CLA-2 CO:R:C:T 953489 SK
Stanley Yeung
Value Garment Manufacturing Co. Pte. Ltd.
16 New Industrial Road
Singapore 1953
RE: Country of origin determination; 19 CFR 12.130; simple
assembly is not a substantial manufacturing operation and does
not constitute substantial transformation; country of origin is
where fabric is cut.
Dear Mr. Yeung:
This is in reply to your letter of February 24, 1993, in
which you requested that this office make a country of origin
determination for two styles of skirts which undergo processing
in Hong Kong, Singapore and Indonesia. Our analysis follows.
FACTS:
Two styles of denim skirts are at issue; they are referenced
Style 4710007 and Style 6918. The denim fabric for both styles
of skirt is woven in Hong Kong. The fabric is sent to Singapore
where it is marked and cut. The piece goods are then sent to
Indonesia where various manufacturing operations take place
which, according to your submission, range in complexity from
"simple" to "fair", with only one operation designated as
"complex." The "simple" operations consist of fusing, joining
and pressing waistbands, making darts, attaching labels,
overlocking zipper facings and bartacking front pocket ends. The
operations designated as fairly complex include overlocking,
joining and sewing the two front and two back panels, sewing and
attaching belt loops onto cut panels, attaching and sewing
zippers onto left front panels and making pleats at the two front
panels. The one operation listed as "complex" consists of
attaching and sewing two front pockets. These component pieces
are then sent back to Singapore where the rest of the assembly
takes place. In your submission, you have designated half of the
total number of operations performed in Singapore as either
"complex" or "highly complex." These operations include joining
panels together, attaching zippers to the right front panels,
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inserting elastic in waistbands, making button holes, processing
the garments with chemical sand wash, and pressing, inspecting
and packing the garments.
You have provided this office with a labor/cost breakdown
for the operations that take place in Singapore and Indonesia.
This breakdown rates the complexity of the operations, the level
of technical skill required and the percentage of the total
manufacturing costs that are incurred in each country.
Both styles of skirt undergo very similar manufacturing
operations in Singapore and Indonesia and any differences do not
affect the country of origin determination.
ISSUE:
What is the country of origin for the garments at issue?
LAW AND ANALYSIS:
Country of origin determinations are made pursuant to
Section 12.130 of the Customs Regulations (19 CFR 12.130).
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;
(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:
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(i) The physical change in the material or article;
(ii) The time involved in the manufacturing or processing;
(iii) The complexity of the manufacturing or processing;
(iv) The level or degree of skill and/or technology
required in the manufacturing or processing
operations;
(v) The value added to the article or material;
[emphasis added]
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 United States when, prior
to importation into the United State, it has undergone in that
foreign territory or country or insular possession, any of the
following:
(i) Dyeing of fabric and printing when accompanied by two
or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating,
permanent stiffening, weighting, permanent embossing,
or moireing;
(ii) Spinning fibers into yarn;
(iii) Weaving, knitting or otherwise forming fabric;
(iv) Cutting of fabric into parts and the assembly of those
parts into the completed article; or
(v) substantial assembly by sewing and/or tailoring of
all cut pieces ...
[emphasis added]
Section 12.130(e)(1)(iv) states that a textile article will
usually be a product of a particular country if the cutting of
the fabric into parts and the assembly of those parts into the
completed article has occured in that country. In the instant
case, the fabric is cut in Singapore and, after some assembly
work in Indonesia which you describe as simple or only fairly
complex, the pieces are returned to Singapore where they undergo
more complicated operations which complete the garments.
Accordingly, as per Section 12.130(e)(1)(iv) of the Customs
Regulations, the skirts at issue are a product of Singapore as
this is where the fabric is cut and where the fabric parts are
assembled into completed skirts.
We further note that an analysis of the cost/labor breakdown
statistics you submitted supports this holding and indicates that
the preponderance of the total cost involved in the manufacture
of these skirts is incurred in Singapore; it is in Singapore that
the majority of the complex assembly operations take place and it
is here that over 70 percent of the total cost of manufacturing
these garments is incurred.
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HOLDING:
The counntry of origin of Style 4710007 and Style 69918 is
Singapore.
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 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