MAR-2-05 CO:R:C:V 734526 KR
Anna Fu, President
Rotex Sportswear Inc.
50 W. 34th Street Rm. 3B2
New York, NY 10118
RE: Country of origin marking of imported men's swim wear;
substantial transformation; 19 CFR 12.130
Dear Ms. Fu:
This is in response to your letter dated January 23, 1992,
and forwarded to Headquarters on February 24, 1992, and received
February 26, 1992, on behalf of Rotex Sportswear Inc., requesting
a ruling on the country of origin of imported men's swim wear. A
sample of a finished swim trunk, style number 2929, was submitted
for examination. This ruling will apply only to swim wear matching
the sample submitted with this request for ruling.
FACTS:
You stated that Rotex intends to import swim trunks, style
2929, which are made from material produced in China then shipped
to Chile for further processing. There are two different
production scenarios. In both cases the parts sent from China to
Chile are: draw strings, elastic, thread, poly bags, tissue paper,
hangers, name labels, care/size labels, hang tags, twill tape and
Velcro. In case one China supplies 100% nylon taslon shell fabric
and 100% polyester mesh liner fabric to Chile. There are no
cutting lines on the fabric. In Chile the fabric is cut, sewn,
assembled, screen printed with a logo, trimmed ironed, folded and
packed into cartons supplied by Chile.
In case two the fabric and the liner are cut to shape in China
prior to being sent to Chile. The screen printing of a logo also
takes place in China. In Chile the pre-cut pieces are sewn,
assembled, trimmed, ironed, folded, and packed in cartons supplied
by Chile.
ISSUE:
What is the country of origin of the imported swim wear as
processed in each of the two cases.
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 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 for 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:
(i) Dyeing of fabric and printing when accompanied by
two or more of the following 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.
Section 12.130(e)(1) of the Customs Regulations describes
manufacturing or processing operations from which an article will
usually be considered a product of the country in which those
operations occurred. Sections 12.130(e)(1)(v) provides that an
article or material usually will be a product of a particular
country when it has undergone:
Substantial assembly by sewing and/or tailoring of all
cut pieces of apparel articles which have been cut from
fabric in another foreign territory or country, or
insular possession, into a completed garment (e.g. the
complete assembly and tailoring of all cut pieces of
suit-type jackets, suits and shirts).
In general, Customs has stated that "cutting garment parts
from fabric will result in a substantial transformation of the
fabric." T.D. 85-38, 19 Cust. Bull. 58, 67 (1985). See HQ 734405
(April 3, 1992); HQ 734215 (November 13, 1991). Generally, the
country of assembly after the fabric is cut is not the country of
origin, but the country of origin remains where the fabric is cut.
HQ 734405 (April 3, 1992); C.S.D. 90-19; C.S.D. 90-20. See HQ
731028 (July 18, 1988); HQ 731306 (July 17, 1989); HQ 732485
(January 18, 1990); HQ 556070 (July 1, 1991).
Customs has long held that the mere assembly of goods,
entailing simple combining operations, trimming or joining together
by sewing is not enough to substantially transform the components
of an article into a new and different article of commerce. See
HQ 086696 (June 8, 1990); HQ 088283 (February 28, 1991); HQ 089539
(April 22, 1992). Customs held this applied specifically to men's
swim shorts in HQ 734019 (June 18, 1991). In that case, Customs
determined that the sewing of 17 components to form swimming shorts
was not a substantial transformation and that the country of origin
was where the fabric was made and cut.
Because the article in question is a textile product subject
to section 204 of the Agricultural Act of 1956, as amended, (7
U.S.C. 1854), 19 CFR 12.130 is applicable.
In case one, the fabric is cut and assembled in Chile. This
constitutes a substantial transformation. Therefore, the country
of origin of the swim wear in case one is Chile. In case two, no
information was submitted detailing the number of pieces, the time
it takes to assemble them, the difficulty in assembling the pieces,
the training required to assemble the pieces, etc. Based on a
sample of the product, case two appears to be a simple assembly
operation. Because the fabric is pre-cut and undergoes only a
simple assembly in case two, there is no substantial transformation
and the country of origin remains China. See HQ 734019 (June 18,
1991).
HOLDING:
Pursuant to 19 CFR 12.130, there is a substantial
transformation of the item in case one and the country of origin
of the men's swim wear is Chile. However, in case two, the item
undergoes a simple assembly and the country of origin remains
China.
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 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 177.2, Customs Regulations (19 CFR
177.2).
Sincerely,
John Durant, Director
Commercial Rulings Division