CLA-2 CO:R:C:T 088283 HP
Ms. Barbara Yao
International Manager
Cach International, Inc.
1527 Newton Street
Los Angeles, CA 90021
RE: Country of origin of men's dress shirts. Cutting;
sewing; trimmings; accessories; marking; packaging
Dear Ms. Yao:
This is in reply to your letter of November 26, 1990,
concerning the country of origin determination of men's dress
shirts.
FACTS:
The merchandise at issue consists of men's 65% polyester
/ 35% cotton dress shirts. You anticipate importing
approximately 9,000 dozen shirts through the Los Angeles port
during the period of March through May of 1991. Your importer
number is 95-3407638. You have described the cost and
operation breakdown by country as follows:
Operation Cost Country
Fabric production. (23 yards @ $14.95/DZ "A"
$0.65/yard)
Designing and styling garment, and $00.25/DZ "A"
marking fabric.
Cutting fabric to shape according $03.20/DZ "A"
to pattern.
Trimming and accessories. $01.70/DZ "A"
Total for Country "A" $20.10/DZ
Sewing fabric pieces, packaging, $08.00/DZ "B"
and exporting.
Total for Country "B" $08.00/DZ
Total Cost $28.10/DZ "A"+"B"
ISSUE:
Whether the manufacturing processes taking place in
country "B" constitute a substantial transformation sufficient
to consider country "B" the country of origin?
LAW AND ANALYSIS:
Textile commodities produced in more than one foreign
country are subject to the country of origin requirements
delineated in section 12.130 of the Customs Regulations (19
C.F.R. 12.130). These regulations provide that:
... a textile product ... which consists
of materials produced or derived from, or
processed in, more than one foreign ...
country shall be a product of that foreign
... country where it last underwent a
substantial transformation.
12.130(b). A textile product undergoes a substantial
transformation when it is "... transformed by means of
substantial manufacturing or processing operations into a new
and different article of commerce."
Section 12.130 of the regulations outlines the criteria
used to determine the country of origin for textiles and
textile products. Specifically, this provision of the
regulations is considered in determining whether a textile
product has undergone substantial manufacturing or processing
operations, and what constitutes a new and different article
of commerce. The factors considered are not exhaustive. In
fact, "one or any combination of criteria may be
determinative, and additional factors may be considered."
In determining whether merchandise has undergone
substantial manufacturing or processing operations, we
consider the (1) physical change in the material or the
article; (2) time involved; (3) complexity of the operations;
(4) level or degree of skill and/or technology required; and
(5) value added to the article in each country.
In HRL 086696 of June 8, 1990, we undertook this analysis
with respect to, inter alia, men's dress shirts. In that
scenario, the piece goods [were] marked
and cut in country A. In addition, the
collars and front panels [were]
constructed in country A; however, the
remaining cut panels together with the
finished components (collars and front
panels) [were] sent to country B and sewn
into completed shirts.
* * *
According to T.D. 85-38 (19 Cust.
Bull. 58, 70; 50 FR 8714), 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 garments will amount to a
substantial transformation of
those pieces. Where either less
than a complete assembly of all
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
12.130(d).
In HRL 086696, we held that "the sewing operations
conducted in country B do not appear to require a high degree
of skill." As nothing suggested that the component assembly
was a complex operation with respect to the time or skill
required, or the value added, we stated that no substantial
manufacturing or processing operation existed.
The procedures taking place in this situation are nearly
identical to those in the above-referenced ruling. The
manufacturing operations are the same, and the additional
value bestowed upon the shirts in country "B" is only 39.8% of
the value of the components upon export from country "A".
Consequently, the shirts have not been substantially
transformed, and country "A" is the country of origin for
quota and marking purposes.
HOLDING:
As a result of the foregoing, Country "A" is the country
of origin of the men's dress shirts under 19 C.F.R. 12.130.
The holding in this ruling 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 C.F.R. 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 C.F.R. 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. In
such a case, it is recommended that a new ruling request be
submitted in accordance with section 177.2, CUSTOMS
REGULATIONS (19 C.F.R. 177.2).
Sincerely,
John Durant, Director
Commercial Rulings Division