MAR-2-05 CO:R:C:V 733841 KG
Laura S. Plank, Esq.
Sears Roebuck and Co.
National Headquarters
Sears Tower
Department 766
Chicago, Illinois 60684
RE: Country of origin marking of imported men's polo style
shirts; 19 CFR 12.130
Dear Ms. Plank:
This is in response to your letter of October 5, 1990,
requesting a ruling on the country of origin of imported men's
polo style shirts. A sample was submitted for examination.
FACTS:
Sears plans to import men's 65/35 poly/cotton short sleeve
jersey knit polo style shirts. The shirts have a flat knit
collar and cuff, rib knit band bottom and 4-button half placket.
The production of the shirts will involve processing operations
in two countries. The fabric will be made and cut into 8 garment
components in Taiwan. The 8 garment components will then be sewn
together into a finished shirt and packaged in China. About 81%
of the processing cost of the garment will be attributable to the
processing done in Taiwan and about 19% of the cost will be
attributable to the processing in China. According to your
submission, the assembly by sewing in China does not require
tailoring or detail work, will require very little time and will
not require highly skilled workers.
ISSUE:
What is the country of origin of the imported men's polo
style shirt?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that, unless excepted, every article of foreign
origin imported into the U.S. shall be marked in a conspicuous
place as legibly, indelibly, and permanently as the nature of the
article (or container) will permit, in such a manner as to
indicate to the ultimate purchaser in the U.S. the English name
of the country of origin of the article.
Section 12.130, Customs Regulations (19 CFR 12.130), sets
forth the principles for making country of origin determinations
for textile and textile products subject to section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854)"("section
204").
Pursuant to 19 CFR 12.130, the standard of substantial
transformation governs the determination of the country of origin
where textiles and textile products are processed in more than
one country. The country of origin of textile products is deemed
to be that foreign territory, country, or insular possession
where the article last underwent a substantial transformation.
Substantial transformation is said to occur when the article has
been transformed into a new and different article of commerce by
means of substantial manufacturing or processing operations.
In T.D. 85-38, published in the Federal Register on March 5,
1985, (50 FR 8714), which is the final rule document which
established 19 CFR 12.130, there is a discussion of how the
examples and the factors enumerated in the regulation are
intended to operate. "Examples set forth in 19 CFR 12.130(e) are
intended to give guidance to Customs officers and other
interested parties. Obviously, the examples represent clear
factual situations where the country of origin of the imported
merchandise is easily ascertainable. The examples are
illustrative of how Customs, given factual situations which fall
within those examples, would rule after applying the criteria
listed in 19 CFR 12.130(d). Any factual situation not squarely
within those examples will be decided by Customs in accordance
with the provisions of 19 CFR 12.130(b) and (d)." The factors to
be applied in determining whether or not a manufacturing
operation is substantial are set forth in 19 CFR 12.130(d).
The fabric for these shirts is made and cut in Taiwan.
One of the examples enumerated is 19 CFR 12.130(e)(iii), which
states that weaving, knitting or otherwise forming fabric is an
example of a manufacturing or processing operation which would
qualify under 19 CFR 12.130 as a substantial transformation.
Further, Customs stated in T.D. 85-38 that "Cutting garment parts
from fabric will result in a substantial transformation of the
fabric. This is not to say, however, that the cut pieces will
not undergo a later substantial transformation." Clearly,
making poly/cotton fabric out of yarn or thread results in a new
and different article of commerce. Further, the forming of the
fabric and the cutting of the garment parts would qualify as a
substantial manufacturing operation under 19 CFR 12.130.
Therefore, the making of the fabric and cutting it into garment
parts in Taiwan constitutes a substantial transformation. The
second question presented is whether the garment parts undergo a
later substantial transformation in China, where the parts are
sewn together.
Assembly by sewing is considered in 19 CFR 12.130(e)(v) as
usually resulting in a article being deemed a product of the
country in which the sewing was done where the assembly is
substantial such as the complete assembly and tailoring of all
cut pieces of suit-type jackets, suits, and shirts. After
considering all the comments received on the interim regulation
regarding assembly by sewing, Customs concluded that "factors
such as time, nature of the sewing operation, and the skill
required to sew together a tailored garment should be considered
in determining whether the merchandise was substantially
transformed.... 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)." 50 Fed. Reg. 8,715 (March 5,
1985), T.D. 85-38.
As you are aware, Customs ruled in HQ 731036 (July 18,
1989), that the sewing together of 12 component parts into a
men's polo style shirt in a second foreign country was not a
substantial transformation under 19 CFR 12.130. The factors
considered were the simplicity of the operations performed in the
second country, and the lack of time and skill required to
perform the operations. This case presents similar processing
performed in the second foreign country. Further, in this case
there are only 8 components as compared to 12 components in HQ
731036 and 81% of the value of the finished shirt is attributable
to the processing performed in the second country. Based on
these considerations, we conclude that the component parts do not
undergo substantial manufacturing in China and therefore, are not
substantially transformed in China. The country of origin of the
shirts is Taiwan.
HOLDING:
Pursuant to 19 CFR 12.130, the country of origin of these
men's polo style shirt for country of origin marking, quota, and
duty purposes would be Taiwan.
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