CLA-2 CO:R:C:T 089068 CC
Ms. Gail T. Cumins
Sharretts, Paley, Carter & Blauvelt, P.C.
Sixty-seven Broad Street
New York, NY 10004
RE: Country of origin of sweaters
Dear Ms. Cumins:
This letter is in response to your inquiry of March 5, 1991,
on behalf of Polo/Ralph Lauren Corporation, requesting a country
of origin determination for sweaters. A sample was submitted for
examination.
FACTS:
The submitted sample, style "Polar Bear," is a men's long
sleeved sweater, which is constructed from 100 percent wool, knit
fabric and contains four stitches per two centimeters measured in
the horizontal direction. The sample has a rib knit, crew
neckline, rib knit cuffs, a rib knit waistband, and a hand
embroidered polar bear design covering the major portion of the
front of the sweater.
According to your submissions, the following operations will
be performed to create the sweater: wool yarn will be produced in
Taiwan; the yarn will be shipped to Hong Kong where the front
and back panels and the sleeves will be machine knit to shape;
the front panel will be sent to China where the polar bear design
will be hand embroidered and the crew neckband will be hand knit;
and the embroidered front panel and the neckband will be shipped
back to Hong Kong where the panels, the sleeves, and the
neckband will be linked and looped to form the finished sweater.
You state that the costs related to the manufacture of the
sweater are as follows: Taiwanese yarn-$9.80; Chinese embroidery-
$6.00; Chinese neck rib-$1.50; and Hong Kong, knitting, linking
and finishing-$12.30.
ISSUE:
What is the country of origin of the merchandise at issue?
LAW AND ANALYSIS:
Section 12.130 of the Customs Regulations (19 CFR 12.130) is
applicable to the merchandise at issue. 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) of the Customs Regulations sets forth
criteria in determining whether a substantial transformation of a
textile product has taken place. This regulation states that
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) of the Customs Regulations states that
in determining whether merchandise has been subjected to
substantial manufacturing or processing operations, the
following will be considered:
(i) The physical change in the material or article as a
result of the manufacturing or processing operations in each
foreign territory or country, or insular possession of the
U.S.
(ii) The time involved in the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iii) The complexity of the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iv) The level or degree of skill and/or technology required
in the manufacturing or processing operations in each
foreign territory or country, or insular possession of the
U.S.
(v) The value added to the article or material in each
foreign territory or country, or insular possession of the
U.S., compared to its value when imported into the U.S.
Section 12.130(e)(1) provides that an article or material
usually will be a product of a particular foreign territory or
country, or insular possession of the U.S., when it has undergone
prior to importation into the U.S. in that foreign territory or
country, or insular possession any of the following:
(iii) weaving, knitting or otherwise forming fabric
Knitting to shape yarn in Hong Kong to form the front and
back panels and the sleeves would create a new and different
article of commerce, as these pieces would be identifiable as
dedicated for sweaters and would give this merchandise its
identity. In addition, these operations would constitute
substantial manufacturing or processing operations in application
of 12.130(e)(1). Embroidering the polar bear design and knitting
the crew neckband in China would not change the identity or
fundamental character of this merchandise. In addition, although
linking and looping the pieces together in Hong Kong would not of
itself be considered substantial manufacturing or processing
operations, the last substantial transformation takes place when
the panels and sleeves are knit in Hong Kong; the country of
origin is Hong Kong.
HOLDING:
The country of origin for the merchandise at issue is Hong
Kong.
The sample is being returned under separate cover.
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
177.9(b)(1), Customs Regulations (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 connection with the
ruling request and incorporated in the ruling letter, either
directly, by reference, or by implication, is accurate and
complete in every material respect. Should it subsequently be
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, 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 Rulings Division