CLA-2 CO:R:C:T 951541 jb
Andrew P. Vance, Esquire
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016
RE: Country of Origin determination for men's polyester/cotton
woven dress shirts
Dear Mr. Vance:
This letter is in response to your inquiry of April 7, 1992,
on behalf of your client, Luen Thai, requesting a country of
origin determination for men's woven polyester/cotton dress
shirts. As requested, your sample will be returned under
separate cover.
FACTS:
The submitted sample is a long sleeve, woven men's 65
percent/35 percent cotton, white dress shirt. The shirt has a
dress collar, full frontal opening with placket, a yoke across
the back extending to the shoulders to which a single panel is
sewn, left breast pocket, and cuffs with two buttons on each
cuff.
You state that the dress shirts may be manufactured by
either of the following circumstances:
(1) The fabric is made in one country (not Hong Kong or
China) and thereafter the fabric is marked and cut into
shirt panels in Hong Kong. All parts are then
assembled, sewn, ironed and packed in China; or
(2) The fabric is made in one country (not Hong Kong or
China) and thereafter the fabric is marked and cut into
shirt panels in Hong Kong. At the same time the
collars and cuffs are sewn in Hong Kong, and then
all parts and the collars and cuffs are assembled, sewn,
ironed and packed in China; or
(3) The fabric is made in one country (not Hong Kong or
China) and thereafter the fabric is marked and cut into
shirt panels in Hong Kong. At the same time the
collars are sewn in Hong Kong and then all parts
and the collars are assembled, sewn, iron and packed in
China.
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 textile and
textile products subject to section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).
This regulation, which became effective in 1985, came about
as a result of Executive Order No. 12475 (49 FR 19955 (1984)),
which directed the Secretary of Treasury, in accordance with
policy guidance provided by the Committee for the Implementation
of Textile Agreements, to issue regulations governing the entry,
or withdrawal from warehouse for consumption, of textile and
textile products subject to section 204. The regulations were to
include clarifications in, or revisions to, the country of origin
rules for textiles and textile products subject to section 204 in
order to avoid circumvention of multilateral and bilateral
textile agreements.
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)
According to T.D. 85-38, 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 garment pieces will amount to a substantial
transformation of those pieces. Where either less than a
complete assembly of all the 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
situation as they arise, utilizing the criteria in section
12.130(d). 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 731028, dated July 18, 1988; HQ
731306, dated July 17, 1989; HQ 732485, dated January 18, 1990;
HQ 556070, dated July 1, 1991)
Customs has long held that the mere assembly of goods,
entailing simple combining operations, trimming or joining
together by sewing is not enough to substantially transform the
components of an article into a new and different article of
commerce (see HQ 086696, dated June 8, 1990; HQ 088283, dated
February 28, 1991 and HQ 089539, dated April 22, 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. Tailored is
defined as:
Having simple, trim, fitted lines obtained by careful
cutting, seaming and pressing. Mary Brooks Picken, The
Fashion Dictionary at 377 (1973).
1. Fashioned or fitted to resemble a tailor's work. 2.
Custom made. 3. Having the look of one fitted by a custom
tailor. Webster's Ninth New Collegiate Dictionary at 1202
(1991).
The submitted sample is a dress shirt; also considered a
"suit-type" shirt. Dress shirt is defined as:
Man's shirt for evening wear. See shirts.
Mary Brooks Picken, The Fashion Dictionary at 114 (1973).
Man's white shirt for evening wear, usually having starched,
tucked, or pleated bosom. Id. at 322.
A man's shirt especially for wear with evening dress;
broadly: a shirt suitable for wear with a necktie.
Webster's Ninth New Collegiate Dictionary at 383.
As the definitions of dress shirt illustrate, the requisite
operations that are entailed in the production of this more
tailored article, necessitate careful and skilled sewing in the
assembly. The assembly operation is thus not a factor of how
much time is employed but rather the skill and complexity that is
involved.
As concerns the subject merchandise, in the first set of
circumstances, where all of the assembly and sewing is done in
China, substantial transformation also occurs in China. As
provided in section 12.130(e)(1)(v), since the processing
operations performed in China involve a substantial assembly by
sewing of all the cut pieces, this satisfies the manufacturing or
processing requirement from which an article will usually be
considered a product of the country in which those operations
occurred.
In the second and third set of circumstances, only partial
sewing and assembly operations are performed in China. Before
this stage in the processing is reached, the fabric is marked,
cut and partially sewn and assembled in Hong Kong. As stated in
T.D. 85-38, not all assembly operations of cut garment pieces
will amount to substantial transformation of those pieces, giving
as an example thereof, the situation where less than a complete
assembly of all the cut pieces is performed in one country.
In both the second and third circumstances the partial sewing and
assembly operations are not considered significant enough to
qualify as "substantial transformation". As such, substantial
transformation remains that of the country in which the cutting
of the fabric was performed, that is to say, Hong Kong.
HOLDING:
The country of origin of the submitted merchandise in each
of the three factual situations presented is as follows:
(1) Where the fabric is made in one country, cut
into shirt panels in Hong Kong, and then all parts
assembled, sewn, ironed and packed in China, the country
of origin is China.
(2) Where the fabric is made in one country, marked and
cut into shirt panels in Hong Kong (where the collars
are cuffs are also sewn), and then all parts including
the collars and cuffs are assembled, sewn, ironed and
packed in China, the country of origin is Hong Kong.
(3) Where the fabric is made in one country, marked and
cut into shirt panels in Hong Kong (where the collars
are also sewn), and then all parts including the collars
are assembled, sewn, ironed and packed in China, the
country of origin is Hong Kong.
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 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