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HQ 953640

August 19, 1993

CLA-2 CO:R:C:T 953640 jb


Jerry P. Wiskin, Esq.
Freeman, Wasserman & Schneider
90 John Street
New York, NY 10038

RE: Country of Origin determination for a men's dress shirt; substantial transformation where assembly occurs; sub- assembly of minor parts in Country A does not confer country of origin

Dear Mr. Wiskin:

This letter is in response to your inquiry of February 16, 1993, on behalf of your client, Daewoo Corporation requesting a country of origin determination for a men's dress shirt. A completed sample of the shirt after assembly and an uncompleted shirt and its constituent parts before assembly were submitted to this office for examination.


The submitted sample is a long sleeve dress shirt constructed of woven fabric of cotton or various compositions of cotton and polyester. The shirt has a dress collar, full frontal opening with a placket, a yoke across the back extending to the shoulders, a left breast pocket, and cuffs with one or two buttons on each cuff. The shirt size is delineated by collar size and sleeve length. You claim that this shirt is normally worn with a necktie.

You state that the shirt may be manufactured in either of two circumstances:


The unmarked fabric is:

(1) woven and finished in Country A;
(2) woven in Country B and finished in Country A; or
(3) woven and finished in Country B

The finishing operations in Country A include dyeing (and printing for certain fabrics), mercerizing, sanforizing, washing and tentering.

In Country A, the following operations take place:
a. A pattern for each part of the shirt is computer drawn and a pattern marker for each part is produced upon the computer drawing. Sizes are graded and a layout is computer drawn for each size;
b. Following the pattern markers and layouts, the finished fabric is cut into 30 different parts, including collar, band, yoke, cuffs, pocket, right and left panels, a placket, a rear panel, sleeves, and sleeve plackets. The parts are cut to shape and are ready for sewing assembly;
c. The parts of the collar consist of front and back panels, two interlinings, and two fixing stays. The parts of the cuff consist of front and back panels. The collar and cuffs are assembled into completed collar and cuff components. The assembly work for the collar consists of sewing the front and back panels for the collar together, turning over the sewn panels, inserting the interlinings and the stays into the panels, pointing the tips of the panels with an awl and heat pressing the panels. The assembly work for the cuff consists of sewing the front and back panels together, turning over the sewn cuff panels, and heat pressing the cuff panels;
d. The collar and cuff components and the other unassembled parts of the shirt are shipped to Country B, together with accessory materials consisting of buttons, sewing threads, pins, hang tags, labels and folding and packing materials.

In Country B the following operations take place:
a. The left panel for the shirt body and the placket are sewn together and button holed;
b. Following a pattern, the pocket panel is folded, shaped and pressed and is sewn onto the panels for the shirt body;
c. Buttons are attached to the right front panel for the shirt body;
d. The yoke parts and the rear panel are sewn together;
e. The cuffs are button-holed and buttons are attached;
f. The front panels and the rear panel, the collar, sleeves and cuffs are sewn together;
g. The assembled garment is ironed and packed with folding material in a polybag.


This scenario is identical to SCENARIO I above, except that the collar and cuff components are also assembled in Country B.


What is the country of origin of the merchandise at issue?


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).

Section 12.130(b) of the Customs Regulations 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 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 into the U.S.

Section 12.130(e)(1) of the Customs Regulations describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130(e)(1)(v) provides the following:

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.

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, HQ 081320, dated April 14, 1989; HQ 086696, dated June 8, 1990; HQ 082924, dated March 26, 1990; HQ 085611, dated January 17, 1990; HQ 951426, dated April 8, 1992).

Section 12.130(e)(i)(v) makes note that there must be substantial assembly by sewing or tailoring of a suit-type garment for substantial transformation to occur. To determine whether origin is conferred when an article is transformed from its numerous constituent parts to what is eventually recognized as the completed garment, i.e., a shirt, one must first define "substantial assembly."

Substantial assembly can be defined as that operation, whether by sewing or tailoring, when all the components of the garment are attached together to form that completed shirt. Succinctly stated, substantial transformation occurs at the time of assembly of the individual component parts into a long sleeve shirt with collar, cuffs, full-front opening with plackets, and shoulder yokes.

