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HQ 089155

May 20, 1991

CLA-2 CO:R:C:T 089155 CRS


Mr. Ricky Chow
Oceanic Knitting Factory Ltd.
Rua Cinco do Bairro da Areia Preta
No. 3-4 andar

RE: Cutting patterned sweater fabric consisting of three panels along lines of demarcation and assembly of parts into finished sweaters is not a substantial manufacturing or processing operation under 19 CFR 12.130.

Dear Mr. Chow:

Your letter dated March 26, 1991, to the American Consulate General, Hong Kong, concerning the country of origin of coarse gauge sweaters assembled in Macau, has been forwarded to this office for reply. A sample sweater and sample knit fabric were submitted.


Front, back and sleeve panels for sweaters are knit from 55 percent ramie, 45 percent cotton patterned "fabric" in countries other than Macau, e.g., Hong Kong, the People's Republic of China. The finished patterned fabric consisting of three panels each is sent to Macau where it is cut along pre-existing lines of demarcation into individual panels or sleeves. The panels and sleeves, together with collars produced in Macau, are then sewn, linked, looped and stitched into a complete sweater. The finished article is then washed, ironed, labeled and packed for export.


Whether the sweaters have been substantially transformed as a result of the operations performed in Macau.


Pursuant to section 12.130, Customs Regulations (19 CFR 12.130), a textile or textile product which consists of materials produced or derived from, or processed in, more than one foreign territory or country shall be a product of that foreign territory or country 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.

According to 19 CFR 12.130(d)(2), the following factors are to be considered in determining whether merchandise has been subjected to substantial manufacturing or processing operations: the physical change in the material or article, the time involved in the manufacturing or processing operations, the complexity of the operations, the level or degree of skill and/or technology required, and the value added to the article. These criteria are not exhaustive; one or any combination of these criteria may be determinative and additional factors may be considered.

In the instant case, the fabric is demarcated into readily identifiable sweater parts which are then cut and linked in Macau. In Customs' opinion, the cutting and assembly of pre- marked fabric is a simple manufacturing process that does not result in a substantial transformation. HRL 088069 dated January 25, 1991.

Furthermore, 19 CFR 12.130(e)(2), provides in pertinent part that a material usually will not be considered a product of a particular foreign country merely by having undergone:

(ii) Cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use;

(iii) Trimming and/or joining together by sewing, looping, linking or other means of attaching otherwise completed knit-to-shape component parts produced in a single country, even when accompanied by other processes (e.g., washing, drying, mending, etc.) normally incident to the assembly process.

At the time it is exported to Macau, the patterned "fabric" is readily identifiable for use as sweaters. The fabric is a series of three panels bordered on one side with an elasticized rib-knit band, and on the other, by loose stitches temporarily hooking the panels together. All that remains to be done in Macau is to separate the panels and then assemble the component parts into sweaters. Construing sections 12.130(e)(2)(ii) and 12.130(e)(2)(iii) together, it is Customs' opinion that the intent of 19 CFR 12.130 was to exclude the cutting of "fabrics," similar to those at issue, that are readily identifiable for a particular commercial use, and that are subsequently joined by sewing, looping and/or linking.

Finally, based on the information provided, the assembly process appears to be little more than the assembly of knit-to- shape components, a relatively simple operation that does not require a great deal of time. Customs Regulations Amendments Relating to Textiles and Textile Products, 50 Fed. Reg. 8710, 8715 (1985) (final document rule establishing 19 CFR 12.130). You have provided no information of the type set forth in 19 CFR 12.130(d)(2) that would suggest that the Macau assembly process constitutes something more than a relatively simple manufacturing operation. Accordingly, in Customs' opinion the cutting and sewing of the patterned, pre-marked, three panel fabric in Macau does not constitute a substantial manufacturing or processing operation.


The manufacturing operations performed in Macau do not constitute a substantial transformation under 19 CFR 12.130. The country of origin of the sweaters is the country where the fabric is produced.

The holding in this ruling 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. In such a case, it is recommended that a new ruling request be submitted in accordance with section 177.2, Customs Regulations (19 CFR 177.2).


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