CLA-2 CO:R:C:T 952503 HP
Ms. Mary Jo Muoio
Vice President
Wolf D. Barth Co., Inc.
90 West Street
New York, NY 10006
RE: Country of origin of sweaters from Korea, China and the
Solomon Islands.
Dear Ms. Muoio:
This is in reply to your letter of July 24, 1992, in which
you requested a country of origin determination for sweaters
imported into the United States. This letter will address the
quota/visa and marking implications of our findings. Please
reference your client Golden Touch, IRS No. 13-2815248-00.
FACTS:
The merchandise at issue consists of a women~s hand knit
sweater, 55% ramie, 45% acrylic, of single dyed yarn. When
completed it will be a long sleeved pullover with either a crew
neck, mock turtleneck or a V-neck. The back and sleeve samples
provided are constructed of a plain, jersey stitch, while the
front has hand embroidery and intarsia constructions. The front
also uses yarns of different dyes and has, therefore, an eye
catching effect.
One hundred percent of the yarn is obtained from Korea.
From there, the yarns for the sleeves, back and rib panels are
exported to the Solomon Islands. The yarn for the front panels
is exported to China, where the panels are knit to shape and then
exported to the Solomon Islands. In the Solomon Islands, the
sleeves, back and ribs are knit to shape. The sweaters are
assembled and finished, and then packed and shipped to the United
States. Cost breakdowns submitted show that the Korean work
accounts for 46.8%, the Chinese work for 13.8%, and the Solomon
Islands work for 39.4% of the Golden Touch price.
ISSUE:
Whether the processing operations taking place in the
Solomon Islands substantially transform the Korean yarn and the
Chinese front panel into a sweater of the Solomon Islands?
LAW AND ANALYSIS:
Textile commodities produced in more than one foreign
country are subject to the country of origin requirements
delineated in section 12.130 of the Customs Regulations (19
C.F.R. 12.130). These regulations provide that:
... a textile product . . . which consists
of materials produced or derived from, or
processed in, more than one foreign . . .
country shall be a product of that foreign .
. . country where it last underwent a
substantial transformation.
12.130(b). A textile product undergoes a substantial
transformation when it is " . . . transformed by means of
substantial manufacturing or processing operations into a new
and different article of commerce."
Section 12.130 of the regulations outlines the criteria used
to determine the country of origin for textiles and textile
products. Specifically, this provision of the regulations is
considered in determining whether a textile product has undergone
substantial manufacturing or processing operations, and what
constitutes a new and different article of commerce. The factors
considered are not exhaustive. In fact, "one or any combination
of criteria may be determinative, and additional factors may be
considered." In determining whether merchandise has undergone
substantial manufacturing or processing operations, we consider
the (1) physical change in the material or the article; (2) time
involved; (3) complexity of the operations; (4) level or degree
of skill and/or technology required; and (5) value added to the
article in each country.
The article at issue last undergoes a substantial
transformation in the Solomon Islands. This "substantial
transformation" takes the form of extensive manufacturing and
processing operations that include all of the subject matter~s
assembly, finishing work and knitting, except the knitting of the
front panel. The article at issue has been subjected to
substantial processing in the Solomon Islands inasmuch as it is
here that the articles undergo a significant physical change into
a completely assembled sweater, and the costs involved in
knitting and assembling the back, sleeves and rib panels are
significantly higher than that of the front panel alone.
HOLDING:
As a result of the foregoing, the instant merchandise, for
purposes of Section 12.130, Customs Regulations, is a product of
the Solomon Islands.
The holding in this ruling 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 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 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 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. In such a case, it is recommended that a
new ruling request be submitted in accordance with 177.2,
Customs Regulations (19 C.F.R. 177.2).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director