Country of Origin of Hats, Gloves and Mittens

HQ 957268 December 28, 1994 CLA-CO:R:C:T 957268 GG CATEGORY: Classification Mr. Dick Lin Canonda Enterprise Co., Ltd. 6/F. No. 119, Chien Kuo N. Road Sec. 2, Taipei, Taiwan R.O.C. RE: Country of Origin of Hats, Gloves and Mittens Dear Mr. Lin: This is in response to your request, dated September 14, 1994, for a binding ruling on the country of origin of certain knitted hats, gloves and mittens currently being imported by your company. Information contained in a supplemental submission of October 29, 1994, has also been incorporated into this file. FACTS: The importer has manufactured knitted hats, gloves and mittens, from raw materials to their finished state, in Taiwan for several years. Several of the processes involved are now going to be undertaken in Vietnam. The new operation will be as follows. Acrylic or wool fiber of Taiwanese origin will be knit into jacquard circular in Taiwan. The semi-finished hats, gloves and mittens will then be sent to Vietnam. There, the hats will be inspected, separated piece by piece, overlock stitched, steam ironed, and size fitted. A pompom will be made up and attached. The semi-finished gloves and mittens will be inspected, separated piece by piece, fingerjointed, and hand closed in Vietnam. The cuffs will be blindlinked. The gloves and mittens will be turned inside out and brushed before being steamed to obtain accurate sizes. Labels will be sewn inside the hats, gloves and mittens in Vietnam, J-hooks and hang tags will be affixed, and the finished articles will go through quality control before being packed and shipped to the United States. Sixty percent of the value of the merchandise is attributable to the operations performed in Taiwan; the remaining forty percent is added in Vietnam. ISSUE: What is the country of origin of the hats, gloves and mittens? LAW AND ANALYSIS: Country of origin determinations for textile products are made pursuant 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 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)(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; (ii) The time involved in the manufacturing or processing; (iii) The complexity of the manufacturing or processing; (iv) The level or degree of skill and/or technology required in the manufacturing or processing operations; and (v) The value added to the article or material. Section 12.130(e)(1) describes manufacturing or processing operations from which an article will normally be considered a product of the country in which those operations occurred. Section 12.130(e)(1)(iii) specifies that "weaving, knitting or otherwise forming fabric" results in a substantial transformation. Therefore, the knitting of the acrylic or wool fiber into jacquard circular in Taiwan creates new and different articles of commerce, i.e., the semi-finished hats, gloves and mittens. Section 12.130(e)(2) of the Customs Regulations specifies, in pertinent part, that an article or material usually will not be considered to be a product of a particular foreign country by virtue of merely having undergone simple combining operations, labeling, pressing, cleaning or dry cleaning, or packaging operations, or any combination thereof; or 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. The various operations performed in Vietnam are of this nature and consequently, do not change the commercial designation or identity, the fundamental character, or the commercial use of the articles. The hats, gloves and mittens last underwent a substantial transformation in Taiwan, and therefore, pursuant to Section 12.130(b) of the Customs Regulations, are products of that country. HOLDING: The country of origin of the hats, gloves and mittens is Taiwan. This ruling is issued pursuant to the provisions of Part 177 of the Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation presented and to the merchandise identified in the ruling request. If the information furnished is not accurate or complete, or there is a change in the factual situation, this ruling will no longer be valid. In such an event, a new ruling request should be submitted. Sincerely, John Durant Director, Commercial Rulings Division