MAR-2-05 CO:R:C:V 731028 jd

Andrew P. Vance, Esq.
Barnes, Richardson & Colburn
475 Park Avenue South
New York, New York 10016

RE: Country of origin marking requirements for wearing apparel manufactured in the Commonwealth of Northern Mariana Islands

Dear Mr. Vance:

This is in reply to your letter of February 2, 1988, requesting a ruling on the country of origin marking requirements for wearing apparel to be manufactured in the Commonwealth of Northern Mariana Islands, also referred to as Saipan.

FACTS:

According to your submission, which incorporates by reference a letter to the Federal Trade Commission dated February 1, 1988, foreign origin fabric will be imported in the piece into Saipan where it will be cut to shape and size, assembled and sewn, and then exported to the U.S.

You have inquired as to what marking requirements, if any, of 19 U.S.C. 1304 are applicable to such importations. You are aware of Federal Trade Commission jurisdiction over certain markings contemplated for such importations, e.g., "Made in U.S.A. of imported fabric", and you have supplied us with a copy of the response you received from the FTC.

ISSUE:

Do the country of origin marking requirements of 19 U.S.C. 1304 apply to wearing apparel manufactured in the Commonwealth of Northern Mariana Islands (Saipan)?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate the foreign origin of the article.

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Section 134.1(c), Customs Regulations (19 CFR 134.1(c)), defines "foreign origin" as "a country of origin other than the United States, as defined in paragraph (e) of this section, or its possessions and territories." Section 134.32(l), Customs Regulations (19 CFR 134.32(l)), specifically excludes from the marking requirements of 19 U.S.C. 1304 those articles which are "products of possessions of the United States."

Further, { 12.130, Customs Regulations (19 CFR 12.130), requires that the standard of substantial transformation govern the determination of the country of origin where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory, country, or insular possession where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing operations.

You indicate that foreign piece goods will be imported into Saipan and there cut and made into articles of apparel. Without samples of the merchandise as it enters and as it leaves Saipan, we are unable to definitively rule on whether the piece goods have undergone a change in the country of origin. However, your attention is directed to { 12.130 (e)(iv), Customs Regulations (19 CFR 12.130 (e)(iv)), which states that the cutting of fabric into parts and the assembly of those parts into the completed article will usually result in the processing country being the country of origin. In addition, Customs has held that the cutting of fabric (which contains no indication of where that fabric is to be cut) into garment parts constitutes a substantial transformation of the fabric and the parts become a product of the country where the fabric is cut.

Therefore, if the fabric imported into Saipan is not marked in any way for cutting, the resulting garments will be products of Saipan.

Commencing on July 18, 1947, the U.S. became the administering authority of the Trust Territory of the Pacific Islands, an area including the Northern Mariana Islands (Trusteeship Agreement, 61 Stat. 3301, T.I.A.S. No. 1665, 8 U.N.T.S. 189). In accordance with provisions of the trust agreement to promote self-government for the peoples of the trust territory, on March 24, 1976, the U.S. signed a Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States, Pub. L. 94-241, 90 Stat. 263. That covenant became fully effective as of November 4, 1986 and replaced the trusteeship agreement (see Presidential Proclamation 5564 of November 3, 1986 and E.O. 12572 of November 3, 1986).

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Article 6 of the Covenant, { 603(c), provides that "Imports from the Northern Mariana Islands into the customs territory of the United States will be subject to the same treatment as imports from Guam into the customs territory of the United States."

Customs has previously ruled that products of Guam are excepted from country of origin marking requirements under { 134.32(l), Customs Regulations (19 CFR 134.32(l)), as products of possessions of the U.S. (725787 HL; July 25, 1984). In regards to the Northern Mariana Islands, "Customs treats the Northern Mariana Islands as a territory or possession of the United States and products therefrom would be excluded from the country of origin marking requirements" (729704 km; September 12, 1986).

The Federal Trade Commission, pursuant to rules and regulations issued under the authority of the Textile Fiber Products Identification Act, stated in a staff opinion letter that garments made in Saipan of imported fabric should be labeled "Made in USA of Imported Fabric" (FTC letter to Andrew P. Vance, Esq., dated February 26, 1988).

HOLDING:

Wearing apparel that is a product of the Northern Mariana Islands is exempt from the country of origin marking requirements of 19 U.S.C. 1304 upon importation into the U.S., but must be marked in accord with the FTC requirements noted above.

Sincerely,

John Durant, Director
Commercial Rulings Division

1cc: CO:R:C:V:JDOYLE:LDC:7/7/88

Andrew P. Vance, Esq.
Barnes, Richardson & Colburn
475 Park Avenue South
New York, New York 10016