CLA-2 CO:R:C:T 955123 SK

James H.C. Kuo
Tuntex Incorporation
No. 99, Sec. 2, Tunhwa South Road, 34th Fl.
Taipei, Taiwan 106 Republic of China

RE: Country of origin of men's shorts; fabric cut in Taiwan; simple assembly in China; 19 CFR 12.130(b)(d)(e); cutting constitutes substantial transformation.

Dear Mr. Kuo:

This is in response to your letter of September 27, 1993, requesting a country of origin determination for men's shorts. A sample of the finished garment, plus a bundle consisting of the garments' constituent parts, were submitted to this office for examination.

FACTS:

You have requested a country of origin determination for a pair of men's shorts, referenced style number #7. The shorts are made of a woven blend of 70 percent polyester and 30 percent cotton. The garment features an elastic waistband, front pleats, two front pockets and one rear pocket which closes by means of a Velcro-like strip. The shorts have a one button front closure with a zipper and the inseams measure approximately eight inches. The hangtag reads "First Run."

You do not state where the fabric for these shorts is formed and, in the instant case, this fact is not determinative of the garment's country of origin. The fabric is cut into the shorts' component parts in Taiwan. These cut parts are subsequently shipped to China for assembly. The finished shorts are then shipped directly from China to the United States. ISSUE:

What is the country of origin for the men's shorts at issue?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) 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; (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;

(ii) The time involved in the manufacturing or processing;

(iii) The complexity of the manufacturing or processing;

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations;

(v) The value added to the article or material;

Section 12.130(e)(1)(v) of the Customs Regulations describes manufacturing or processing operations by which an article will usually be considered a product of the country in which these operations occur:

(v) 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 (19 Cust. Bull. 58, 70; 50 FR 8714), the final document rule establishing 19 CFR 12.130:

[T]he 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 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 situations as they arise, utilizing the criteria in section 12.130(d). [emphasis added]

This office has consistently 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 Headquarters Ruling Letters (HRL's) 082747, dated February 23, 1989; 086665, dated March 23, 1990; 951169, dated April 1, 1992; 951437, dated July 17, 1992; 952647, dated January 27, 1993.

In the instant case, the assembly operations performed in China are mere combining and sewing operations and do not possess the requisite degree of complexity to be deemed substantial manufacturing processes for purposes of conferring country of origin status. No great degree of skill or advanced technology is required, nor is tailoring involved. The cutting in Taiwan for the shorts materially alters the fabric into designated garment pieces. This constitutes a substantial transformation of that fabric.

HOLDING:

The country of origin of the shorts, referenced style # 7, is Taiwan. It is during the cutting process in Taiwan that the fabric undergoes a substantial transformation and is transformed into new and different article of commerce (shorts) by means of substantial manufacturing operations (cutting the fabric into designated shorts componentscomponent parts of a garment).

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 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