CLA-2 CO:R:C:T 953489 SK

Stanley Yeung
Value Garment Manufacturing Co. Pte. Ltd.
16 New Industrial Road
Singapore 1953

RE: Country of origin determination; 19 CFR 12.130; simple assembly is not a substantial manufacturing operation and does not constitute substantial transformation; country of origin is where fabric is cut.

Dear Mr. Yeung:

This is in reply to your letter of February 24, 1993, in which you requested that this office make a country of origin determination for two styles of skirts which undergo processing in Hong Kong, Singapore and Indonesia. Our analysis follows.

FACTS:

Two styles of denim skirts are at issue; they are referenced Style 4710007 and Style 6918. The denim fabric for both styles of skirt is woven in Hong Kong. The fabric is sent to Singapore where it is marked and cut. The piece goods are then sent to Indonesia where various manufacturing operations take place which, according to your submission, range in complexity from "simple" to "fair", with only one operation designated as "complex." The "simple" operations consist of fusing, joining and pressing waistbands, making darts, attaching labels, overlocking zipper facings and bartacking front pocket ends. The operations designated as fairly complex include overlocking, joining and sewing the two front and two back panels, sewing and attaching belt loops onto cut panels, attaching and sewing zippers onto left front panels and making pleats at the two front panels. The one operation listed as "complex" consists of attaching and sewing two front pockets. These component pieces are then sent back to Singapore where the rest of the assembly takes place. In your submission, you have designated half of the total number of operations performed in Singapore as either "complex" or "highly complex." These operations include joining panels together, attaching zippers to the right front panels,

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inserting elastic in waistbands, making button holes, processing the garments with chemical sand wash, and pressing, inspecting and packing the garments.

You have provided this office with a labor/cost breakdown for the operations that take place in Singapore and Indonesia. This breakdown rates the complexity of the operations, the level of technical skill required and the percentage of the total manufacturing costs that are incurred in each country.

Both styles of skirt undergo very similar manufacturing operations in Singapore and Indonesia and any differences do not affect the country of origin determination.

ISSUE:

What is the country of origin for the garments at issue?

LAW AND ANALYSIS:

Country of origin determinations are made pursuant to Section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) of the Customs Regulations 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) of the Customs Regulations sets forth criteria in determining whether a substantial transformation of a textile product has taken place. This regulation states that 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) 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; (iii) Commercial use.

Section 12.130(d)(2) of the Customs Regulations states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

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(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 and/or technology required in the manufacturing or processing operations; (v) The value added to the article or material; [emphasis added] Section 12.130(e)(1) provides that an article or material usually will be a product of a particular foreign territory or country, or insular possession of the United States when, prior to importation into the United State, it has undergone in that foreign territory or country or insular possession, any of the following:

(i) Dyeing of fabric and printing when accompanied by two or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing; (ii) Spinning fibers into yarn; (iii) Weaving, knitting or otherwise forming fabric; (iv) Cutting of fabric into parts and the assembly of those parts into the completed article; or (v) substantial assembly by sewing and/or tailoring of all cut pieces ... [emphasis added]

Section 12.130(e)(1)(iv) states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts into the completed article has occured in that country. In the instant case, the fabric is cut in Singapore and, after some assembly work in Indonesia which you describe as simple or only fairly complex, the pieces are returned to Singapore where they undergo more complicated operations which complete the garments. Accordingly, as per Section 12.130(e)(1)(iv) of the Customs Regulations, the skirts at issue are a product of Singapore as this is where the fabric is cut and where the fabric parts are assembled into completed skirts.

We further note that an analysis of the cost/labor breakdown statistics you submitted supports this holding and indicates that the preponderance of the total cost involved in the manufacture of these skirts is incurred in Singapore; it is in Singapore that the majority of the complex assembly operations take place and it is here that over 70 percent of the total cost of manufacturing these garments is incurred.

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HOLDING:

The counntry of origin of Style 4710007 and Style 69918 is Singapore.

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 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