MAR-02 RR:TC:SM 559613 MLR
Mr. Robert Ledlow
Walls Industries, Inc.
1905 N. Main
Cleburne, TX 76031
RE: Country of Origin Marking; Waterproof Garments; 19 CFR
Part 12.130; 19 CFR 102.21
Dear Mr. Ledlow:
This is in reference to your letter of October 26, 1995,
to the New York Seaport, requesting a ruling concerning the
country of origin marking on waterproof garments.
Additional information was submitted on April 23, 1996.
FACTS:
It is stated that shell fabric, consisting of either 100
percent nylon or 100 percent polyester laminated to Gore-tex, zippers, care labels, bar code tags, bag stickers, and
other I.D. tags, all of U.S. origin, will be shipped to Hong
Kong and China. In Hong Kong, the fabric is cut into
various jacket components, and in China, the fabric is cut
into various pants components. The components cut in Hong
Kong, along with lining (100 percent nylon taffeta and 100
percent nylon mesh for the upper body portion of the jacket)
and trimmings of Hong Kong origin will be shipped to China
where they will be assembled into rain jackets, stated to be
classifiable under subheading 6210.20.10, Harmonized Tariff
Schedule of the United States (HTSUS). Subheading
6210.20.10, HTSUS, has been superseded by subheading
6210.20.50, HTSUS. The components cut in China and lining
will be assembled into rain pants, stated to be classifiable
under subheading 6210.40.10, HTSUS. Subheading 6210.40.10,
HTSUS, has been superseded by subheading 6210.40.50, HTSUS.
The rain jackets feature a three-piece hood with a visor
and a drawstring, two large covered zippered pockets, a
rolled hem with an adjustable drawstring, a front zipper
covered by a storm fly that snaps, and raglan sleeves with a
hook and loop take-up tab at the cuff. The rain pants
feature a combination elastic/drawstring at the waist,
concealed suspender buttons inside the waist, knee length
leg zippers, seamless side seam leg construction, and bottom
leg snaps. The finished waterproof garments will then be
imported into the U.S. Two shipments will be imported in
May 1996, and another will be imported after July 1, 1996.
In a telephone conversation on May 2, 1996, you stated that
the jackets to be imported in May, contain a sewn-in label
at the inside center of the neck midway between the shoulder
seams, a hang-tag, and a sticker on the outside plastic
packaging with the markings "Made in Hong Kong."
ISSUE:
What are the country of origin marking requirements of
the imported waterproof garments?
LAW AND ANALYSIS:
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that unless excepted,
every article of foreign origin imported in the U.S. shall
be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or its 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. Congressional intent in enacting 19
U.S.C. 1304 was "that the ultimate purchaser should be able
to know by an inspection of the marking on the imported
goods the country of which the goods is the product. The
evident purpose is to mark the goods so that at the time of
purchase the ultimate purchaser may, by knowing where the
goods were produced, be able to buy or refuse to buy them,
if such marking should influence his will." United States
v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104
(1940).
Part 134, Customs Regulations (19 CFR Part 134),
implements country of origin marking requirements and
exceptions of 19 U.S.C. 1304. 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), and you plan to import one shipment in May
1996, section 12.130(d) and (e), Customs Regulations {19 CFR
12.130(d) and (e)}, will still be applicable. Section
12.130, Customs Regulations (19 CFR 12.130), 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 or 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. See 19 CFR 12.130(b).
According to 19 CFR 12.130(d)(1), 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. According to 19 CFR
12.130(d)(2), the following will be considered in
determining whether merchandise has been subjected to
substantial manufacturing or processing operations: (i) the
physical change in the material or article; (ii) the time
involved; (iii) the complexity of the operations; (iv) the
level or degree of skill and/or technology required; and (v)
the value added to the article in each country or territory.
Section 12.130(e), Customs Regulations {19 CFR
12.130(e)}, describes various processes that will confer
origin. One of those processes is the "cutting of fabric
into parts and the assembly of those parts into the
completed article." 19 CFR 12.130(e)(1)(iv). Pursuant to
19 CFR 12.130(e)(1)(iv), the country of origin of the pants
to be entered in May 1996 will be China because both the
cutting of the components and the assembly will occur in
China. Accordingly, the label submitted containing the
marking "Made in China" will be appropriate.
Another process that confers origin is where
"substantial assembly by sewing and/or tailoring of all cut
pieces of apparel articles which have been cut from fabric
in another foreign country ... into a completed garment"
takes place. 19 CFR 12.130(e)(1)(v). This is contrasted
with other processes set forth at 19 CFR 12.130(e)(2) which
do not result in a change in origin, such as the joining
together by sewing of otherwise completed knit-to-shape
component parts produced in another country. See 19 CFR
12.130(e)(2)(iii).
The difference between 19 CFR 12.130(e)(1)(v) and 19 CFR
12.130(e)(2)(iii) has to do with the nature of the assembly
operation. If there is substantial sewing involved (or
tailoring) of the kind performed in the sewing of suit
jackets, suits, and shirts, the process usually will fall
within the former subsection. If the sewing involved is
characterized as simple, such as where "otherwise completed
knit-to-shape component parts" are merely sewn together, the
process usually will fall within the latter subsection. In
this latter regard, Customs has long held that the mere
assembly of goods entailing simple combining operations,
trimming, or joining by sewing is not enough to
substantially transform the components of an article into a
new and different article of commerce. See Headquarters
Ruling Letter (HRL) 951259, dated April 3, 1992, HRL 082787,
dated March 9, 1989, and HRL 082747, dated February 23,
1989.
