CLA-2 CO:R:C:G 086229 CRS
Martin J. Lewin, Esq.
Mudge Rose Guthrie Alexander & Ferdon
2121 K Street, N.W.
Washington, D.C. 20037
RE: Country of Origin of Cotton Work Gloves Sewn in Country B
from Parts Cut in Country A; Request for Reconsideration of
HRL 732623
Dear Mr. Lewin:
This is in response to your letter dated December 12, 1989,
on behalf of your client Saf-T-Gard International, Inc. (formerly
Latex Glove Co., Inc.), in which you requested reconsideration of
Headquarters Ruling Letter (HRL) 732623 dated November 6, 1989,
subsequently published as C.S.D. 90-20 (24 Cust. B. & Dec. 10
(March 7, 1990)), regarding imported cotton work gloves. Cut
pieces of an unassembled glove, a sample finished glove, and a
video tape of the assembly operation were submitted with your
request.
FACTS:
C.S.D. 90-20 concerned the country of origin marking of
cotton industrial work gloves. Glove fabric is purchased and
cut into pieces in country A. The cut pieces are then shipped to
country B for sewing, turning, pressing, matching into pairs,
packing and shipment to the United States. The gloves are
manufactured in two sizes: men's; and women's. In C.S.D. 90-20
it was held that country A was the country of origin of the
gloves; however, you believe the country of origin to be Country
B and have requested reconsideration.
You assert that whereas little skill is required to cut bulk
fabric into glove parts, the sewing of a completed glove involves
a high degree of skill. In support of this you state that the
cutting time for the clute pattern work gloves at issue is 0.0188
man-hours per dozen pairs and that the sewing time is 0.64 man-
hours per dozen pairs. Turning time for the gloves is 0.25 man-
hours per dozen pairs, while ironing and joining time consume an
additional 0.2833 man-hours per dozen pairs.
You describe the sewing operations performed in country B as
some of the most complex in the apparel trade. The clute pattern
glove at issue consists of five cut pieces of different sizes and
shape and requires six separate stitching operations. The five
seams are short and frequently curve and change direction.
Value added in country B exceeds that in country A. In your
original ruling request you estimated the value added in country
A to be $0.027 compared to a value added in country B of $0.293.
You also advise that sewing requires more training and greater
capital investment than does cutting.
ISSUE:
Whether the sewing and finishing in country B of fabric
parts cut in country A constitutes a substantial manufacturing or
processing operation such that the gloves in question will be
considered to be a product of country B.
LAW AND ANALYSIS:
Pursuant to section 12.130, Customs Regulations (19 CFR
12.130), a textile or textile product which consist of materials
produced or derived from, or processed in, more than one foreign
territory or country shall be a product of that foreign territory
or country where it last underwent a substantial transformation.
A textile or 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) establishes criteria for determining
whether an article has been substantially transformed. However,
the criteria set forth in 19 CFR 12.130(d) are not exhaustive;
one or any combination of these criteria may be determinative and
additional factors may be considered.
According to 19 CFR 12.130(d)(2), the following factors are
to be considered in determining whether merchandise has been
subjected to substantial manufacturing or processing operations:
the physical change in the material or article, the time involved
in the manufacturing or processing operations, the complexity of
the operations, the level or degree of skill and/or technology
required, and the value added to the article. In this regard you
state that the sewing operations performed on the gloves in
question are among the most complex in the apparel trade, that a
significantly greater investment of time and capital is required
in sewing the gloves as opposed to cutting them, and that sewing
demands a high degree of training and skill.
Section 12.130(e), Customs Regulations (19 CFR 12.130(e))
provides further guidance as to what constitutes substantial
manufacturing or processing operations. In particular, 19 CFR
12.130(e)(1)(v) provides that an article will usually be the
product of that country in which it has been sewn or tailored
from fabric pieces cut in another country, as for example, with
the complete assembly and tailoring of all cut pieces of suit-
type jackets, suits and shirts.
According to T.D. 85-38 (19 Cust. Bull. 58, 70), published
in the Federal Register on March 5, 1985, (50 FR 8714), which is
the final document rule establishing 19 CFR 12.130:
[T]he 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 cut the 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
12.130(d).
Thus when factual situations are not squarely within the
examples of section 12.130(e), an article's country of origin
will be decided in accordance with section 12.130 (d). Here, the
intricacy of the sewing operation is less than the complexity
involved in sewing a suit-type jacket, suit or shirt; therefore,
as the factual situation is not squarely within the examples of
section 12.130(e), country origin is determined by reference to
the criteria of section 12.130(d).
You have compared the gloves in question with those at issue
in Cardinal Glove v. United States, 4 C.I.T. 41 (1982), which
also concerned the country of origin of cotton work gloves.
However, the country of origin marking requirements embodied in
19 CFR 12.130 were issued subsequent to the decision in Cardinal
Glove. Although the gloves in Cardinal Glove were of simpler
construction than those now at issue, the fact that the gloves in
question are relatively more complex is not determinative. The
Regulations do not contemplate that all sewing operations will
constitute a substantial transformation, but only those where
there has been substantial sewing and/or tailoring. This is not
the case here.
In C.S.D. 90-19 (24 Cust. B. & Dec. 10 (March 7, 1990)), the
issue was the country of origin marking of sweatshirts. Fabric
was cut to shape in Korea, then exported to Jamaica for assembly
into finished sweatshirts. A total of twenty-eight manufacturing
operations were performed in Jamaica, including sixteen sewing
operations and one embroidery operation. The sweatshirts were
sewn on machines which cost $5,000; training costs were estimated
to be $20,000. Nevertheless, the sewing and assembly operations
were determined not to be substantial.
Similarly, in HRL 731036 of July 18, 1989, knit cotton
polo-style shirts were cut into twelve components in country A.
These were then sewn and finished in country B in a process
involving nineteen separate operations. The time required to sew
one dozen shirts was estimated to be 1.752 hours, compared to the
1.1733 hours needed to sew the work gloves in question. Four
different types of sewing machines were used. However, since
many of the operations involved limited skill and there was no
evidence that highly skilled or trained workers were required,
the country of origin was held to be country A.
The sewing together of industrial work gloves is not more
complex in nature than the assembly by sewing of sweatshirts and
polo-style shirts, indeed it is Customs' view that it is less so.
Moreover, the cutting of fabric into glove pieces is not without
complexity. Apparel cutters must also be skilled since mistakes
can be costly in terms of wasted fabric and can delay or prevent
a planned assembly run. See HRL 081155 dated February 3, 1988.
In addition, Customs is not persuaded that sewing cut pieces into
finished gloves is inherently complex. Although the purchase of
sewing machines may require a significant capital investment, the
operation of the machines involves little more than a steady
feeding of cut glove fabric into a machine. As a result, it
remains Customs' view that the gloves have not been substantially
transformed.
HOLDING:
The country of origin of the industrial work gloves at issue
is country A. The sewing and assembly operations performed in
country B do not constitute a substantial transformation as
required by 19 CFR 12.130.
The video tapes submitted in connection with your request
are being returned under separate cover.
Sincerely,
Jerry Laderberg, Acting Director
Commercial Rulings Division