HQ 956464: Country of Origin determination for certain knit wearing apparel

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 956464

                         August 4, 1994

CLA  CO:R:C:T  956464  jb

CATEGORY:  CLASSIFICATION

Ms. Josefa M. Dizon
Embassy of the Philippines
1600 Massachusetts Avenue, N.W.
Washington, D.C. 20036

RE:  Country of Origin determination for certain knit wearing
     apparel 

Dear Ms. Dizon:

     This letter is in response to your inquiry of 
May 18, 1994, requesting a country of origin determination for
certain knit wearing apparel.  No sample garments were submitted
to this office for examination.

FACTS:

     The garments in question are stated to be a sweater composed
of 100 percent cotton fabric featuring some embroidery work on
the front panel, and a button front knitted jacket composed of
100 percent acrylic fabric.  You state that there are two
possible processing operations for these garments and that in
both instances the yarn will be sourced in "Country A":

     1.   PROJECT A
 
          knitting garment components, linking and finishing
          garments, completely in the Philippines

     
     2.   PROJECT B

          knitting garment components in the Philippines
          linking and finishing garments in China

     Though you did not indicate in your letter the complexity of
each of the operations, a cost comparison was submitted which
reflected a slightly higher "total cost" for operations performed
in Project A, i.e, complete manufacture in the Philippines.

ISSUE:

     What is the country of origin of the merchandise at issue?


LAW AND ANALYSIS:

     Section 12.130 of the Customs Regulations (19 CFR 12.130)
sets forth the principles of country of origin for textiles and
textile products subject to Section 204 of the Agricultural Act
of 1956, as amended (7 U.S.C. 1854).

     Pursuant to 19 CFR 12.130(b), the standard of substantial
transformation governs the country of origin determination where
textiles and textile products are processed in more than one
country.  The country of origin of textile products is deemed to
be that foreign territory or country where the article last
underwent a substantial transformation.  Substantial
transformation is said to occur when the article has been
transformed into a new and different article of commerce by means
of substantial manufacturing or processing.
     
     The factors to be applied in determining whether or not a
manufacturing operation is substantial are set forth in 19 CFR
12.130(d).  Section 12.130(e)(1) describes manufacturing or
processing operations from which an article will usually be
considered a product of the country in which those operations
occurred.  

     Section 12.130(e)(1)(v) states that an article will be a
product of a particular foreign country, when it has undergone
prior to importation into the U.S. in that foreign country:

     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 of all cut pieces of suit-type jackets, suits and
     shirts).

     In both Project A and B the knitting occurs in the
Philippines.  Section 12.130(e)(1)(iii) states that an article
will usually be a product of a country where it has undergone
"knitting or otherwise forming fabric".  As yarn is knit in the
Philippines in both Project A and B to form the panel(s) of the
garments, a substantial transformation is deemed to have occurred
in this country.  In Project B, the panels are later sent to
China where they are linked and finished, that is, the component
parts are assembled to form the completed garments.  

     With regard to the assembly operations performed in China in
the case of Project B, we note that the linking of the components
into the completed garments, is not a substantial transformation 
for purposes of section 12.130(e)(2)(iii).  As was stated by 


Customs in Treasury Decision (T.D.) 85-38 (19 Cust. Bull. 58, 69;
50 FR 8714), the final document rule establishing 19 CFR 12.130,
in pertinent part:

     [T]he joining together by looping, linking, sewing, or other
     means, of knit-to-shape components produced in a single
     country, even when accompanied by other processing (i.e.
     washing, drying, mending, etc.) normally incident to the
     assembly process will not usually cause a substantial
     transformation...
     
     [B]ased on time, value added by processing at each stage,
     complexity, etc. such an assembly process does not cause the
     knit-to-shape components to be substantially transformed. 
     The assembly of knit-to-shape component parts is a
     relatively simple processing operation that does not require
     a great deal of time.

     Accordingly, Customs has held that the mere assembly of
goods by linking and looping, or simple sewing, is not enough to
substantially transform the components of an article into a new
and different article of commerce.      
     
     As such, in the case of both Project A and B, the garments
last undergo a substantial transformation in the Philippines as
this is the country where all of the components of the garments
were knit-to-shape.  It is thus our belief that the Philippines
is the country of origin of the subject sweaters.   

HOLDING:

     The country of origin of the submitted merchandise, for both
Project A and Project B, is the Philippines.  
     
     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 of the information furnished in the ruling letter,
either directly, by reference, or by implication, is accurate and
complete in every material respect.  

     Should it be subsequently 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