In HRL 952639 dated February 22, 1994, Customs
considered the country of origin of men's and women's lined
water-resistant jackets which were assembled in country B
from pieces of fabric produced, cut and made up in Taiwan.
Even though some sub-assembly work occurred in Taiwan, such
as the assembly of the collar, cuffs, sweep bottom, front
placket, and warmer quilting, it was held that the country
of origin of the finished jackets was country B since this
was where there was a complete assembly of the component
parts that made up the garment, and there was a substantial
assembly as opposed to a simple sewing procedure.
In this case, the waterproof jackets appear to be
similar to those considered in HRL 952639. Furthermore, the
jackets are lined, are totally assembled in China, and no
subassembly operations will be performed in Hong Kong,
unlike HRL 952639 where some sub-assembly work occurred in
Taiwan. Accordingly, we conclude that for the jackets to be
entered in May 1996, the country of origin for marking
purposes will be China pursuant to 19 CFR 12.130(e)(1)(v).
You have indicated that 15,000 jackets planned for shipment
in May already contain the marking "Made in Hong Kong." In
T.D. 54640(6), 93 Treas. Dec. 301 (1958), Customs determined
that wearing apparel, such as shirts, blouses, coats,
sweaters, etc., must be legibly and conspicuously marked
with the name of the country of origin by means of a fabric
label or label made from natural or synthetic film sewn or
otherwise permanently affixed on the inside center of the
neck midway between the shoulder seams or in that immediate
area or otherwise permanently marked in that area in some
other manner. To the extent that you are unable to replace
the labels, including the sewn-in labels, it will be
acceptable for purposes of
19 U.S.C. 1304 and T.D. 54640(6) to place a sticker with the
marking "Made in China" over any "Made in Hong Kong"
markings including those on the sewn-in labels, as we find
that it would be economically prohibitive, pursuant to 19
U.S.C. 1304(a)(3)(C), to cut out and replace 15,000 sewn-in
labels. However, the stickers must remain on the jackets
until they reach the ultimate purchaser.
For the jackets and pants to be entered, or withdrawn
from warehouse, for consumption, on and after July 1, 1996,
the general rules set forth in paragraphs (c)(1) through (5)
of section 102.21, Customs Regulations, which implement
section 334 of the Uruguay Round Agreements Act will be used
to determine the country of origin for country of origin
marking purposes. See 60 FR 46188 (September 5, 1995).
Section 102.21(c)(1), Customs Regulations {19 CFR
102.21(c)(1)}, states that "the country of origin of a
textile or apparel product is the single country, territory,
or insular possession in which the good was wholly obtained
or produced." As the jackets and pants are not wholly
obtained or produced in a single country, territory, or
insular possession, paragraph (c)(1) of section 102.21 is
inapplicable.
Section 102.21(c)(2), Customs Regulations {19 CFR
102.21(c)(2)}, provides:
[w]here the country of origin of a textile or apparel
product cannot be determined under paragraph (c)(1) of
this section, the country of origin of the good is the
single country, territory, or insular possession in
which each foreign material incorporated in that good
underwent an applicable change in tariff classification,
and/or met any other requirement, specified for the good
in paragraph (e) of this section.
In this case, the jackets are classifiable under subheading
6210.20.50, HTSUS, and the rain pants are classifiable under
subheading 6210.40.50, HTSUS. The rule set forth under
paragraph (e) for the jackets, classifiable under subheading
6210.20.50, HTSUS, and the pants, classifiable under
subheading 6210.40.50, HTSUS, provides:
6210-6212 (1) If the good consists of two or more
component parts, a change to an assembled
good of heading 6210 through 6212 from
unassembled components, provided that the
change is the result of the good being
wholly assembled in a single country,
territory, or insular possession....
Section 102.21(e), 6210-6212(1) is applicable because the
jackets and pants consist of two or more component parts,
and the component parts are changed to an assembled good of
heading 6210 as a result of being wholly assembled in China.
Accordingly, pursuant to 19 CFR 102.21, the country of
origin of the jackets and pants for country of origin
marking purposes will be China. Therefore, the label
submitted containing the marking "Made in China" will be
appropriate.
HOLDING:
On the basis of the information submitted, the country
of origin of the jackets and pants will be China for country
of origin marking purposes pursuant to 19 CFR
12.130(e)(1)(v) and 19 CFR 12.130(e)(1)(iv), respectively,
for the shipments to be entered May 1996, and 19 CFR
102.21(c)(2) for all shipments to be entered, or withdrawn
from warehouse, for consumption, on and after July 1, 1996.
The designated textile and apparel category may be
subdivided into parts. If so, the visa and quota
requirements applicable to the subject merchandise may be
affected. Since part categories are the result of
international bilateral agreements which are subject to
frequent renegotiations and changes, to obtain the most
current information available, we suggest you check, close
to the time of shipment, the Status Report On Current Import
Quotas (Restraint Levels), an internal issuance of the U.S.
Customs Service which is updated weekly and is available for
inspection at your local Customs office.
Due to the changeable nature of the statistical
annotation (the ninth and tenth digits of the
classification) and the restraint (quota/visa) categories,
you should contact your local Customs office prior to
importation of this merchandise to determine the current
status of any import restraints or requirements.
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 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).
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If
the documents have been filed without a copy, this ruling
should be brought to the attention of the Customs officer
handling the transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division