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HQ 732623

November 6, 1989

MAR-2-05 CO:R:C:V 732623 KG


Richard A. Rivkin
Latex Glove Co. Inc.
205 Huehl Road
Northbrook, Illinois 60062

RE: Country of origin marking of imported cotton work gloves

Dear Mr. Rivkin:

This is in response to your letter of July 31, 1989, requesting a country of origin ruling regarding imported cotton work gloves. A sample glove and the pieces of a glove were submitted for examination.


The fabric is purchased and cut into pieces in country A. The pieces are then shipped to country B for sewing, turning, pressing, matching into pairs, packing, and final shipment to the U.S. You assert that the skill level associated with cutting the pieces is relatively low and that a worker can be trained to cut glove parts in less than one month. In contrast, you state that a high degree of skill is required for sewing the finished product because the seams are short and frequently curve and change direction and that a minimum of six months of training is necessary to achieve acceptable quality and productivity from a new worker.

Further, the total time for the manufacturing operations for one dozen pairs of gloves performed in country A is 0.0188 hours compared to 1.1733 hours in country B.


What is the country of origin for the purposes of 19 CFR 12.130 of imported cotton work gloves manufactured as described above.


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The U.S. Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT ___(CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297, 302, C.A.D. 104 (1940), where the court stated that: 'Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will."

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 12.130, Customs Regulations (19 CFR 12.130), sets forth the principles for making country of origin determinations for textile and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854)("section 204"). According to T.D. 85-38, the final rule document published in the Federal Register on March 5, 1985 (50 FR 8714),which established 19 CFR 12.130, the principles of country of origin for textiles and textile products contained in 19 CFR 12.130 are applicable to such merchandise for all purposes, including duty and marking. This regulation, which became effective in 1985, came about as a result of Executive Order No. 12,475, 49 FR 19955 (1984), which directed the Secretary of Treasury, in accordance with policy guidance provided by the Committee for the Implementation of Textile Agreements, to issue regulations governing the entry or withdrawal from warehouse for consumption of textile and textile products subject to section 204. The regulations were to include clarifications in or revisions to the country of origin rules for textiles and textile products subject to section 204 in order to avoid circumvention of multilateral and bilateral textile agreements.

The U.S. Court of International Trade upheld the interim regulations which included 19 CFR 12.130, published as T.D. 84- 171 in the Federal Register on August 3, 1984 (49 FR 31248), in Mast Industries, Inc. v. Regan, 596 F. Supp. 1567 at 1582 (CIT 1984). The court stated that the purpose of the interim textile regulations is "prevention of the entry of textile products into the United States on quotas not applied to the country which manufactured all or a substantial part of the textile products. Accordingly, interim regulation section 12.130 defines country of origin and established criteria for substantial transformation in order to prevent nearly completed textile products of one country from being imported into the United States on the quota of another country."

When T.D. 85-38 was published, the background information cited an intention to reject the theory of Cardinal Glove Co. v. United States, 4 C.I.T. 41 (1982), as one of the motivations of the drafting of the new textile regulations. Cardinal Glove involved cotton work gloves. The cotton fabric was produced in Hong Kong, and cut into front and back panels in Hong Kong. These front and back panels were assembled by sewing in Haiti. The gloves were then turned inside out, pressed, inspected, paired, folded and bundled in Haiti. The court held that the assembly and processing of the gloves in Haiti transformed the gloves into an export of Haiti and that therefore, the gloves were considered to be from Haiti, the country of exportation. This meant that the bilateral textile agreement between the U.S. and Hong Kong was inapplicable and a Hong Kong export license or visa was unnecessary for entry into the U.S. The court noted that "the exportation of merchandise from a country producing a product to an intermediate country for the purpose of processing, manipulating or assembling that product, is a common practice in our present day industrial and technological economy." Cardinal Glove at 43-44. It was feared that this theory or principle would create a mechanism to circumvent the textile import program and multilateral and bilateral textile agreements.

Customs stated in a notice dated September 16, 1982, published as T.D. 82-169, its intention not to follow the country of exportation concept set forth in Cardinal Glove, but rather to apply the substantial transformation test.

Pursuant to 19 CFR 12.130, the standard of substantial transformation governs the determination of the country of origin 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, country, or insular possession 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 operations. The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d) and (e).

In this case, we are not convinced that the processing in country B is a substantial manufacturing or processing operation. Although 19 CFR 12.130(e) lists substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which have been cut from fabric in another foreign territory, country or insular possession into a completed garment as an example of a manufacturing or processing operation that may qualify for substantial transformation, the regulation clearly does not mean that all sewing operations will qualify and the examples given are the complete assembly of all cut pieces of suit-type jackets, suits, and shirts. The sewing of cotton work gloves is not analogous to sewing suit-type jackets, suits or shirts.

You compared the skill level and time required for cutting as opposed to sewing. As discussed above, the complexity of the sewing operation in this case is less than the complexity involved in sewing a suit-type jacket, suit or shirt. Further, while the sewing alone may be more complex and time-consuming than the cutting alone, cutting and sewing of a garment in a single country is listed in 19 CFR 12.130(e)(1)(iv) as a qualifying manufacturing or processing operation. Moreover, in this instance the cloth is purchased and cut in country A. While cutting may not involve much labor, it often involves a substantial capital input. For all the above reasons, Customs considers country A to be the country of origin for the purposes of 19 CFR 12.130.

Further, although these work gloves may have been considered to be from country B in accordance with Cardinal Glove, 19 CFR 12.130 was included as part of the Customs Regulations after Cardinal Glove was decided and in response to the conclusion reached. Therefore, Customs does not consider itself bound by Cardinal Glove in this instance.


The cotton work gloves are from country A for the purposes of 19 CFR 12.130.


John Durant

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