In your letter you refer to several rulings in support of your claim that the country of origin of the subject article should be Country A. In particular, you refer to HQ 951541, dated July 30, 1992, HQ 734489, dated August 4, 1992, HQ 086696, dated June 8, 1990, HQ 089539, dated April 22, 1992 and HQ 952081, dated October 8, 1992.

The sub-assembly operations involved in HQ 951541 and HQ 734489 have been the subject of discussion and review with Customs and other government agencies. As a result, the position taken in these earlier rulings is now viewed as in error. Customs is currently in the process of modifying these rulings to conform to the holding of the subject ruling.

The garments which were the subject of HQ 086696 are distinguishable from the subject garment. In the former, the facts of the case, i.e., the description of the garment and the assembly process described therein, are not identical to the latter. As such, a determination that the assembly process in HQ 086696 was simple was based on information provided by that importer, regarding that particular article.

The holding in HQ 089539 was not solely based on a finding that the added value in Country B was greater than Country C. Though value was a consideration, it was only one factor in the determination as a whole. Of great importance was also the fact that the assembly of the garment in Country C involved a simple sewing operation, neither requiring a high degree of skill nor tailoring.

HQ 952081 is also distinguishable in that it concerned women's pajamas (not shirts), and involved a relatively simple sewing operation with no tailoring.

Sewing the individual components of the shirt together, particularly the long sleeves, collars, yokes and plackets, to form the completed shirt, necessitates careful and skilled sewing in the assembly. It is the opinion of this office that the complete assembly in Country B is beyond a simple sewing operation and thus qualifies as a substantial assembly process. In addition, a determination that substantial assembly occurs at the time of assembly of the individual component parts is in adherence to the terms set by Section 12.130(e)(1) of the Customs Regulations. We also refer you to several rulings which have held that substantial transformation occurs at the time of complete assembly, e.g., HQ 075323, dated April 1, 1985; HQ 555608, dated January 27, 1990, and HQ 952750, dated October 16, 1992.

A review of these and other cases involving shirts, thus looks to both the type (structure) of the shirt and the complexity of the assembly process. In Scenario I all of the components are cut in Country A, there is a sub-assembly of the collar and cuff components into completed collar and cuffs, and then all parts are sent to Country B for assembly of the completed shirt. In Scenario II all of the components are cut in Country A, in Country B the collar and cuff components are assembled into completed collar and cuffs, and the remaining assembly of the completed shirt occurs.

In both situations there is a substantial transformation at the time of assembly of the component parts into the completed garment. Though a sub-assembly operation does take place in Scenario I in Country A, it is a minor part of the complete assembly of the garment and should not control the country of origin determination of the shirt. The assembly process in Country B, the time at which all the component parts, including the sub-assembled collar and cuffs are sewn together, is viewed by Customs as a substantial assembly resulting in a completed garment.

In a recent meeting discussing the country of origin determination, you referred to the issue of what constituted a "position" for purposes of Section 177.10(c)(2) Customs Regulations. In Superior Wire v. United States, et al., 11 C.I.T. 608; 669 F. Supp 472; 1987 Ct. Intl Trade 460; Slip Op. 87-98, the court treated directly the issue of a position for purposes of the Customs Regulations. The court therein, referring to Arbor Foods, Inc. v. United States, 9 C.I.T. 119, 607 F. Supp. 1474 (1985), stated that a series of ruling letters, oral assurances from various Customs officials, and remissions of liquidated damages claims did not constitute a position, where the exact merchandise was not covered by a ruling letter.

The instant circumstances are similar to those described in Arbor Foods. Here there was a reliance on previous ruling letters, most of which did not regard garments identical to the submitted article. Those ruling letters were only available to the public via diskette, an indication that Customs did not consider the ruling letters to be of widespread applicability. Rulings regarded by Customs to be of broad precedential value are generally published in the Customs Bulletin. The previous rulings to which you refer were never published in the Customs Bulletin.

Thus, country of origin is conferred in Country B; this is when a substantial assembly of the completed garment takes place.


Based on the information provided, the country of origin for the dress shirt in both Scenario I and Scenario II is Country B.

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 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).


John Durant, Director

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