HQ 956648: Country of origin of men's lined jackets, assembled in country B from pieces of fabric produced, cut and made up in country A; substantial assembly; minor subassembly; substantial transformation; 19 CFR 12.130; HRLs 953649, 954448, 952774 and 952639

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 956648

                          July 22, 1994

CLA-2 CO:R:C:T 956648  NLP

CATEGORY: Classification

Y.C. Ko, President
Kingtex Garment Mfg. Co., Ltd.
No. 270 Nanking E. Rd. Sec. 3
Taipei, Taiwan,  R.O.C.

RE:  Country of origin of men's lined jackets, assembled in      
country B from pieces of fabric produced, cut and made up in
     country A; substantial assembly; minor subassembly;
     substantial transformation; 19 CFR 12.130; HRLs 953649,
     954448, 952774 and 952639

Dear Mr. Ko:

     This is in response to your letter dated January 21, 1994,
requesting a ruling on the country of origin of two styles of men's
jackets.  In addition, pursuant to our request for more
information, you FAXED us a letter dated June 20, 1994.  Samples
of the finished jackets and cut pieces that are assembled to make
them were submitted for our examination.  

FACTS:

     The garments at issue are two styles of men's jackets with
warmers.  According to the information you submitted, the following
processes occur in country A for jacket style #92103:
1) weaving fabric of various materials, including polyester/
cotton, nylon taffeta, blended wool, polyester/olefin filler;
2) fabric selection, designing, making the patterns and marking
the fabrics, grading and sampling; 3) cutting the fabric into 119
pieces, including the collar, front and back panels, yokes,
pockets, sleeves, cuffs, lining and warmer; 4) making up the
collar; 5) making up the front plackets; 6) making up the flaps; 
7) making up the cuffs; 8) making up the sleeve applique; 9) making
up the hood; and 10) making up the warmer quilting.

     The made up components and the remaining cut pieces are
shipped to country B where the complete assembly by sewing of all
components and pieces into the completed jacket is performed.  The
finished jacket is then pressed and packaged for shipment to the
U.S.

     According to the information you submitted, the following
processes occur in country A for jacket style #92105: 1) weaving 
fabric of various materials, including polyester/cotton, nylon 
taffeta, blended wool, polyester/olefin filler; 2) fabric
selection, designing, making the patterns and marking the fabrics,
grading and sampling; 3) cutting the fabric into 94 pieces,
including the collar, front and back panels, yokes, pockets,
sleeves, cuffs, lining and warmer; 4) making up the  front
plackets; 5) making up the flaps; 6) making up the collar; and 7)
making up the loop, gusset pocket and hood; and 8) making up the
warmer quilting.  

     The made up components and remaining cut pieces are shipped
to country B where the complete assembly by sewing of all
components and pieces into the finished jacket is performed.  The
finished jacket is then pressed and packaged for shipment to the
U.S.

ISSUE:

     What is the country of origin for the two styles of men's
jackets with warmers?

LAW AND ANALYSIS:
 
     Country of origin determinations for textile products are
subject to Section 12.130 of the Customs Regulations (19 CFR
12.130).  Section 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 or 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) of the Customs Regulations 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) of the 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) of the Customs Regulations 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 onto the U.S.

     Section 12.130(e) of the Customs Regulations sets forth
criteria which aid us in determining whether an article has been
subjected to certain manufacturing or processing operations which
serve to substantially transform an article into a new and
different article of commerce.  Specifically, Section
12.130(e)(1)(v) is relevant in the instant case.  This Section
provides that:

          An article or material usually will be a product of a
     particular foreign territory or country, or insular    
possession of the U.S., when it has undergone prior to      
importation into the U.S. in that foreign territory or      
country, or insular possession any of the following:

          *         *         *         *         *

          (v)  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.)

     We have previously held that cutting of fabric into pattern
pieces constitutes a substantial transformation of the fabric,
resulting in the apparel pieces becoming a product of the country
where the fabric is cut.  See, Headquarters Ruling Letter (HRL)
086696, dated June 8, 1990, HRL 082924, dated March 26, 1990, HRL
085611, dated January 17, 1990, HRL 951426, dated April 8, 1992.
Thus, in the instant case, the cutting operation performed in
country A entitles the cut pieces and made up components there
produced to be considered a product of country A.  In order for
the finished jackets to be considered products of country B, the
assembly operation performed in that country must be substantial.
     
