HQ 0956303 - Country of origin of various knit shirts; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 956303

August 4, 1994

CLA-2 CO:R:C:T 956303 CAB

CATEGORY: CLASSIFICATION

Dr. T.S. Chow
Yung Wah Industrial Co. (Pte.) Ltd.
121 Neythal Road
Jurong Town, Singapore 2262

RE: Country of origin of various knit shirts; Section 12.130, Customs Regulations

Dear Dr. Chow:

This is in response to your country of origin request of April 15, 1994, for various knit shirts. Samples were submitted for examination.

FACTS:

The garments in question consist of six types of knit shirts. No style numbers were provided. One sample is a 65 percent polyester/35 percent cotton polo shirt that contains short ribbed sleeves, a collar, a front placket with three button means of closure, side slits, and a hemmed bottom. There is also a long sleeve turtle neck shirt constructed of 100 percent cotton material at issue. Another garment at issue is a 65 percent polyester/35 percent cotton short sleeve T-shirt with a hemmed bottom, and a breast pocket. Finally, there are three knit shirts with a V- neck, hemmed bottom, and short sleeves at issue. One V-neck shirt is made of 65 percent polyester/35 percent cotton fabric, contains shoulder pads, and a partial front opening with a three button means of closure. Another V-neck shirt is made of 100 percent cotton material, contains double buttons at the neckline, and three buttons on each sleeve. The final V-neck shirt is made of 65 percent polyester/35 percent cotton fabric and has short sleeves.

The garments at issue are made of fabric knitted, dyed, and finished in Singapore. The fabric will either be constructed of 100 percent cotton or blended cotton and man-made fibers. The structure of the fabric will either be single jersey, interlock, rib, fleece, or other types of knit fabric. The fabric will be cut into garment pieces in Singapore and then transported to other countries for simple sewing and assembly. No specific country has been chosen for this simple processing although the importer states that it will most likely occur in Indonesia.

ISSUE:

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

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 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), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states 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), Customs Regulations, 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), Customs Regulations, states that for 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;

(ii) The time involved in the manufacturing or processing operation;

(iii) The complexity of the manufacturing or processing operation;

(iv) The level or degree of skill and/or technology; and

(v) The value added to the article or material.

Section 12.130(e)(1), 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).

According to T.D. 85-38, the final document rule establishing 19 CFR 12.130:

The 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 a 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 determined that cutting fabric into garment pieces constitutes a substantial transformation of the fabric and the clothing pieces become products of the country where the fabric is cut. (See e.g., Headquarters Ruling Letter (HRL) 952531, dated November 25, 1992, HRL 089539, dated April 22, 1992).

Customs has also long held that the mere assembly of goods entailing simple combining operations, trimming or joining together by sewing is not enough to substantially transform the components of an article into a new and different article of commerce. (See HRL 092787, dated March 9, 1989; and HRL 089539, dated April 22, 1992).

In this instance, the sewing and assembly operation that will be performed in Indonesia or any other unidentified country involves the simple assembly of garment pieces. The sewing does not amount to the complex sewing operation required by Section 12.130(e)(1)(v). The cutting process in Singapore, however, does result in a substantial transformation. The cutting materially changes the fabric into designated garment pieces, which constitutes new and different articles of commerce. Also, the value added to the subject garments in Singapore is substantially more than the value added to the goods in the country of assembly. Therefore, the garments in question are products of Singapore.

HOLDING:

The country of origin of the subject knit shirts is Singapore.

This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted.

Sincerely,

John Durant, Director

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