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HQ 954424

August 11, 1993

CLA-2 CO:R:C:T 954424 HP


Mr. Mark Haney
Director - QMS
2121 K Street, N.W.
Washington, D.C. 20037

RE: Country of origin of women's woven jackets.

Dear Mr. Haney:

This is in reply to your letter of June 17, 1993. That letter concerned the country of origin of jackets, produced in Honk Kong, Sri Lanka or China.


The merchandise at issue consists of two styles of woman's woven jackets, #UF8140 and #UF7744. Style #UF8140 is of 100% cotton denim, while style #UF7744 is 55% ramie and 45% cotton. Production will be contracted by Mastex Impex Ltd., a Hong Kong firm. Their address is Room 1604-5, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong.

The garments will be cut and completely assembled in Sri Lanka from Hong Kong fabric. Front panel embroidery is then performed in China, and the jackets are packed and shipped from Hong Kong. The value added from the fabric creation, cutting/assembly, and embroidery are all within six percent of each other.


What is the country of origin of the completed jackets?


Textile commodities produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130). These regulations provide that: . . . a textile product . . . which consists of materials produced or derived from, or processed in, more than one foreign . . . country shall be a product of that foreign . . . country where it last underwent a substantial transformation.

12.130(b). A textile product undergoes a substantial transformation when it is ". . . transformed by means of substantial manufacturing or processing operations into a new and different article of commerce."

Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regulations is considered in determining whether a textile product has undergone substantial manufacturing or processing operations, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determinative, and additional factors may be considered." In determining whether merchandise has undergone substantial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country.

Section 12.130(e)(iv) of the regulations states that "[c]utting of fabric into parts and assembly of those parts into the completed article" constitutes a substantial transformation. Therefore, the jackets could be considered products of Sri Lanka. We must now decide whether the embroidery work performed in China to the completed jackets constitutes a second substantial transformation. If so, the garments will be products of China for quota/visa purposes.

As we stated above, the value added due to the Chinese materials and labor is significant when compared to the Hong Kong and Sri Lanka. Nonetheless, the embroidery work performed to the jackets does not change the identity or fundamental character of the jackets. After the embroidering is completed the jackets still remain jackets, although they are now embroidered jackets. Customs has previously held that embroidery work performed on garments which does not change the identity or fundamental character of those garments is not a substantial transformation. See HRL 089068 of July 1, 1991 (polar bear embroidered onto a sweater). Accordingly, the Chinese processing does not affect the country of origin, which remains Sri Lanka.


As a result of the foregoing, the instant merchandise is considered a product of Sri Lanka.

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 177.9(b)(1), Customs Regulations (19 C.F.R. 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 C.F.R. 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 177.2, Customs Regulations (19 C.F.R. 177.2).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


John Durant, Director
Commercial Rulings Division

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