     In certain country of origin cases, when determining where a
substantial transformation has occurred, we have had to address
the situation where there is a sub-assembly of component parts in
country A and the complete assembly of all the component parts in
country B.  Previously, we have held that any subassembly (of
pieces cut in country A) taking place in country A, resulting in
the assembly by sewing of both cut pieces and sub-assembled
components in country B, would preclude the finished article from
being considered a product of country B.  A sub-assembly of even
the collar and/or cuffs in country A would usually preclude a
determination that country B was the country of origin.

     Recently, however, we have permitted some minor subassembly
of cut pieces in country A.  In HRL 953640, dated August 19, 1993,
we determined that origin of the finished product, a men's dress
shirt, was in country B, despite the fact that the collar and the
cuffs were made up (sub-assembled) in country A.  In addition, in
HRL 952774 and HRL 954448, both dated August 19, 1993, and
involving men's western style shirts and woven dress and sport
shirts, respectively, we determined that the country of origin for
the shirts was in country B, despite the fact that the collar, in
the former case and the cuffs, in the latter case, were made up in
country A.  In each of these cases, the sub-assembly that took
place in country A was considered a minor part of the complete
assembly of the garment and, as such, it was deemed non-
controlling.  In HRL 954448, we stated the following regarding the
sub-assembly issue:

     Though a sub-assembly operation does take place in Scenario
     II and III in Country A, it is a minor part of the complete
     assembly of the garment and should not control the country  of
origin determination of the shirt.  The assembly process    in
Country B, the time at which all component parts, 
     including the sub-assembled collar and cuffs, are sewn
     together, is viewed by Customs as a substantial assembly
     resulting in a completed garment.

     Moreover, in HRL 952639, which was issued to your company on 
February 22, 1994, we dealt with the country of origin of men's
and women's lined jackets wherein the sub-assembly processes in
country A were more extensive than in the above two cases and they
were more akin to the sub-assembly operations in the instant case. 
For example, in HRL 952639, in country A, the fabric for the men's
jacket was cut into component pieces and the following pieces were
assembled: the collar, cuffs, sweep bottom, front placket and
warmer quilting.  Also in country A, the fabric for the women's
jacket was cut into its component pieces and the following pieces
were assembled: collar, collar quilting, front and back yokes,
front and back yoke quilting and quilting for the warmer.   These
made up components and the remaining cuts pieces, the pockets and
warmer, respectively, were shipped to country B, where they were
made up and the complete assembly by sewing of all components and
pieces into the finished garment was performed.  

     In HRL 952639 we held that the sub-assembly operations
performed in country A were minor operations that produced several
components of the finished product.  No further assembly of the
sub-assembled components took place in country A and all the
individual components were assembled by sewing into the finished
jackets in country B.  Thus, a complete assembly of the components
that made up the garment was performed in country B and since the
assembly process was considered a complex sewing procedure, we
considered it a substantial assembly productive of a substantial
transformation.

     Therefore, based on the above cited cases, it is our position
that it is not necessary that all the cut pieces be assembled in
country B to confer origin in that country.  Minor sub-assembly
operations in country A will not necessarily preclude a
determination of origin in country B, provided that there is in
country B a complete assembly of the component parts that make up
the garment and it is a substantial assembly. 

     In the instant case, the sub-assembly operations that take
place in country A are similar to the ones performed in country A 
in HRL 952639.  In addition, as with the jackets in HRL 952639,
all the individual components are attached by sewing into the
finished shirt in country B.  Therefore, the sub-assembly
operations at issue are also considered a minor part of the
complete assembly of the jackets and should not control their
country of origin determination.  The assembly process in country
B, the time at which all the individual component parts, including
the sub-assembled collar, cuffs, flaps, hood, gusset pocket, front
plackets and quilting are sewn together to form the completed
jacket, necessitates careful and skilled sewing in the assembly. 
Thus, this is viewed by Customs as beyond a simple sewing operation
and qualifies as a substantial assembly process.  As a result, the
country of origin is conferred in country B as this is when a
substantial assembly of the completed garment takes place.  In
addition, a determination that substantial assembly occurs at the
time of assembly of the individual component parts is in adherence
to the terms set by Section 12.130(e)(1) of the Customs
Regulations.    




HOLDING:  
     
     The country of origin for jacket styles #92103 and #92105  is
country B, since a substantial transformation last occurs there. 
     
     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 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