HQ 088069

January 25, 1990

CLA-2 CO:R:C:G 088069 JS

CATEGORY: Classification

Lee Seah Weng

Lee Yin Knitting Factory

10603 Muirfield Drive

Suite 600

Potomac, MD 20854

RE: Country of origin of knit sweaters

Dear Mr. Weng:

This is in response to the letter of August 28, 1990,

submitting additional information pursuant to the country of

origin request dated May 11, 1990, made by the Singapore Embassy

on your behalf.

FACTS:

At issue are two knit sweaters partially constructed in

Singapore and completed in Malaysia. For ease of reference, the

100 percent cotton sweater will be designated \"sweater A,\" and

the 100 percent acrylic sweater will be designated sweater \"B.\"

Sweater A is a long sleeve crew neck or cardigan style

sweater. The 100 percent acrylic yarn originates in Singapore or

Malaysia, and is knitted into fabric in Singapore in what is

described as a highly complex, two hour, computer manufacturing

process. The knit fabric produced in Singapore has been pre-

marked into sweater shapes by the computerized knitting machine,

as indicated in a December 11, 1990 fax (copy enclosed).

According to the information provided in the August 28 letter and

a telephone conversation with Catherine Kurz on October 29, 1990,

the knit fabric is then manually cut along the pre-marked lines

into various sweater parts in Malaysia; these parts are then

sewn, linked, and ironed in Malaysia. The completed sweater is

sent to Singapore where it is inspected, reworked (if necessary),

labeled, handtagged and packaged for shipment. Of the Malaysian

manufacturing procedures, it is contended that only the sewing

and linking processes constitute complex procedures which require

skill. Of the Singapore processes (aside from the knitting) only

the repair of rejected garments requires skill and training.

The total value added per dozen garments is \$28.00 (or 39.3

percent of total cost) in Singapore and \$15.00 (or 21.1 percent

of total cost) in Malaysia. Seventy-five percent of the total

production time is expended in Singapore and the remaining 25

percent is expended in Malaysia.

Sweater B is also a long sleeve crew neck or cardigan

sweater, made of 100 percent cotton. The yarn is sourced in

either Malaysia or Hong Kong. The manufacturing processes

described above are applicable to the manufacture of this

sweater, except for the addition of a simple washing process that

takes place in Malaysia after the part fabrics are sewn and

linked together.

The total value added per dozen garments of sweater B is

\$38.00 (or 31.6 percent of total cost) in Singapore and \$20.00

(or 16.6 percent of total cost) in Malaysia. Seventy-six point

eight percent of the total production time is expended in

Singapore and the remaining 23.2 percent is expended in Malaysia.

ISSUE:

What is the country of origin for sweaters assembled in

Malaysia of fabric knit in Singapore?

LAW AND ANALYSIS:

The country of origin of textiles and textile products is

determined by the application of Section 12.130 of the Customs

Regulations (19 CFR 12.130). In determining the country of

origin of textile and textile products which consist of materials

produced or derived from, or processed in, more than one country,

the imported article is considered to be a product of the country

in which the last substantial transformation took place. A

substantial transformation of a textile or textile product is

said to occur if a commodity undergoes a transformation by means

of substantial manufacturing or processing into a new and

different article of commerce.

Section 12.130 (d) establishes criteria for determining

whether an article has been substantially transformed. However,

the criteria set forth in 19 CFR 12.130(d) are not exhaustive;

one or any combination of these criteria may be determinative,

and additional factors may be considered.

In accordance with 19 CFR 12.130 (d)(2), the following

factors are to be considered in determining whether merchandise

has been subjected to substantial manufacturing or processing

operations: the physical change in the material or article, the

time involved in the manufacturing or processing operations, the

complexity of the operations, the level or degree of skill and/or

technology required, as well as the value added to the article.

Under 19 CFR 12.130(e)(1), a material will usually be

considered a product of a particular country if it has undergone

such changes as are listed, in part, below:

\(iii\) weaving, knitting or otherwise forming fabric;

Under 19 CFR 12.130(e)(2), a material will usually not be

considered a product of a particular country if it has merely

undergone the following changes:

\(ii\) cutting to length or width and hemming or overlocking

fabrics which are readily identifiable as being

intended for a particular commercial purpose;

\(iii\) 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;

Since the sweater fabric is formed by knitting in Singapore,

and the material is demarcated with readily identifiable sweater

shapes, Singapore is established as the country of origin in

conformity with part 12.130(e)(1)(iii) above. The cutting and

linking in Malaysia of the pre-marked fabric constitutes a simple

manufacturing process that does not result in the required

substantial transformation. The computerized knitting process,

as indicated in the December 11 fax, has predetermined the

component sweater shapes which we consider to be completed knit-

to-shape parts.

Therefore, the country of origin of the sweaters at issue

is the country in which the panels are knit and marked, which in

both cases is Singapore.

HOLDING:

The manufacturing operations performed in Singapore

constitute a substantial transformation as required by 19 CFR

12.130. The country of origin for both sweaters A and B is

Singapore, and a Singapore visa must accompany the goods.

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 Customs

Regulations 19 CFR 177.9 (b)(1), which states that a ruling

letter is issued on the assumption that all information

furnished in connection with the ruling request and incorporated

therein, 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 that

there is a change in the facts previously furnished, the country

of origin determination may be affected. In such case, 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 Operations Division

Enclosure