CLA-2 CO:R:C:T 950132 PR
Ms. Gloria Arellanes
Manager, Import Administration
Levi Strauss & Co.
1155 Battery Street
San Francisco, CA. 94120
RE: Country of Origin of Sweaters--Fabric Knit in Hong Kong and
Sent to Singapore For Cutting and Assembly
Dear Ms. Arellanes:
This is in reply to your letter of August 9, 1991,
requesting a ruling on the country of origin of certain sweaters.
Our ruling on the matter follows.
FACTS:
The following information has been submitted:
(1) Sweater panels are knit in Hong Kong. The panels
are separated lengthwise into to sections by pulling a
looped stitch. These panels include ribbing along the
outer edges of the panels, and lines of demarcation
knit between the individual fronts and backs of the
sweaters. Sleeves are cut from another panel. These
also have ribbing along the outer edges.
(2) Panels are sent to Saipan. There the individual
sweater parts are cut from the panels, linked,
overlocked, finished and packed.
Five samples were submitted. One is a finished solid color
cotton pullover sweater with a large DOCKERS design knit into
the front panel. It has a long sleeves and rib knit waistband
and cuffs. A second sample is a length of fabric from which the
front panels are cut. It has the rib knit waistband along one
lengthwise edge, cutting lines dividing the panels, and each
panel is knit with a large DOCKERS design. A third sample is a
length of fabric similar to the second sample, only without the
DOCKERS designs--this is presumably to be cut along cutting
lines into back panels. The fourth and fifth samples are cut
sleeve panels (with rib knit cuffs).
ISSUE:
The issue presented is whether the cutting of the fabric
into garment panels and the assembly of those cut pieces in
Saipan is sufficient to cause those sweaters to be products of
the Commonwealth of the Northern Mariana Islands for duty,
marking, and textile restraint purposes.
LAW AND ANALYSIS:
Section 12.130(b), Customs Regulations (19 CFR 12.130)
provides, in pertinent part, as follows:
(b) Country of origin. For the purpose of this section
* * * a textile or textile product * * * which consists
of materials produced or derived from, or processed in,
more than one foreign territory or country, or insular
possession of the U.S., shall be a product of that
foreign territory or country, or insular possession
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.
* * *
Section 12.130(e)(2)(iii) of that same regulation provides
that an article usually will not be considered to be a product of
a second country where otherwise completed knit-to-shape
component parts from one country have been merely assembled in
the second country. In this regard, Customs has consistently
ruled that knit fabric with cutting lines or other markings
establishing the identity of apparel parts will be treated as
knit-to-shape components. Headquarters Ruling Letter (HRL)
088069, dated January 25, 1990, illustrates this rule and also
involves merchandise which is very similar to the instant
fabrics. See also HRL 089155, dated May 20, 1991. Accordingly,
garments made from the sample fabrics are products of the country
where those fabrics were knit.
HOLDING:
Merchandise represented by the submitted sweater, cut and
assembled in Saipan from fabric knit with cutting lines in Hong
Kong, is a product of Hong Kong for duty, marking, and textile
restraint purposes.
Sincerely,
John Durant, Director
Commercial Rulings Division