Country of origin determination for men's knitwear; 19 CFR Section 102.21(c)(2); knit to shape

HQ 960596 March 9, 1996 CLA-2 RR:TC:TE 960596 ASM CATEGORY: Classification Harold I. Loring, Esq. Grunfeld, Desiderio, Lebowitz & Silverman LLP 245 Park Avenue, 33rd Floor New York, NY 10167-3397 RE: Country of origin determination for men's knitwear; 19 CFR Section 102.21(c)(2); knit to shape Dear Mr. Loring: This is in reply to your request of March 3, 1997, for a country of origin determination on behalf of your client, Tommy Hilfiger U.S.A., Inc., regarding certain men's knitwear which will be imported into the United States. Samples of the finished garment and component pieces have been submitted to this office for examination. FACTS: The subject merchandise is a man's knit pullover garment constructed from 100 percent cotton, jersey knit fabric measuring 12 stitches per 2 centimeters counted in the horizontal direction. The garment has a rib knit, convertible collar with a zippered closure, long sleeves with rib knit cuffs, an embroidered logo on the left chest, and a rib knit bottom. The pullover is classifiable in subheading 6110.20.2065, HTSUSA, dutiable at 19 percent ad valorem, quota category 338. The upper portion of the from panel has numerous vertical lines of dropped stitches which are designed to mark the V-shaped neck opening where the fabric will be cut to accommodate the convertible collar. The back panel has a small curve knitted into the neckline to accommodate the contour of the rear neckline. The rib knit collar will be linked to the neckline following these contours. Full fashion marks appear in the armhole area of the front and back panels. The rib knit waistband is knit as an integral part of each panel. The sleeves are knit to shape with visible full fashion marks. The rib knit cuffs are knit as an integral part of each sleeve panel. The armholes do not appear to require any further cutting or shaping prior to the attachment of the sleeve panels because the shape of the armhole is straight and the underarm area is shaped by full fashion marks on both the sleeves and the front and back panels. According to your submission, the sweater will be manufactured as follows: Scenario #1 Country A (Bangladesh): - front panel is knit with line of demarcation at the neck - back panel is knit to shape - two long sleeve panels are knit to shape - collar/neck pieces are knit Country B (China): - neck of front panel is shaped by cutting along the line of demarcation - collar/neck pieces are shaped by cutting - zipper is attached - components are linked into a finished garment Scenario # 2 Country A (Bangladesh): - front panel is knit with line of demarcation at the neck - back panel is knit to shape - two long sleeve panels are knit to shape Country B (China): - neck of front panel is shaped by cutting along the line of demarcation - collar/neck pieces are knit - collar/neck pieces are shaped by cutting - zipper is attached - components are linked into a finished garment ISSUE: What is the country of origin of the subject merchandise? LAW AND ANALYSIS: On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. 3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations, in the Federal Register, implementing section 334 (60 FR 46188). Thus, effective July 1, 1996, the country of origin of a textile or apparel product shall be determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of Section 102.21; however, first it must be determined whether or not the subject merchandise is "knit to shape" within the meaning of the Regulations. Section 102.21(b) of the Customs Regulations states: (3) Knit to shape. The term knit to shape applies to any good of which 50 percent or more of the exterior surface area is formed by major pans that have been knitted or crocheted directly to the shape used in the good, with no consideration being given to patch pockets, appliques, or the like. Minor cutting, trimming, or sewing of those major pans will not affect the determination of whether a good is "knit to shape." (4) Major parts. The term major pans means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar pans. In Scenarios #1 and #2, the front panel is considered to be a major pan of the good within the meaning of Section 102.21(b)(4). However, we consider the cutting of front panels to shape the neckline, along a line of demarcation, to be more than minor cutting. As such, the front panels are not considered to be knit to shape. Paragraph (c)(1) states that "The country of origin of a textile or apparel product is the single country, territory, or insular possession in which the good was wholly obtained or produced." As the subject merchandise is not wholly obtained or produced in a single country, territory or insular possession, paragraph (c)(1) of Section 102.21 is inapplicable. Paragraph (c)(2) states that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section." Paragraph (e) states that "the following rules shall apply for purposes of determining the country of origin of a textile or apparel product under paragraph (c)(2) of this section:" 6101-6117 If the good is not knit to shape and consists of two or more component pans, a change to an assembled good of heading 6101 through 6117 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory or insular possession. If the good is knit to shape, a change to heading 6101 through 6117 from any heading outside that group, provided that the knit-to-shape components are knit in a single country, territory, or insular possession. The subject merchandise is classifiable as men's knit pullovers in heading 6110, HTSUSA. Section 102.21(e) requires a tariff shift to headings 6101 through 6117 from any heading outside the specified headings. In this case, a tariff shift to heading 6110, HTSUSA, occurs in "Country B," but from components that are classifiable in heading 6117, HTSUSA. As heading 6117, HTSUSA, is excepted by Section 102.21(c)(2), the tariff shift is not applicable.  Section 102.21(c)(3) applies where the country of origin of a textile or apparel product cannot be determined pursuant to paragraph (c)(1) or (c)(2) and where the merchandise consists of either a good that was knit to shape or (with an exception for goods of certain specifically enumerated headings), was wholly assembled in a single country, territory, or insular possession. Section 102.21 (c)(3)(i) provides the following: If the good was knit to shape, the country of origin of the good is the single country, territory, or insular possession in which the good was knit; ... Headquarters Ruling (HQ) 959484, dated October 3, 1996, is applicable to the subject case. In HQ 959484, it was determined that "Country A" was the country of origin for a woman's knit cardigan sweater where a rib back panel, rib sleeve panels, rib neck and waistband are knit in "Country A" and in "Country B" a zipper is formed, front panel is knit with line of demarcation, armholes and neck are shaped by cutting front panel, the front panel is cut along the line of demarcation to form two front panels, and components are linked into a finished sweater. In that ruling, Customs took the position that the back panel and sleeves are major pans that have been knit directly to the shape used in the good and they comprise over 50 percent of the exterior surface of the garment. Therefore, it was determined that the sweater had met the definition of "knit to shape" pursuant to Section 102.21(b)(3). It is our determination that the back panel and sleeves are major parts that have been knit directly to the shape used in the good and they comprise over 50 percent of the exterior surface of the garment. In Scenarios #1 and #2, the major parts were knit in "Country A." Therefore, the instant sweater is still considered to be knit to shape as the term is defined above. Accordingly, Section 102.21(c)(3) is applicable to the subject merchandise because in each instance, the back panel and two sleeve panels are knit in "Country A." Thus, the country of origin for the sweater in both Scenarios #1 and #2 is the single country in which the good was knit to shape, that is, "Country A." HOLDING: The country of origin of the sweater in Scenario #1 is "Country A." The country of origin of the sweater in Scenario #2 is "Country A." 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 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 the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.  Should it be subsequently 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. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 C.F.R. 177.2. Sincerely, John Durant, Director Commercial Rulings Division