HQ 085660: Country of Origin of T-shirts

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 085660


                                     October 16, 1989


CLA-2 CO:R:C:G  085660  HP

CATEGORY:  Classification

Mr. Trevor Thomas
Co-Operative Consulting, Australia
P.O. Box 250
Mawson, ACT  2607
AUSTRALIA

RE:  Country of Origin of T-shirts

Dear Mr. Thomas

     This is in reply to your letter of September 15, 1989,
concerning the country of
origin determination of T-shirts styled in Australia.

FACTS:

     The merchandise at issue consists of plain 100 percent knit
cotton T-shirts,
manufactured in China.  Upon importation into Australia, you plan
 to add Australian-
design prints, multi-colored (including metallized) inks, and
possibly some lace or other
sewn-on adornments (fabric-based) to the T-shirts.  You state
that the work performed
in Australia will be at least twice the cost of the Chinese T-
shirts (e.g., 50% local
value-added).  Thereafter, you plan to package the T-shirts and
export them into the
United States.

     In a letter dated September 19, 1989, Mr. James W. Wilkie,
of our Singapore office,
advised you that it was his preliminary opinion

        that the processes which you contemplate
        performing on the Chinese T-
        shirts in Australia do not constitute a "
        substantial transformation", and,
        therefore, would not result in a change in the
        country of origin from
        the Peoples Republic of China to Australia.
        Consequently, the T-shirts
        would enter the United States as products of the
        PRC and would be
        subject to applicable quota requirements.

ISSUE:

     Whether the Australian processing is sufficient to
constitute a substantial transfor
mation of the garment for country of origin purposes?
LAW AND ANALYSIS:

     Garments 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 transforma
tion 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.

     Section 12.130(e)(1) of the regulations describes
manufacturing or processing opera
tions from which an article will usually be considered a product
of the country in which
processes occurred.  Section 12.130(e)(1)(i) provides:

          Dying of fabric and printing when accompanied
        by two or more of
        the following finishing operations: bleaching,
        shrinking, fulling, napping,
        decating, permanent stiffening, weighting,
        permanent embossing, or
        moireing; * * *

As none of these finishing operations take place in Australia,
this section does not
change the country of origin to Australia.

     Section 12.130(e)(2) of the regulations describes
manufacturing or processing opera
tions from which an article will usually not be considered a
product of the country in
which the processes occurred.  Section 12.130(e)(2)(v) provides:

          Dying and/or printing of fabrics or yarns.

As the printing and addition comprise the fundamental processes
taking place in
Australia, this section would seem to denote China as the country
 of origin.
     Section 12.130(d)(1) of the regulations provides:

          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.

     It is our opinion that a new and different article of
commerce has not arisen from
the Australian processes.  The article is identified as a T-shirt
, still has the character
of a T-shirt, and would still be sold and used as a T-shirt, both
 before and after
processing.  Therefore, although the article has undergone
processing operations in
Australia significantly increasing its value, these operations
are not sufficient to change
the country of origin for quota purposes.

HOLDING:

     As a result of the foregoing, we agree with the preliminary
opinion of our Sin
gapore office, in that the instant merchandise is considered a
product of the People's
Republic of China for quota purposes.

     Under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA),
rates of duty in General Column 1 (Most-Favored-Nation (MFN)
Rates) apply to the
entry of goods from countries not entitled to special tariff
treatment.  As of the date
of this ruling, goods imported from both Australia and China are
entitled to General
Column 1 rates.

     In order to ascertain from which textile category a visa
from China would be
required, a classification decision under the HTSUSA must made.
We have enclosed
literature on this subject for your information.




                                   Sincerely,


                                   John Durant, Director
                                   Commercial Rulings Division