CLA-2 CO:R:C:T 953708 SK
TARIFF NO.'S: 6110.20.2075; 6104.62.2025
Natouchka Patrice Rampy
Sharretts, Paley, Carter & Blauvelt, P.C.
67 Broad Street
New York, N.Y. 10004
RE: Classification of girls' knit top: 6110.20.2075; sweaters,
pullovers and similar articles; classification of girls' knit
pants; 6104.62.2025; trousers; country of origin; 19 CFR
12.130(b)(d)(e); substantial transformation occurs in country
where substantial manufacturing processes take place and where a
new and different article of commerce is created.
Dear Ms. Rampy:
This is in response to your letter, dated March 11, 1993, on
behalf of your client, Celebrity International, Inc., requesting
a binding classification ruling and a country of origin
determination for girls' tops and pants. You have submitted a
sample of the completed top and pant for our examination and they
will be returned to you under separate cover.
FACTS:
The girls' top at issue is constructed of a knit fabric made
from 60 percent cotton and 40 percent polyester. The top is a
tee style shirt with extensive front applique work and a ribbed
crew-neck collar. The matching full-length pants feature a
flower pattern designed to match the flower applique design on
the front of the top. The pants have an elasticized waistband.
The fabric for these garments is knit in China. The front
shirt panel and applique work are produced in China. The front
appliqued shirt panel, the fabric required to complete the shirt,
and the pants fabric are shipped to St. Lucia. In St. Lucia, the
fabric required to complete the shirt is cut and the shirt is
assembled. It is also in St. Lucia that the pants fabric is cut
and the pants are assembled.
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You state in your submission that the cost of cutting the
front shirt panels in China will be approximately $1.50 per dozen
and the cost of sewing the appliques onto the front panels will
be approximately $3.00 per dozen. The cost of completing the
shirt in St. Lucia will be approximately $8.00 per dozen. The
cost of processing the pants in St. Lucia will be approximately
$18.50 per dozen.
The time required for the manufacturing operations in China
is three days. The time required for the manufacturing
operations in St. Lucia is four weeks. These costs and
processing times do not include the cost and time required to
knit the fabric in China.
ISSUES:
What is the proper classification for these garments?
Are the articles at issue products of China or St. Lucia for
purposes of determining country of origin?
LAW AND ANALYSIS:
- CLASSIFICATION -
Classification of merchandise under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification shall be determined according
to the terms of the headings and any relative section or chapter
notes.
The girls' top at issue features extensive applique work on
its front panel. In Headquarters Ruling Letter (HRL) 087211,
dated October 9, 1990, Customs held that applique work was among
the features which would preclude classification as a T-shirt or
as a garment similar to a T-shirt. Accordingly, it is our
position that the girls' top is classifiable as a pullover under
heading 6110, HTSUSA, which provides for "sweaters, pullovers,
sweatshirts, waistcoats (vests) and similar articles, knitted or
crocheted."
As the garment which is intended to cover the lower half of
the torso fits the commercial definition of trousers, i.e.,
outerwear garments with leg separations, classification of this
garment falls under heading 6104, HTSUSA, which provides for, in
pertinent part, "women's or girls' trousers."
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- COUNTRY OF ORIGIN -
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. The criteria set forth in this
regulation are not exhaustive; one or any combination of these
factors 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:
(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 States, it has undergone in that
foreign territory or country or insular possession, any of the
following:
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(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]
As stated above, an article will be deemed a product of a
particular country if, in that country, it undergoes a
substantial manufacturing operation or process and it thereby
becomes a new and different article of commerce. If these
criteria are met in a particular country the product is said to
have undergone substantial transformation and that country will
confer country of origin status to the subject merchandise for
purposes of 19 CFR 12.130 of the Customs Regulations.
