HQ 956494: Country of origin of knit sweaters; 19 CFR 12.130, CustomsRegulations

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 956494

                        September 19, 1994

CLA-2  CO:R:C:T 956494 CAB

CATEGORY:  Classification

Mr. Josefa M. Dizon
Embassy of the Philippines
Office of the Commercial Counselor
1600 Massachusetts Ave., N.W.
Washington, D.C. 20036

RE:  Country of origin of knit sweaters; 19 CFR 12.130, Customs
Regulations

Dear Mr. Dizon:

     This is in response to your request for a country of origin
determination on May 18, 1994, concerning sweaters.  Your request
is on behalf of Redson Textile Manufacturing Company.  No sample
was submitted for examination.

FACTS:

     The merchandise at issue is a knit sweater.  The manufacturing
process is as follows:  The importer will import yarn from Country
"A" to the Philippines which is referred to as Country "B".  In the
Philippines, the yarn is knitted into sweater panel pieces.  Once
the panels are completed, they are sent to China which is referred
to as Country "C", where these components are linked and finished
resulting in a finished sweater.  

ISSUE:

     What is the country of origin of the merchandise in question?

LAW AND ANALYSIS:

     Country of origin determinations for textile products are
subject to Section 12.130, Customs Regulations (19 CFR 12.130). 
Section 12.130 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), Customs Regulations, sets forth criteria
for determining whether a substantial transformation of a textile
product has taken place.  This regulation states 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), Customs Regulations, 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), Customs Regulations, states that for
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
operation;

     (iii)     The complexity of the manufacturing or processing
operation;

     (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

     Section 12.130(e)(1), Customs Regulations, 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, the following:

                          *     *     *

     (iii)  Weaving, knitting or otherwise forming fabric;


                          *     *     *

     Section 12.130(e)(2), Customs Regulations, states an article
or material usually will not be considered to be a product of a
particular foreign territory or country, or insular possession of
the U.S. by virtue of merely having undergone any of the following:

     
     (iii)  Trimming and/or joining together by sewing, looping,
     linking, or other means of attaching otherwise completed knit-
     to-shape component parts produced in a single country, even
     when accompanied by other processes (e.g. washing, drying,
     mending, etc.) normally incident to the assembly process; 

                          *     *     *

     The linking together of the knit-to-shape components parts in
China (Country C), falls squarely in 12.130(e)(2)(iii) as an
operation that does not confer origin.  Knitting fabric into
sweater panels, however, does transform the yarn into a new and
different article of commerce.  Thus, the processing in the
Philippines (Country B) does amount to the complex manufacturing
operation necessary to substantially transform an article in
accordance with Section 12.130(e)(1)(iii).  As the linking and
finishing operation in China (Country C) is a simple combining
operation that does not constitute a substantial manufacturing
operation, the processing in the Philippines is considered to be
the last substantial transformation that the merchandise undergoes. 
Therefore, the country of origin of the subject merchandise is the
Philippines.

HOLDING:

     The country of origin of the sweater at issue is the
Philippines.

     This ruling is issued pursuant to the provisions of Part 177
Customs Regulations (19 CFR Part 177).  The holding in this ruling
only applies to the specific factual situation presented and the
merchandise identified in the ruling request.  If the information
furnished is not accurate or complete, or there is a change in the
factual situation, this ruling will no longer be valid.  In such an
event, a new ruling request should be submitted.

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division