Country of origin determination for two shirts

HQ 951423 July 28, 1992 CLA-2 CO:R:C:T 951423 JED CATEGORY: Country of origin Ms. Judith A. Schechter Grunfeld, Desiderio, Lebowitz & Silverman 12 East 49th Street New York, New York 10017 RE: Country of origin determination for two shirts Dear Ms. Schechter: This is in response to your letter of March 26, 1992, requesting a country of origin determination for two styles of shirts, identified as Style 4324 and Style 4321. FACTS: Your client is contemplating a multi-country processing operation to produce two styles of shirts, Style 4324 and Style 4321. Both are knit sweatshirt-like tops of 85% polyester and 15% cotton fleece. (We note that this description of the fabric does not match the fabric disclosure on the neck labels of the samples submitted. This does not, however, prevent a country of origin determination being made on the facts submitted.) The fabric will be knit and printed or dyed in Taiwan. The fabric, which will not have any lines of demarcation, will be sent to Singapore where it will be cut into garment components. The cut components and trim (e.g., labels) will then be sent to Malaysia or Indonesia for assembly by sewing and for packaging. Finished garments will be returned to Singapore for export to the U.S. ISSUE: What is the country of origin of the above described shirts? LAW AND ANALYSIS: For country of origin purposes, 12.130, Customs Regulations (19 CFR 12.130), is applicable to the merchandise at issue. Section 12.130(b) provides that a textile product that is processed in more than one foreign territory or country, or insular possession of the U.S., shall be a product of that foreign territory or country, or insular possession of the U.S. where it last underwent a substantial transformation. A textile product will be considered to have undergone a substantial -2- 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 (19 CFR 12.130(d)), sets forth criteria for evaluating the two prongs of the substantial transformation determination. The regulation states that the 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) states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered regarding the manufacturing or processing operations in each foreign country or territory, or insular possession of the U.S.: (i) the resulting physical change in the material or article; (ii) the time involved; (iii) the complexity of the operations; (iv) the level or degree of skill and/or technology required; and (v) the value added to the article or material. Customs has long held that the mere assembly of goods by 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. For example, in HRL 082747 (February 23, 1989) Customs determined that the assembly of jeans was not a substantial transformation and in HQ 950887 (March 2, 1992) held that the assembly of piece goods into a brassiere was not a substantial transformation. The sewing operation performed in Malaysia or Indonesia involves the simple assembly of several cut pattern pieces; front and back panels, sleeve panels and trim. The sewing does not involve the complex sewing operation required when manufacturing a suit, suit jacket or tailored shirt contemplated by 12.130(e)(v). The cutting in Singapore materially changes the fabric into designated garment pieces. Since assembly of the garment by sewing does not result in a substantial transformation, the cutting process in Singapore constitutes the time and place at which the last substantial transformation occurs. HOLDING: The country of origin of the submitted shirts, Style 4324 and Style 4321, is Singapore. -3- Section 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)), states that a ruling 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. Accordingly, the holding set forth above applies only to the merchandise identified in the ruling request. 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. If there is a change in the facts furnished, the holding in this ruling may be affected. In such an event, it is recommended that a new ruling request be submitted in accordance with 177.2, Customs Regulations (19 CFR 177.2). Sincerely, John Durant, Director Commercial Rulings Division