Thus, Country C would not be considered the country of
origin for the shirt and pants.
The last substantial transformation occurs where the fabric
is cut into pieces, which is Country B. Cutting the fabric into
pieces makes them dedicated for particular commercial uses, which
are the pants and shirt in this case. In addition, according to
your submissions, the time involved in manufacturing and
processing operations and the value added to the shirt and pants
are much greater in Country B than to that in Country C. Thus,
for classification and quota purposes, the country of origin for
both the pants and shirt at issue is Country B.
HOLDING:
The country of origin for the pants and shirt at issue is
Country B.
Sincerely,
John Durant, Director
Commercial Rulings Division