CLA-2 CO:R:C:G 088069 JS
Lee Seah Weng
Lee Yin Knitting Factory
10603 Muirfield Drive
Suite 600
Potomac, MD 20854
RE: Country of origin of knit sweaters
Dear Mr. Weng:
This is in response to the letter of August 28, 1990,
submitting additional information pursuant to the country of
origin request dated May 11, 1990, made by the Singapore Embassy
on your behalf.
FACTS:
At issue are two knit sweaters partially constructed in
Singapore and completed in Malaysia. For ease of reference, the
100 percent cotton sweater will be designated "sweater A," and
the 100 percent acrylic sweater will be designated sweater "B."
Sweater A is a long sleeve crew neck or cardigan style
sweater. The 100 percent acrylic yarn originates in Singapore or
Malaysia, and is knitted into fabric in Singapore in what is
described as a highly complex, two hour, computer manufacturing
process. The knit fabric produced in Singapore has been pre-
marked into sweater shapes by the computerized knitting machine,
as indicated in a December 11, 1990 fax (copy enclosed).
According to the information provided in the August 28 letter and
a telephone conversation with Catherine Kurz on October 29, 1990,
the knit fabric is then manually cut along the pre-marked lines
into various sweater parts in Malaysia; these parts are then
sewn, linked, and ironed in Malaysia. The completed sweater is
sent to Singapore where it is inspected, reworked (if necessary),
labeled, handtagged and packaged for shipment. Of the Malaysian
manufacturing procedures, it is contended that only the sewing
and linking processes constitute complex procedures which require
skill. Of the Singapore processes (aside from the knitting) only
the repair of rejected garments requires skill and training.
The total value added per dozen garments is $28.00 (or 39.3
percent of total cost) in Singapore and $15.00 (or 21.1 percent
of total cost) in Malaysia. Seventy-five percent of the total
production time is expended in Singapore and the remaining 25
percent is expended in Malaysia.
Sweater B is also a long sleeve crew neck or cardigan
sweater, made of 100 percent cotton. The yarn is sourced in
either Malaysia or Hong Kong. The manufacturing processes
described above are applicable to the manufacture of this
sweater, except for the addition of a simple washing process that
takes place in Malaysia after the part fabrics are sewn and
linked together.
The total value added per dozen garments of sweater B is
$38.00 (or 31.6 percent of total cost) in Singapore and $20.00
(or 16.6 percent of total cost) in Malaysia. Seventy-six point
eight percent of the total production time is expended in
Singapore and the remaining 23.2 percent is expended in Malaysia.
ISSUE:
What is the country of origin for sweaters assembled in
Malaysia of fabric knit in Singapore?
LAW AND ANALYSIS:
The country of origin of textiles and textile products is
determined by the application of Section 12.130 of the Customs
Regulations (19 CFR 12.130). In determining the country of
origin of textile and textile products which consist of materials
produced or derived from, or processed in, more than one country,
the imported article is considered to be a product of the country
in which the last substantial transformation took place. A
substantial transformation of a textile or textile product is
said to occur if a commodity undergoes a transformation by means
of substantial manufacturing or processing into a new and
different article of commerce.
Section 12.130 (d) establishes criteria for determining
whether an article has been substantially transformed. However,
the criteria set forth in 19 CFR 12.130(d) are not exhaustive;
one or any combination of these criteria may be determinative,
and additional factors may be considered.
In accordance with 19 CFR 12.130 (d)(2), the following
factors are to be considered in determining whether merchandise
has been subjected to substantial manufacturing or processing
operations: the physical change in the material or article, the
time involved in the manufacturing or processing operations, the
complexity of the operations, the level or degree of skill and/or
technology required, as well as the value added to the article.
Under 19 CFR 12.130(e)(1), a material will usually be
considered a product of a particular country if it has undergone
such changes as are listed, in part, below:
(iii) weaving, knitting or otherwise forming fabric;
Under 19 CFR 12.130(e)(2), a material will usually not be
considered a product of a particular country if it has merely
undergone the following changes:
(ii) cutting to length or width and hemming or overlocking
fabrics which are readily identifiable as being
intended for a particular commercial purpose;
(iii) trimming and/or joining together by sewing, looping,
linking or other means of attaching otherwise
completed knit-to-shape component parts produced in a
single country, even when accompanied by other
processes (e.g. washing, drying, mending, etc.)
normally incident to the assembly process;
Since the sweater fabric is formed by knitting in Singapore,
and the material is demarcated with readily identifiable sweater
shapes, Singapore is established as the country of origin in
conformity with part 12.130(e)(1)(iii) above. The cutting and
linking in Malaysia of the pre-marked fabric constitutes a simple
manufacturing process that does not result in the required
substantial transformation. The computerized knitting process,
as indicated in the December 11 fax, has predetermined the
component sweater shapes which we consider to be completed knit-
to-shape parts.
Therefore, the country of origin of the sweaters at issue
is the country in which the panels are knit and marked, which in
both cases is Singapore.
HOLDING:
The manufacturing operations performed in Singapore
constitute a substantial transformation as required by 19 CFR
12.130. The country of origin for both sweaters A and B is
Singapore, and a Singapore visa must accompany the goods.
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 Customs
Regulations 19 CFR 177.9 (b)(1), which states that a ruling
letter is issued on the assumption that all information
furnished in connection with the ruling request and incorporated
therein, 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 that
there is a change in the facts previously furnished, the country
of origin determination may be affected. In such case, it is
recommended that a new ruling request be submitted in accordance
with section 177.2, Customs Regulations (19 CFR 177.2).
Sincerely,
John Durant, Director
Commercial Operations Division
Enclosure