CLA-2 CO:R:C:T 953697 CAB

S. Richard Shostak, Esq.
Stein Shostak Shostak & O'Hara
3580 Wilshire Boulevard
Los Angeles, CA 90010-2597

RE: Country of origin of men's shirts

Dear Mr. Shostak:

This letter is in response to your inquiry of March 16, 1993, on behalf of your client, BCTC, requesting a country of origin determination for men's shirts. Samples were submitted for examination.

FACTS:

There are three different styles of shirts at issue. Style 35613 is a men's knit shirt constructed of 35 percent cotton and 65 percent polyester fabric. Style 35613 contains a partial frontal opening and button closure, a breast pocket, a collar, and short sleeves. The fabric is manufactured, knitted, dyed, and cut into garment pieces in Taiwan. The garment pieces are then sent to China for assembly by sewing. The finished shirt is then packaged for export to the United States.

Style 34618 is a men's knit and woven shirt. The knit section of the shirt is constructed of 45 percent polyester and 55 percent cotton, while the woven area of the shirt is made of 100 percent cotton material. Style 34618 contains a partial frontal opening and button closure, a breast pocket, a collar, and short ribbed sleeves and waistband. The fabric is manufactured, knitted or woven, dyed, and cut into garment pieces in Taiwan. The garment pieces are then sent to China for assembly by sewing. The finished shirt is then packaged for export to the United States.

Style 34612 is a men's knit shirt constructed of 35 percent cotton and 65 percent polyester fabric. Style 34612 contains a partial frontal opening, a snap button means of closure, a breast pocket, a collar, and ribbed sleeves and waistband. The fabric is manufactured, knitted, dyed, and cut into apparel pieces in Taiwan. The apparel pieces are then sent to China for assembly by sewing. The finished product is then packaged for export to the United States.

ISSUE:

What is the country of origin for the merchandise in question?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 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 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), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states 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), Customs Regulations, 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), Customs Regulations, states that for 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

(ii) The time involved in the manufacturing or processing

(iii) The complexity of the manufacturing or processing

(iv) The level or degree of skill

(v) The value added to the article or material

Section 12.130(e)(1), 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).

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).

Customs has consistently determined that cutting fabric into garment pieces constitutes a substantial transformation of the fabric, and the clothing pieces become products of the country where the fabric is cut. (See e.g. Headquarters Ruling Letter (HRL) 952531, dated November 25, 1992; HRL 089539, dated April 22, 1992; HRL 951426, dated April 8, 1992; HRL 089834, dated September 26, 1991; and HRL 084979, dated October 23, 1989).

Customs has also 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 e.g. HRL 082787, dated March 9, 1989; and HRL 082747, dated February 23, 1989).

In this instance, the sewing operation performed in China involves the simple assembly of various garment pieces. The sewing does not involve the complex sewing operation required by Section 12.130(e)(1)(v). The cutting process in Taiwan, however does amount to a substantial manufacturing operation. The cutting materially changes the fabric into designated garment pieces, which constitutes new and different articles of commerce. Also, the value added to all the subject garments in Taiwan is substantially more than the value added to the goods in China. Therefore, pursuant to Section 12.130(e), Styles 35613, 34618, and 34612 are subject to their last substantial transformation in Taiwan.

HOLDING:

The country of origin of Styles 35613, 34612, and 34614 is Taiwan.

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 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 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