CLA CO:R:C:T 957011 jb
Priscilla Choy
F. Zimmern & Co.
Central Building, 7th Floor
I-3 Pedder Street
Central, Hong Kong
RE: Country of Origin determination for women's knit wearing
apparel; 19 CFR 12.130(b),(d),(e); cutting constitutes
substantial transformation
Dear Ms. Choy:
This letter is in response to your inquiry of September 9,
1994, on behalf of your client, requesting a country of origin
determination for certain women's knit wearing apparel. A sample
of the garments' constituent parts, before assembly into the
completed garment, were submitted to this office for examination.
FACTS:
The merchandise consists of a woman's knit pullover,
referenced style number WMP 2044/94, and will be constructed of a
wide range of materials including cotton, polyester, and cotton
and polyester mixtures.
You state in your letter that the garment may be processed
in either of the following scenarios:
Case I
fabric is sourced in China
fabric is cut in China
linking, washing, finishing and packaging in Cape Verde
Case II
fabric is sourced in South Korea
fabric is cut in China
linking, washing, finishing and packaging in Cape Verde
Case III
fabric sourced in Taiwan
fabric cut in China
linking, washing, finishing and packaging in Cape Verde
Case IV
fabric sourced in China
fabric is cut in Indonesia
linking, washing, finishing and packaging in Cape Verde
Case V
fabric sourced in China
fabric is cut in Macau
linking, washing, finishing and packaging in Cape Verde
Case VI
fabric is sourced in Macau
fabric is cut in Macau
linking, washing, finishing and packaging in Cape Verde
Case VII
fabric is sourced in Taiwan
fabric is cut in Taiwan
linking, washing, finishing and packaging in Cape Verde
Case VIII
fabric is sourced in Taiwan
fabric is cut in Indonesia
linking, washing, finishing and packaging in Cape Verde
Case IX
fabric is sourced in South Korea
fabric is cut in Indonesia
liking, washing, finishing and packaging in Cape Verde
Case X
fabric is sourced in South Korea
fabric is cut in South Korea
linking, washing, finishing and packaging in Cape Verde
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 textiles and
textile products subject to Section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).
Pursuant to 19 CFR 12.130(b), the standard of substantial
transformation governs the country of origin determination where
textiles and textile products are processed in more than one
country. The country of origin of textile products is deemed to
be that foreign territory or country where the article last
underwent a substantial transformation. Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing.
The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(d)(2). The following are 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) describes manufacturing or processing
operations from which an article will usually be considered a
product of the country in which those operations occurred:
(i) Dyeing of fabric and printing when accompanied by two or
more of the following finishing operations: bleaching,
shrinking, fulling, napping, decating, permanent
stiffening, weighting, permanent embossing, or moireing;
(ii) Spinning fibers into yarn;
(iii) Weaving, knitting or otherwise forming fabric;
(iv) Cutting of fabric into parts and the assembly of those
parts into the completed article; or
(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 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)
952531, dated November 25, 1992, HRL 953697, dated July 26, 1993,
and HRL 955125, dated January 27, 1994).
As was stated by Customs in Treasury Decision (T.D.) 85-38
(19 Cust. Bull. 58, 70; 50 FR 8714), the final document rule
establishing 19 CFR 12.130, in pertinent part:
[T]he assembly of all 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).
Customs has consistently held that the mere assembly of
goods by linking and looping, or simple sewing, is not enough to
substantially transform the components of an article into a new
and different article of commerce (See HRL 082747, dated February
23, 1989; HRL 086665, dated March 23, 1990; HRL 951169, dated
April 1, 1992; HRL 951437, dated July 17, 1992; HRL 952647, dated
January 27, 1993).
In the case of the subject garment, the assembly operation
is a minor combining and sewing operation and does not possess
the requisite degree of complexity to be deemed a substantial
manufacturing process for purposes of conferring country of
origin status. No great degree of skill or technology is
required, nor is tailoring involved.
Additional operations such as washing, and packaging are
considered minor finishing operations and are not sufficient to
affect country of origin. As is stated in section
12.130(e)(2)(i), an article usually will not be considered to be
a product of a particular country by virtue of merely having
undergone:
Simple combining operations, labeling, pressing, cleaning or
drycleaning, or packaging operations, or any combination
thereof;
The cutting operation materially changes the fabric into
designated garment pieces. This constitutes a substantial
transformation of the fabric and confers country of origin.
HOLDING:
The country of origin of the submitted merchandise is the
country in which cutting takes place:
Case I Case II Case III Case IV Case V
China China China Indonesia Macau
Case VI Case VII Case VIII Case IX Case X
Macau Taiwan Indonesia Indonesia South Korea
It is at the cutting process that the fabric last undergoes
a substantial transformation and is transformed into a new and
different article of commerce.
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 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