HQ 734467

April 17, 1992

MAR-2-05 CO:R:C:V 734467 GRV

CATEGORY: MARKING

John B. Pellegrini, Esq.

Ross & Hardies

529 Fifth Avenue

New York, N.Y. 10017-4608

RE: Country of origin and quota treatment of knit golf shirts

from Singapore, processed in Singapore and Indonesia from

foreign fabric and trim components from Hong Kong. Textile

products; 19 CFR 12.130; T.D. 85-38; T.D. 90-17; Substantial

Transformation; cutting to shape; 19 CFR 12.130(d)(2);

731036; 733841; C.S.D. 90-19; C.S.D. 90-20; 086229; 083359;

734215; partial assembly; 082747

Dear Mr. Pellegrini:

This is in response to your letter of January 14, 1992, on

behalf of The Van Heusen Company, requesting a ruling on the

country of origin, for marking and quota purposes, of two types

of knit golf shirts. Two assembled golf shirt samples\--one of

each type and each marked \"MADE IN SINGAPORE\"\--were submitted for

examination.

FACTS:

Two styles of knit golf shirts (denominated \"RAM\" and

\"EDITION\") will be imported from Singapore. The production of

these shirts involves fabric-processing operations in two

countries (Singapore and Indonesia), and include attaching

certain trim items from another country (Hong Kong).

In Singapore, foreign fabric and interlining will be cut to

shape and the collars for the respective shirt styles will either

be top fused to the interlining or separated. The cut fabric

components will then be sent to Indonesia where they will be

partially assembled: the placket, pocket and collar will be made

and set, and the shoulder seams will be joined. The shirts will

then be returned to Singapore where final assembly operations

will be performed on the fabric components, including the attach-

ment of certain trim items (buttons, tread and fabric labels from

Hong Kong), to complete the shirts. These assembly operations

include setting and hemming the sleeves, closing the side seams,

making buttonholes and setting the buttons, and in the case of

one of the shirt styles (\"RAM\") embroidering a logo onto the

shirt. The relative processing costs per dozen shirts for each

shirt style in each country are estimated as follows:

\(1\) for the \"RAM\" golf shirt, the Singapore operations

total over \$60.00 and the Indonesian operations total

less than \$3.00, and

\(2\) for the \"EDITION\" golf shirt, the Singapore operations

total over \$35.00 and the Indonesian operations total

less than \$2.00.

Following inspecting, pressing and packaging steps, the completed

shirts will be exported to the U.S.

Based on our findings and determination in Headquarters

Ruling Letter (HRL) 731036 dated July 18, 1989, which dealt with

polo-style shirts processed in multiple countries, you believe

that the country of origin, for marking and quota purposes, of

the knit golf shirts is Singapore and ask that we confirm this

view.

ISSUE:

What is the country of origin of the two types of knit golf

shirts, for marking and textile quota purposes, under 19 U.S.C.

1304 and 19 CFR 12.130(b)?

LAW AND ANALYSIS:

The General Country of Origin Marking Requirement

The marking statute, 304 of the Tariff Act of 1930, as

amended (19 U.S.C. 1304), provides that, unless excepted, every

article of foreign origin (or its container) imported into the

U.S. shall be marked in a conspicuous place as legibly, indelibly

and permanently as the nature of the article (or its container)

will permit in such manner as to indicate to the ultimate pur-

chaser the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the

country of origin marking requirements and exceptions of 19

U.S.C. 1304.

The primary purpose of the country of origin marking statute

is to \"mark the goods so that at the time of purchase the ulti-

mate purchaser may, by knowing where the goods were produced, be

able to buy or refuse to buy them, if such marking should influ-

ence his will.\" United States v. Friedlaender & Co., 27 CCPA

297, 302, C.A.D. 104 (1940).

The Country of Origin Requirements Applicable to Textiles and

Textile Products

For textiles and textile products subject to 204 of the

Agricultural Act of 1956, as amended (7 U.S.C. 1854), the

principles for determining the country of origin are provided at

12.130, Customs Regulations (19 CFR 12.130). For purposes of

12.130, where a textile or textile product consists of materials

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

territory or country, or insular possession of the U.S., the

country of origin is defined as that foreign territory or coun-

try, or insular possession 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

into a new and different article of commerce. 19 CFR 12.130(b).

Thus, the substantial transformation test for textiles embraces

two separate findings: (1) whether there has been a new and

different article of commerce created, and (2) whether the new

article was created by means of a substantial manufacturing or

processing operation. See, Mast Industries, Inc. v. United

States, 11 CIT 30, 652 F.Supp. 1531 (1987), aff\'d, 5 Fed.Cir.

105, 822 F.2d 1069 (1987).

