MAR-2-05 CO:R:C:V 731041 jd
Peter W. Klestadt, Esq.
Grunfeld, Desiderio, Lebowitz
& Silverman
12 East 49th Street
New York, New York 10017
RE: Country of origin marking requirements for wearing apparel
manufactured in the Commonwealth of Northern Mariana Islands
or Guam
Dear Mr. Klestadt:
This is in reply to your letter of February 5, 1988,
requesting a ruling on the country of origin marking requirements
for wearing apparel to be manufactured in the Commonwealth of
Northern Mariana Islands, also referred to as Saipan, or Guam.
FACTS:
According to your submission, unmarked cotton knit fabric
which is produced in a third country will be shipped in bulk to
either the Commonwealth of Northern Mariana Islands or to Guam
where it will be cut, sewn and finished into rugby-style shirts.
You have inquired as to what marking requirements, if any,
of 19 U.S.C. 1304 are applicable to such importations. You are
aware of Federal Trade Commission jurisdiction over certain
markings contemplated for such importations, e.g., "Made in
U.S.A. of imported fabric", and you have supplied us with a copy
of a response you received from the FTC concerning this matter.
ISSUE:
Do the country of origin marking requirments of 19 U.S.C.
1304 apply to wearing apparel manufactured in the Commonwealth of
Northern Mariana Islands (Saipan) or Guam?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides that every article of foreign origin (or
its container) imported into the United States shall be marked in
a conspicuous place as legibly, indelibly, and permanently as the
nature of the article (or container) will permit, in such a
manner as to indicate the foreign origin of the article.
- 2 -
Section 134.1(c), Customs Regulations (19 CFR 134.1(c)),
defines "foreign origin" as "a country of origin other than the
United States, as defined in paragraph (e) of this section, or
its possessions and territories." Section 134.32(1), Customs
Regulations (19 CFR 134.32(1)), specifically excludes from the
marking requirements of 19 U.S.C. 1304 those articles which are
"products of possessions of the United States."
Further, { 12.130, Customs Regulations (19 CFR 12.130),
requires that the standard of substantial transformation govern
the determination of the country of origin where textiles and
textile products are processed in more than one country. The
country of origin of textile products is deemed to be that
foreign territory, country, or insular possession where the
article last underwent a substantial transformation. Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing operations.
You indicate that foreign piece goods will be imported into
Saipan or Guam and there cut and made into articles of apparel.
Without samples of the merchandise as it enters and as it leaves
Saipan or Guam, we are unable to definitively rule on whether the
piece goods have undergone a change in the country of origin.
However, your attention is directed to { 12.130 (e)(iv), Customs
Regulations (19 CFR 12.130(e)(iv)), which states that the cutting
of fabric into parts and the assembly of those parts into the
completed article will usually result in the processing country
being the country of origin. In addition, Customs has held that
the cutting of fabric (which contains no indication of where that
fabric is to be cut) into garment parts constitutes a substantial
transformation of the fabric and the parts become a product of
the country where the fabric is cut.
Therefore, if the fabric imported into Saipan or Guam is
not marked in any way for cutting, the resulting garments will be
products of Saipan or Guam, respectively.
Commencing on July 18, 1947, the U.S. became the
administering authority of the Trust Territory of the Pacific
Islands, an area including the Northern Mariana Islands
(Trusteeship Agreement, 61 Stat. 3301, T.I.A.S. No. 1665, 8
U.N.T.S. 189). In accordance with provisions of the trust
agreement to promote self-government for the peoples of the trust
territory, on March 24, 1976, the U.S. signed a Covenant to
Establish a Commonwealth of the Northern Mariana Islands in
Political Union with the United States, Pub. L. 94-241, 90 Stat.
263. That covenant became fully effective as of November 4, 1986
and replaced the trusteeship agreement (see Presidential
Proclamation 5564 of November 3, 1986 and E.O. 12572 of November
3, 1986).
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Article 6 of the Covenant, { 603(c), provides that "Imports
from the Northern Mariana Islands into the customs territory of
the United States will be subject to the same treatment as
imports from Guam into the customs territory of the United
States."
Customs has previously ruled that products of Guam are
excepted from country of origin marking requirements under
{ 134.32(1), Customs Regulations (19 CFR 134.32 (1)), as products
of possessions of the U.S. (725787 HL; July 25, 1984). In
regards to the Northern Mariana Islands, "Customs treats the
Northern Mariana Islands as a territory or possession of the
United States and products therefrom would be excluded from the
country of origin marking requirements" (729704 km; September 12,
1986).
The Federal Trade Commission, pursuant to rules and
regulations issued under the authority of the Textile Fiber
Products Identification Act, stated in a staff opinion letter
that garments made in Saipan or Guam of imported fabric should be
labeled "Made in the USA of Imported Fabric" (FTC letter to Peter
W. Klestadt, Esq., dated January 25, 1988).
HOLDING:
Wearing apparel that is a product of the Northern Mariana
Islands or Guam is exempt from the country of origin marking
requirements of 19 U.S.C. 1304 upon importation into the U.S.,
but must be marked in accord with the FTC requirements noted
above.
Sincerely,
John Durant, Director
Commercial Rulings Division
1cc:CO:R:C:V:JDOYLE:LDC:7/12/88
Peter W. Klstadt, Esq.
Grunfeld, Desiderio, Lebowitz
& Silverman
12 East 49th Street
New York, New York 10017