CLA-2 CO:R:C:T 951424 jb
Judith Schechter, Esquire
Grunfeld, Desiderio, Lebowitz & Silverman
12 East 49th Street
New York, NY 10017
RE: Country of Origin determination for a knit, cotton jersey
men's brief
Dear Ms. Schechter:
This letter is in response to your inquiry of March 26,
1992, on behalf of your client, Orit Imports, Inc., requesting a
country of origin determination for a knit, cotton jersey men's
brief. A sample was submitted for examination.
FACTS:
The submitted sample, Style 336, consists of a knit, 100
percent cotton jersey men's brief.
According to your submissions, Orit Imports, Inc., is
contemplating a multi-country processing whereby fabric will be
knit and printed or dyed in Hong Kong or Pakistan. The fabric,
which will not have any lines of demarcation, will be sent to
Singapore where it will be cut into garment components. The cut
components and trim (i.e., elastics and labels) will then be sent
to Malaysia for assembly by sewing. The finished garments will
be returned to Singapore for packing and export to the United
States.
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),
sets forth the principles of country of origin for textile and
textile products subject to section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854). According to T.D. 85-38,
the final rule document which established 19 CFR 12.130, the
principles of country of origin for textiles and textile products
contained in 19 CFR 12.130 are applicable to such merchandise for
all purposes, including duty and marking (50 FR 8714 (1985)).
This regulation, which became effective in 1985, came about
as a result of Executive Order No. 12475 (49 FR 19955 (1984)),
which directed the Secretary of Treasury, in accordance with
policy guidance provided by the Committee for the Implementation
of Textile Agreements, to issue regulations governing the entry,
or withdrawal from warehouse for consumption, of textile and
textile products subject to section 204. The regulations were to
include clarifications in, or revisions to, the country of origin
rules for textiles and textile products subject to section 204 in
order to avoid circumvention of multilateral and bilateral
textile agreements.
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) of the Customs Regulations describes
manufacturing or processing operations from which an article will
usually be considered a product of the country in which those
operations 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, the final document rule
establishing 19 CFR 12.130:
The 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
situation as they arise, utilizing the criteria in section
12.130(d).
We have previously held that cutting of fabric into pattern
pieces constitutes a substantial transformation of the fabric,
resulting in the apparel pieces becoming a product of the country
where the fabric is cut (see: HQ 084979, dated October 23, 1989;
HQ 731036, dated July 17, 1989; HQ 555730, dated February 19,
1991; HQ 556030, dated August 29, 1991; and HQ 089834, dated
September 26, 1991).
Customs has long held that the mere assembly of goods,
entailing simple combining operations, trimming or joining
together by sewing is not enough to substantially transform the
components of an article into a new and different article of
commerce (see HQ 082787, dated March 9, 1989 and HQ 082747, dated
February 23, 1989).
Because the articles in question are textile products
subject to section 204 of the Agricultural Act of 1956, as
amended (7 U.S.C. 1854), 19 CFR 12.130 is applicable.
Style 336 is similar to Headquarters Ruling (HQ) 081642,
dated April 28, 1989, addressing the country of origin of certain
women's 100 percent cotton knit panties produced in multiple
countries. In that ruling it was held that despite the fact that
the underpants would be sewn and assembled in Thailand, Israel
was the designated country of origin for the panties because they
were cut and bleached there.
The sewing operation performed in Malaysia involves the
simple assembly of several cut pattern pieces: four panels in
the front and one panel each in the crotch and across the
buttocks. The sewing does not involve the complex sewing
operation required when manufacturing a suit, suit jacket, or
tailored shirt contemplated by section 12.130(e)(v).
The cutting in Singapore, materially changes the garment
into designated garment parts. Since assembly, per se, of the
garment does not result in a substantial transformation, the
cutting process in Singapore is considered the time at which the
last substantial transformation occurs.
HOLDING:
The country of origin of the submitted merchandise is
Singapore. It is at the cutting process, in Singapore, that the
textile product undergoes a substantial transformation and is
transformed into a new and different article of commerce.
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 the ruling letter,
either directly, by reference, or by implication, is accurate and
complete in every material respect.
Should it be 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