Cutting of foreign-made fabric to shape as a substantial transformation resulting in a U.S. product

HQ 555310 May 2, 1989 CLA-2-CO:R:C 555310 RA CATEGORY: Classification TARIFF NO.: 9802.00.80, HTSUS Jack D. Mlawski, Esq. Galvin Fox & Palmer 425 Park Avenue New York, New York 10022-3506 RE: Cutting of foreign-made fabric to shape as a substantial transformation resulting in a U.S. product Dear Mr. Mlawski: This is in response to your letter of February 16, 1989, requesting a ruling on behalf of Modas International, Inc., regarding the tariff treatment of certain U.S.-produced lining panels used in the assembly abroad of ladies' wearing apparel. FACTS: Your client proposes to import various skirts, jackets, and pants assembled in the Dominican Republic from lining panels cut in the U.S. from foreign-made fabric. The foreign bulk fabric will be cut into patterns for use as lining panels in the various garments. For example, the lining panels for jackets will include separate front and back panels as well as panels for the sleeves. In the Dominican Republic, the finished garment will be created by utilizing an outer shell made from foreign or Dominican-sourced bulk fabric which will be cut into patterns and sewed by machine to produce the shell. The lining panels made in the U.S. will be sewed together to form the lining of the particular garment which is then sewed to the finished outershell. No further manufacturing operations are to be performed on the linings. ISSUE: Will the cutting of the foreign-made fabric material to a specific pattern or shape in the U.S. result in linings which can be considered U.S.-fabricated components eligible for tariff treatment under subheading 9802.00.80, HTSUS? - 2 - LAW AND ANALYSIS: Tariff treatment under subheading 9802.00.80, HTSUS, is limited to fabricated components of U.S. origin which are assembled abroad. Section 10.14(b), Customs Regulations (19 CFR 10.14(b)), provides that an article made from foreign-produced materials can be treated as a product of the U.S. if it is substantially transformed in this country by a manufacturing process which results in a new and different article of commerce. The cutting of garment parts from foreign-made fabric has been held to be sufficient to transform the fabric into products of the U.S. T.D. 85-39, 19 Cust. Bull. 58 (1985) and our ruling 554929 dated November 3, 1988. HOLDING: On the basis of the information presented, the cutting in the U.S. of the foreign fabric into specific lining panels for ladies' wearing apparel is sufficient to make the panels fabricated U.S. components which will qualify after assembly abroad by sewing for tariff treatment under subheading 9802.00.80, HTSUS, upon compliance with sections 10.11 to 10.24, Customs Regulations (19 CFR 10.11 to 10.24). Sincerely, John Durant, Director Commercial Rulings Division