CLA-2 CO:R:C:T 089539 CC
Andrew P. Vance
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016
RE: Country of origin of shirts: 19 CFR 12.130
Dear Mr. Vance:
This letter is in response to your inquiry, on behalf of
Luen Thai, for the country of origin of shirts. Samples were
submitted for examination.
FACTS:
The submitted merchandise, commonly designated as a flannel
shirt, is a men's woven cotton shirt with a full frontal opening
and button closure, a collar, a front pocket, and cuffs. You
have also submitted samples of the components used to make this
item.
You have described two scenarios for the manufacture of this
merchandise. In Scenario 1, the fabric is made in Country A. In
Country B (Hong Kong), the fabric is marked and cut into
components. In Country C (China), all of the components are sewn
and assembled, ironed, and packed. Scenario 2 is the same as
Scenario 1, except that the collars and cuffs are sewn in Hong
Kong.
You have also provided the following information concerning
the production of the shirts:
Scenario 1
Operation Min/doz Cost/doz($) Country
Fabric 60.00 A
Marking and Cutting 41.82 4.95 B
Accessories 8.88 B
Assembling and Sewing 207.37 2.79 C
Finishing 65.78 .89 C
Scenario 2
Operation Min/doz Cost/doz($) Country
Fabric 60.00 A
Marking and Cutting 41.82 4.95 B
Cutting and Sewing
(collars and cuffs) 77.48 10.43 B
Accessories 8.88 B
Assembling and Sewing 129.89 1.75 C
Finishing 65.78 .89 C
ISSUE:
What is the country of origin of the merchandise at issue?
LAW AND ANALYSIS:
Country of origin determinations for textile products are
subject to Section 12.130 of the Customs Regulations (19 CFR
12.130). Section 12.130 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) 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).
According to T.D. 85-38 (19 Cust. Bull. 58, 70; 50 FR 8714),
the final document rule establishing 19 CFR 12.130:
[T]he assembly of all the cut pieces of a garment usually is
a substantial manufacturing process that results in an
article with a different name, character, or use than the
cut pieces. It should be noted that not all assembly
operations of cut garment pieces will amount to a
substantial transformation of those pieces. Where either
less than a complete assembly of all the cut pieces of a
garment is performed in one country, or the assembly is a
relatively simple one, then Customs will rule on the
particular factual situations as they arise, utilizing the
criteria in section 12.130(d).
Customs has consistently ruled for similar garments that the
cutting of fabric into parts to make garments constitutes a
substantial transformation. (See, e.g., Headquarters Ruling
Letter (HRL) 088235 of March 15, 1991.) Therefore in both
scenarios the merchandise is substantially transformed in Hong
Kong, where the fabric is cut. The question that remains is
whether the assembly operations performed in China constitute a
substantial transformation.
In Scenario 1 all of the pieces are assembled in China.
Based on the information provided, we do not believe that these
operations performed in China require a high degree of skill. In
addition the value added in Hong Kong is much greater than the
value added in China. The operations performed in China would be
considered a simple assembly as opposed to a tailoring operation.
Consequently no substantial transformation takes place in China,
and the country of origin for Scenario 1 would be Hong Kong. In
Scenario 2 less processing is performed in China than is
performed in China in Scenario 1. Thus no substantial
transformation takes place in China in Scenario 2, and the
country of origin in this scenario is also Hong Kong.
HOLDING:
The country of origin of the merchandise at issue in both
scenarios 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