Country of origin determination for girls' shirt

HQ 953227 March 26, 1993 CLA-2 CO:R:C:T 953227 CAB CATEGORY: Classification Ms. Jenny Feng Sung Kiang Industrial Co., Ltd. 6th Fl. No. 67, Sung Kiang Rd. Taipei, Taiwan, (Formosa) Republic of China RE: Country of origin determination for girls' shirt Dear Ms. Feng: This ruling is in response to your inquiry of January 5, 1993, requesting a country of origin determination for girls' shirts. A sample was submitted for examination. FACTS: The sample in question is a girls' woven knit long sleeved turtle neck shirt. The shirt is constructed of 55 percent cotton/45 percent polyester material. A tag attached to the shirt states that it is made in Taiwan. The fabric is manufactured, knitted, dyed, and cut into garment pieces in Taiwan. The cut apparel pieces are then sent to China for sewing, assembly, and packaging for exportation to the United States. The total cost of the materials and processing for the garments at issue is $13.76 per dozen. The cost of manufacturing and materials incurred in Taiwan is $11.26 per dozen while the cost of processing and materials incurred in China is $2.50 per dozen. ISSUE: What is the country of origin for the goods in question? 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 (iii) The complexity of the manufacturing or processing (iv) The level or degree of skill (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 the 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 situation 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 November 25, 1992; HRL 089539 dated April 22, 1992; HRL 951426 dated April 8, 1992; HRL 089834 dated September 26, 1991; and HRL 084979 dated October 23, 1989). 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 e.g. HRL 082787 dated March 9, 1989; and HRL 082747 dated February 23, 1989). In the instant scenario, the sewing operation in China involves the simple assembly of the cut garment pieces. The sewing operation does not amount to the complexity necessary to substantially transform the merchandise in accordance with Section 12.130. The processing operation in Taiwan which involves cutting the fabric into designated garment pieces, knitting, and dyeing results in a sufficiently complex manufacturing operation which transforms the fabric into new and different articles of commerce. Therefore, the merchandise in question underwent its last substantial transformation in Taiwan. HOLDING: The country of origin of the subject merchandise is Taiwan. 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 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 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). Sincerely, John Durant, Director Commercial Rulings Division