MAR-2-05 CO:R:C:V 734197 AT
Alan D. Meltzer, Esq.
Coudert Brothers
200 Park Avenue
New York, New York 10166
RE: Country of origin marking of imported women's sweaters;
substantial transformation; 19 CFR 12.130
Dear Mr. Meltzer:
This is in response to your letter of May 24, 1991, on
behalf of your client, Ralph Lauren Womenswear, Inc. (Ralph
Lauren), requesting a ruling on the country of origin of imported
women's sweaters. Samples of the finished sweaters (Styles
27109, 37125 and 37126) as well as the components as they exist
at the conclusion of each major stage in the production process
were submitted for examination.
FACTS:
You state that Ralph Lauren intends to import three styles
(style Nos. 27109, 37125 and 37126) of women's long sleeve
pullover sweaters from Hong Kong. You also state that the
production of the sweaters will involve processing operations
performed in two countries, Hong Kong and China. According to
your letter the following operations will be performed to create
each of the finished sweaters. The major panels (front, back and
sleeves) for each sweater style will be machine-knit in Hong Kong
in a cable-knit pattern. The cuffs, waistband and collarband,
and, in the case of two of the styles (37125 and 37126), an
American flag pattern insert which forms a portion of the front
panel of each of these two styles, will first be hand-knit in
China and then exported to Hong Kong where they will be linked
and assembled with the major panels into the finished sweater.
You claim that the knitting of the major panels of the sweaters
and the complete assembly of the sweater panels in Hong Kong
constitutes a substantial transformation for country of origin
purposes and that the operations performed in China do not
constitute a substantial transformation of the sweaters. Based
on this you contend that the country of origin of the sweaters is
Hong Kong.
ISSUE:
What is the country of origin of the imported women's
sweaters processed in the manner described above?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides that, unless excepted, every article of
foreign origin imported into the U.S. 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 to the ultimate purchaser in the U.S. the
English name of the country of origin of the article.
Section 12.130, Customs Regulations (19 CFR 12.130), sets
forth the principles for marking country of origin determinations
for textile and textile products. 19 CFR 12.130(b), 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.
19 CFR 12.130(d) 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 or (iii) Commercial use.
Section 12.130(d)(2) 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 as a
result of the manufacturing or processing operations in each
foreign territory or country, or insular possession of the U.S.
(ii) The time involved in the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iii) The complexity of the manufacturing or processing
operations in each foreign territory or country, or insular
possession of the U.S.
(iv) The level or degree of skill and/or technology required
in the manufacturing or processing operations in each foreign
territory or country, or insular possession of the U.S.
(v) The value added to the article or material in each
foreign territory or country, or insular possession of the U.S.,
compared to its value when imported into the U.S.
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:
(iii) weaving, knitting or otherwise forming fabric.
In HQ 950287 (October 30, 1991), Customs ruled that women's
sweaters which were finished and assembled in Macau from machine-
knit component parts from Macau (back panel, sleeves and collar)
and a unspecified foreign country (front panel with flower leaf
pattern) last underwent a substantial transformation in Macau.
Customs stated that the sweater had been subjected to substantial
processing in Macau in that this was where the article underwent
a significant change into a completed assembled sweater and the
time involved in knitting and assembling the back, sleeves and
collar was significantly longer than that of processing the front
panel. Similarly, in this case, the subject sweaters last
undergo a substantial transformation in Hong Kong. This
substantial transformation takes the form of extensive
manufacturing and processing operations which include all of the
subject merchandise's assembly, finishing work and knitting,
except for the knitting in China of the cuffs, collarband,
waistband and in the case of style Nos. 37125 and 37126, the
American flag insert. The sweaters are all subjected to
substantial processing in Hong Kong inasmuch as it is here that
the major portions of the sweater are knit, and that the sweaters
undergo a significant physical change into a completely assembled
sweater.
HOLDING:
Pursuant to 19 CFR 12.130, the country of origin of these
women's long sleeve knitted pullover sweaters (Style Nos. 27109,
37125 and 37126) is Hong Kong.
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 of 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
Commercial Rulings Division