CLA-2 CO:R:C:T 956304 NLP
S. Richard Shostak, Esq.
Stein, Shostak, Shostak & O'Hara
3580 Wilshire Boulevard, Suite 1240
Los Angeles, CA 90010-2597
RE: Country of Origin determination for women's knit long
sleeve shirts; 19 CFR 12.130; substantial transformation;
fabric is knit, dyed and cut into component parts in
Taiwan; component parts are assembled by sewing in China
into finished garments
Dear Mr. Shostak:
This letter is in response to your inquiry of April 15, 1994,
on behalf of your client, BCTC Corporation, requesting a country
of origin determination for five styles of women's knit shirts.
Samples of the completed shirts were submitted to this office for
examination and will be returned to you under separate cover.
FACTS:
The articles at issue are five styles of women's long sleeve
knit tops. Style numbers 1401 and 1405 are composed of 85%
polyester and 15% cotton knit fabric of Taiwanese origin. Style
numbers 1501, 1503 and 1105 are composed of 65% polyester and 35%
cotton knit fabric of Taiwanese origin. In all cases the fabric
will be cut into component pieces in Taiwan and then shipped to
China for assembly by sewing, ironing, folding and packing before
exportation to the United States. The five samples submitted are
described as follows:
1. Style number 1401
Style number 1401 features a flat knit collar, long sleeves
with ribbed knit cuffs and a ribbed knit waistband. The
front panel is made of pieced fabric construction. There is an
embroidered logo on the upper middle portion of the front panel.
Before assembly in China, the fabric is knit, dyed, cut into 11
components and embroidered in Taiwan.
2. Style number 1405
Style number 1405 features a partial front opening with
button closures, long sleeves with ribbed knit cuffs and a ribbed
knit waistband. The collar has a two button closure, which when
buttoned allows the collar to stand up. If left unbuttoned, the
collar folds down and the inside of the collar is exposed.
The material on the outside of the collar is a flat knit
fabric and has a one inch strip of printed fabric where the
buttons and buttonholes are. The material on the inside of the
collar is a ribbed knit fabric and has an one inch strip of
printed fabric where the buttons and buttonholes are located.
On the upper left portion of the front panel there is an
embroidered logo. Before assembly in China, the fabric is knit,
dyed, cut into 12 components and embroidered in Taiwan.
3. Style number 1501
Style number 1501 features a six inch ribbed knit
turtleneck, long sleeves with ribbed knit cuffs and a straight
hemmed bottom with side vents. Underneath the turtleneck, this
garment has an approximately six and a quarter inch curved panel
whose fabric has a quilted appearance. Under this panel, there
is an embroidered logo. Before assembly in China, the fabric
is knit, dyed, cut into 8 components and embroidered in Taiwan.
4. Style number 1503
Style number 1503 features long sleeves with ribbed knit
cuffs and a ribbed knit waistband. It has a zipper closure
that starts at the top of the mock turtleneck collar and it
extends for seven inches. The front panel is made of pieced
fabric construction. The upper front panel has three
vertical panels; the right and left panels are comprised of a
knit fabric that has a quilted appearance and the middle panel
is comprised of a flat knit fabric that contains the zipper
closure and an embroidered logo. Before assembly in China, the
fabric is knit, dyed, cut into 13 components and embroidered in
Taiwan.
5. Style number 1105
Style number 1105 features hemmed long sleeves and a
straight hemmed bottom. The front panel is constructed of
pieced fabric creating a three panel effect in the
horizontal direction. The middle panel, which is
approximately five and three-quarters inches wide, has an
embroidered logo in its center. The garment has a double
fabric mock turtleneck collar with a drawstring tie.
Before assembly in China, the fabric is knit, dyed, cut into
8 components and embroidered in Taiwan.
ISSUE:
What is the country of origin of the five women's long sleeve
knit tops?
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 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(d) of the Customs Regulations sets forth
criteria for 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) of the 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) 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 onto the U.S.
Section 12.130(e) of the Customs Regulations sets forth
criteria which aid us in determining whether an article has been
subjected to certain manufacturing or processing operations which
serve to substantially transform an article into a new and
different article of commerce. Specifically, Section
12.130(e)(1)(v) is relevant in the instant case. This Section
provides that:
An article or material usually will be a product of a
particular foreign territory or country, or insular
possession of the U.S., when it has undergone prior to
importation into the U.S. in that foreign territory or
country, or insular possession any of the following:
* * * * *
(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).
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, Headquarters Ruling Letter (HRL)
955125, dated January 27, 1994; HRL 953697, dated July 26, 1993;
and HRL 952531, dated November 25, 1992. Customs has also 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. For example, in HRL
953697, Customs held that the assembly process of three men's knit
and/or woven shirts in China, which involved the sewing together
of fabric components that were manufactured, knitted, woven and cut
in Taiwan, did not involve sufficient skill or complexity to
constitute a substantial transformation as defined by Section
12.130(e)(v). Therefore, the country of origin was found to be
Taiwan, as that was where the piece goods were cut into specific
parts and where the articles last underwent a substantial
transformation. See also, HRL 082747, dated February 23, 1989; HRL
086665, dated March 23, 1990; HRL 951169, dated April 1, 1992; HRL
734392, dated August 4, 1992; HRL 953489 dated June 14, 1993; HRL
953698, dated July 19, 1993; HRL 953903, dated August 17, 1993.
In the instant case, the cutting in Taiwan materially alters
the fabric into designated component pieces, which constitute new
and different articles of commerce. The assembly operations to be
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. In assembling the component pieces, no
great degree of skill or advanced technology is required, nor is
tailoring involved. In addition, the value
added to all the subject garments in Taiwan is substantially more
than the value added to the goods in China. Thus, the country of
origin of the five women's long sleeve knit tops is Taiwan, as that
is where the fabric last underwent a substantial transformation.
HOLDING:
The country of origin of the submitted merchandise, referenced
by style numbers 1401, 1405, 1501, 1503 and 1105 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 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