Factors indicating whether or not a particular manufactur-

ing/processing operation is substantial are set forth in 19 CFR

12.130(d)-(e). Section 12.130(d)(2) provides that in determining

whether merchandise has been subjected to substantial manufactur-

ing/processing operations, (1) the physical change to the

material/article, (2) the relative time involved in the foreign

operation, (3) the relative value added to the material/article,

\(4\) the complexity of the foreign operation, and (5) the level/

degree of skill/technology required for the foreign operation

will be considered. Section 12.130(e)(1)(iv) provides that

fabric material usually will be a product of the particular

country where it has been cut and those parts assembled into the

completed article, however, 12.130(e)(2)(i) provides that the

fabric material usually will not be considered a product of the

particular country where simple combining operations occur.

As the merchandise imported is classifiable in HTSUS section

XI and was processed in more than one foreign country, the coun-

try of origin rules of 12.130(b) are applicable, and Customs has

stated that the principles of origin contained in 12.130 are

applicable to such merchandise for all Customs purposes,

including the assessment of duties and marking. T.D. 85-38, 19

Cust. Bull. 58, 68 (1985), and T.D. 90-17, 24 Cust. Bull. \_\_\_

(1990). Regarding the substantial transformation criteria and

examples found at 12.130, Customs has stated that \"\[a\]ny factual

situations not squarely within those examples will be decided by

Customs in accordance with the provisions of section 12.130(b)

and (d).\" T.D. 85-38, at p. 72. In general, Customs has also

stated that \"\[c\]utting garment parts from fabric will result in a

substantial transformation of the fabric, T.D. 85-38, at p. 67,

and that garment parts partially assembled in one country after

an intervening assemble in another country are not substantially

transformed, HRL 082747 dated February 23, 1989.

In the referenced Headquarters Ruling Letter (HRL 731036

dated July 17, 1989), Customs considered whether the complete

assembly in country B of cotton knit polo-style shirt component

panels that had been cut in country A constituted a substantial

transformation of the cut fabric components for marking and quota

purposes. Applying the criteria at 12.130(d), we found that the

processing operations that took place in country B did not affect

a substantial transform of the cut garment panels, as the

assembly process was not complex, it took very little time and

did not require highly skilled workers. (See also, HRL 733841

dated February 7, 1991 (8 garment components cut in Taiwan and

assembled in China were determined to be Taiwanese for country of

origin marking, quota and duty purposes), and C.S.D. 90-20

(foreign assembly of cotton work gloves from fabric purchased and

cut into pieces in first country not substantially transformed),

upheld on reconsideration in HRL 086229 dated April 11, 1990).

In discussing the provisions at 19 CFR 12.130(d) and (e), we

stated that where either less than a complete assembly of all the

cut pieces of a garment is performed in one country, or the

assembly is a relatively simple one, then Customs will rule on

the particular factual situations as they arise.

In C.S.D. 90-19, we considered whether sweatshirts,

assembled from cut panels in a country other than the country

where the knit fabric was produced and cut, were substantially

transformed by the foreign assembly operation. Interpreting the

polo shirt ruling above, we similarly found that the assembly of

sweatshirts panels did not require highly skilled workers nor

that putting together a sweatshirt was any more difficult than

putting together a polo-style shirt. Accordingly, we held that

the sweatshirt had not been substantially transformed by the

assembly operations and that the country where the fabric was

purchased and cut would be the country of origin, pursuant to 19

CFR 12.130. See also, HRLs 083359 dated May 18, 1990 (sewing

and finishing in second country of trouser parts cut in first

country where fabric originated does not substantially transform

the finished trousers, which remain a product of the first

country) and 734215 dated November 13, 1991 (assembly in second

country of sweater parts cut in first country where fabric

originated does not substantially transform the finished

sweaters, which remain a product of the first country).

After examining the textile samples submitted and for the

reasons which follow, we find that the two styles of knit golf

shirts will be a product of Singapore when imported into the

U.S. First, the cutting of the fabric to shape in Singapore

transforms the foreign fabric into a product of Singapore.

Second, we find that the partial assembly operations in Indonesia

and the finish assembly operations in Singapore do not further

transform the Singapore-cut fabric components. Applying the

criteria at 12.130(d), we find that the assembly operations\--in

either Indonesia or Singapore\--do not involve a high degree of

skill and workmanship; the physical change to the material/

article is minor; the relative values added to the shirts by

means of the assembly operations is not substantial\--averaging

approximately 30%, and; the complexity of the foreign operation

appears to be simple rather than complex. These findings are in

accordance with the above rulings concerning sweater and polo-

style shirt assemblies. Accordingly, no substantial transforma-

tion of the Singapore-cut fabric occurs in either Indonesia or

Singapore, as the respective assembly operations are simple, not

complex, combining operations.

HOLDING:

The country of origin of the two types of knit golf shirts

is Singapore, for marking and textile quota purposes, under 19

U.S.C. 1304 and 19 CFR 12.130(b), as the assembly operations

performed in Indonesia and Singapore do not substantially

transform the Singapore-cut fabric.

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)), which

provides that a ruling letter is issued on the assumption that

all of 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