CLA-2 CO:R:C:T 954448 jb
Mr. Stephen C. Lee
Great Malaysia Textile
No. 1, Tanglin Halt Close
Singapore 0314
RE: Country of origin determination for men's woven dress and
sports shirts; substantial transformation where assembly occurs;
sub-assembly of minor parts does not confer country of origin
Dear Mr. Lee:
This letter is in response to your inquiry of February 19,
1992, requesting a country of origin determination for men's
woven dress and sports shirts.
FACTS:
You state that the shirts may be manufactured in either of
three circumstances:
SCENARIO I:
The piece-goods are marked and cut in Country A. All
the cut pieces are sent out to Country B where they are
sewn into completed shirts, packed and exported.
SCENARIO II:
The piece-goods are marked and cut in Country A, where
the collar is also sewn. The completed collar and all
the cut pieces are then sent to Country B where they
are sewn into completed shirts, packed and exported.
SCENARIO III:
The piece-goods are marked and cut in Country A, where
the cuffs are also sewn. The completed cuffs together
with the rest of the unsewn parts are then sent to
Country B where they are sewn into completed shirts,
packed and exported.
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 textiles and
textile products subject to section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).
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). Emphasis added.
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 081320, dated April 14, 1989;
HQ 086696, dated June 8, 1990; HQ 082924, dated March 26, 1990;
HQ 085611, dated January 17, 1990; HQ 951426, dated
April 8, 1992).
Section 12.130(e)(i)(v) makes note that there must be
substantial assembly by sewing or tailoring of a suit-type
garment for substantial transformation to occur. To determine
whether origin is conferred when an article is transformed from
its numerous constituent parts to what is eventually recognized
as the completed garment, i.e., a shirt, one must first define
"substantial assembly."
Substantial assembly can be defined as that operation,
whether by sewing or tailoring, when all the components of the
garment are attached together to form that completed shirt.
Succinctly stated, substantial transformation occurs at the time
of assembly of the individual component parts into a long sleeve
shirt with collar, cuffs, full-front opening with plackets, and
shoulder yokes.
Sewing the individual components of the shirt together,
particularly the long sleeves, collars, yokes and plackets, to
form the completed shirt, necessitates careful and skilled sewing
in the assembly. It is the opinion of this office that the
complete assembly in Country B is beyond a simple sewing
operation and thus qualifies as a substantial assembly process.
In addition, a determination that substantial assembly occurs at
the time of assembly of the individual component parts is in
adherence to the terms set by Section 12.130(e)(1) of the Customs
Regulations. We also refer you to several rulings which have
held that substantial transformation occurs at the time of
complete assembly, e.g., HQ 075323, dated April 1, 1985; HQ
555608, dated January 27, 1990, and HQ 952750, dated October 16,
1992.
A review of these and other cases involving shirts, thus
looks to both the type (structure) of the shirt and the
complexity of the assembly process. In Scenario I all of the
components are cut in Country A and then sent to Country B for
assembly. In Scenario II, the cutting of all the components and
the sub-assembly of the collar components into the completed
collar occur in Country A, and then all parts are sent to Country
B for assembly of the completed shirt. In Scenario III, all of
the components are cut in Country A where there is also the sub-assembly of the cuff components into completed cuffs, and then
all parts are sent to Country B for assembly of the completed
shirt.
In all situations there is a substantial transformation at
the time of assembly of the component parts into the completed
garment. Though a sub-assembly operation does take place in
Scenario II and III in Country A, it is a minor part of the
complete assembly of the garment and should not control the
country of origin determination of the shirt. The assembly
process in Country B, the time at which all the component parts,
including the sub-assembled collar and cuffs are sewn together,
is viewed by Customs as a substantial assembly resulting in a
completed garment.
Thus, country of origin is conferred in Country B; this is
when a substantial assembly of the completed garment takes place.
HOLDING:
Based on the information provided, the country of origin for
the dress and sports shirts in Scenario I, Scenario II and
Scenario III is Country B.
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 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