Section 12.130(e)(1)(iv)(v) states that for purposes of
determining country of origin, an article usually will be a
product of a particular foreign country where it has undergone
"cutting of fabric and the assembly of these parts into the
completed article," or "substantial assembly by sewing ... of all
cut parts." In the instant case, these criteria are satisfied in
St. Lucia; it is in this country that most of the cutting for the
garments takes place (with the exception of the front shirt
panel) and it is here that all of the cut parts are sewn and
assembled into completed articles. Accordingly, application of
this section of the Federal Regulations to the manufacturing
scenario in the instant case leads to the conclusion that the
country of origin of the garments at issue is St. Lucia.
The cost/labor figures you submitted to this office also
support this finding. You estimate that the cost of cutting the
shirt fabric for the front panels and sewing on the appliques in
China costs a total of approximately $4.50 per dozen. The cost
of cutting the sleeves and rear panels of the tops, and sewing
the tops of the completed tops in St. Lucia, is approximately
$8.00 per dozen. The only cost incurred in China for the
manufacture of the pants is in the knitting of the fabric. You
did not supply this office with any information as to the cost
involved in this procedure. The cost of cutting the fabric for
the pants in St. Lucia, and sewing them, is approximately $18.50.
The total costs incurred in China for the production of the tops
and pants (not including the cost of knitting the fabric) is
$4.50. The total costs incurred in St. Lucia for the production
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of these garments is $26.50. The value added to the garments in
St. Lucia is significantly greater than the value imparted to
these garments in China.
You further submit that the time involved in performing
various manufacturing operations on 5,000 dozen tops and pants in
China is three days. By contrast, these garments undergo
processing in St. Lucia which takes four weeks until the garments
are completed. The amount of processing time that these garments
undergo in St. Lucia is significantly greater than the amount of
time these goods are processed in China.
The garments at issue undergo substantial manufacturing
operations in St. Lucia and therefore our final inquiry is
whether the subject merchandise becomes new and different
articles of commerce in that country. At the time of export from
China, the subject merchandise consists of bolts of fabric and
single cut panels with applique work affixed to them. In St.
Lucia, the single pre-cut panels and the bolts of fabric are
transformed into girls' tops and pants and thereby become new and
different articles of commerce. It is assumed for purposes of
this ruling that the fabric exported from China to St. Lucia does
not contain cutting lines of demarcation.
As the garments at issue undergo substantial manufacturing
in St. Lucia, and become new and different articles of commerce
in that country, this office is of the opinion that St. Lucia is
the country of origin of the subject merchandise; this is the
country where most of the value is added to these goods, where
the processing operations are significantly more labor intensive
than the work performed in China, and where the fabric is
transformed into completely assembled girls' garments.
HOLDING:
The country of origin for the girls' top and pants is St.
Lucia.
The top is classifiable under subheading 6110.20.2075,
HTSUSA, which provides for "sweaters, pullovers, sweatshirts,
waistcoats (vests) and similar articles, knitted or crocheted: of
cotton: other... other: other: women's or girls'," dutiable at a
rate of 20.7 percent ad valorem. The applicable textile quota
category is 339.
The pants are classifiable under subheading 6104.62.2025,
HTSUSA, which provides for "women's or girls' suits, skirts,
trousers, bib and brace overalls, breeches and shorts (other than
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swimwear), knitted or crocheted: trousers: of cotton: other:
trousers and breeches: girls': other," dutiable at a rate of 16.7
percent ad valorem. The applicable textile quota category is
348.
The designated textile and apparel categories may be
subdivided into parts. If so, the visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available we
suggest your client check, close to the time of shipment, the
Status Report on Current Import Quotas (Restraint Levels), an
internal issuance of the U.S. Customs Service which is updated
weekly and is available for inspection at the local Customs
office.
Due to the nature of the statistical annotation (the ninth
and tenth digits of the classification) and the restraint
(quota/visa) categories, your client should contact his local
Customs office prior to importation of this merchandise to
determine the current status of any import restraints or
requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division