CLA-2 RR:TC:TE 959484 NLP

Ms. Diane L. Weinberg
Sandler, Travis & Rosenberg
505 Park Avenue
New York, New York 10022-1106

RE: Country of origin determination for a women's knit cardigan; knit-to-shape good; 19 CFR 102.21(c)(3); 102.21(b)(3) and (4)

Dear Ms. Weinberg:

This is in response to your letter of July 15, 1996, on behalf of your client, Peninsula Knitters Ltd., requesting a country of origin determination for a women's sweater pursuant to Section 102.21, Customs Regulations. Samples of the sweater's components and the finished sweater were submitted for our examination and will be returned to you under separate cover.

FACTS:

The article at issue is a women's 100 percent merino wool knitted cardigan sweater. Two manufacturing scenarios were presented and they are as follows:

Scenario #1

Country A All pieces are knit: front panel, rib back panel, rib sleeve panels, rib neck and waistband

Country B

Zipper is formed Armholes and neck are shaped by cutting the front panel Front panel is cut along the line of demarcation to form two front panels Components are linked into a finished sweater

Scenario #2

Country A

Rib back panel, rib sleeve panels, rib neck and the waistband are knit Country B

Zipper is formed Front panel is knit with line of demarcation Armholes and neck are shaped by cutting the front panel Front panel is cut along the line of demarcation to form two front panels Components are linked into a finished sweater

ISSUE:

What is the country of origin of the subject sweater?

LAW AND ANALYSIS:

Pursuant to Section 334 of the Uruguay Round Agreements Act (codified at 19 USC 3592), new rules of origin were effective on textile products entered, or withdrawn from warehouse, for consumption on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs Regulations (19 CFR Section 102.21), sets forth the general rules to determine country of origin. Thus, the country of origin of a textile product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product 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, Section 102.21(c)(1) is inapplicable.

Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under Section 102.21(c)(1). Section 102.21(c)(2) provides, in pertinent part:

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.

Section 102.21(e) provides, in pertinent part:

6101-6117 (3) 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.

Pursuant to 102.21(b)(3), the term "Knit to shape" is defined as follows:

The term knit to shape applies to any good of which 50 percent or more of the exterior surface area is formed by major parts that have been knitted or crocheted 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 parts will not affect the determination of whether a good is "knit to shape." Section 102.21(b)(4) defines the term "major parts" as follows: The term major parts means integral components of a good but does not include collars, cuffs, waistbands, plackets, pockets, linings, paddings, trim, accessories, or similar parts.

The subject merchandise is classifiable as a woman's knit sweater in heading 6110, Harmonized Tariff Schedule of the United States (HTSUS). In your submission, you state that the sweater meets the definition of knit to shape and that the cutting of the armholes and neck shape from the front panel constitutes minor cutting. In support of this position you cite Headquarters Ruling Letter (HRL) 082369, dated January 24, 1989, which dealt with the country of origin of knit sweaters. This ruling is not applicable to the instant case as it was decided pursuant to 19 CFR 12.130, which is no longer in effect for determining the country of origin of textile articles. It is our position that the cutting of the armholes and neck shape from the front panel is more than minor cutting and, as a result, the front panel is not considered to be knit to shape.

You next argue that even if the front panel is not considered to be knit to shape because of the cutting performed in Country B, the garment is considered to be knit to shape because over 50 percent of the exterior surface area is formed by major parts that have been knitted directly to the shape used in the good. The back panel and the two sleeves are major parts that have been knitted or crocheted directly to the shape used in the good and they constitute over 50 percent of the exterior surface of the garment.

It is our position 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. Therefore, the instant sweater is considered to be knit to shape as the term is defined above.

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, HTSUS, occurs in Country B, but from components that are classifiable in heading 6117, HTSUS. As heading 6117, HTSUS, 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;...

In Scenario #1, the back panel and sleeves, which are knit in a single country, qualify the sweater as a knit to shape good. Accordingly, the country of origin of the sweater is the single country in which the good was knit to shape, that is, Country A.

Section 102.21(c)(3) is also applicable to the sweater in the second manufacturing scenario. While the front panel is knit in a second country, the cutting performed on this panel is not considered minor. Therefore, this panel is not considered to be knit to shape. As stated above, the back panel and sleeves, which are knit in a single country, qualify the sweater as a knit to shape good. Thus, pursuant to section 102.21(c)(3), the country of origin for the sweater in scenario #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
Tariff Classification Appeals
Division