Country of origin determination for baseball cap andneoprene glove; 19 CFR 12.130(b),(d),(e); cuttingconstitutes substantial transformation

HQ 957518 May 2, 1995 CLA R:C:T 957518 jb CATEGORY: CLASSIFICATION William Mok Overseas Sourcing Limited 1370 Broadway, Suite 1004 New York, NY 10018 RE: Country of origin determination for baseball cap and neoprene glove; 19 CFR 12.130(b),(d),(e); cutting constitutes substantial transformation Dear Mr. Mok: This letter is in response to your inquiry of January 6, 1995, on behalf of your client, Sam Jung Hwagong Co. Ltd., requesting a country of origin determination for a baseball cap and neoprene glove. Samples were submitted to this office for examination. FACTS: Your letter indicates that the imported merchandise consists of various articles, which in addition to the baseball cap and neoprene glove, includes a fishing wader and diving suit. Insufficient information was submitted in regard to the fishing wader and diving suit. Particularly, though you indicate the cost breakdown for the manufacturing processes, you neither provide information as to the number of constituent pieces for each good nor the type of assembly that is involved, i.e., skilled or non-skilled. In addition, no samples of the fishing wader or diving suit were submitted to this office to aid us in making a determination. Accordingly, this letter will address only the baseball cap and neoprene glove. You state that the baseball cap and neoprene glove will be manufactured by either of the following processes: CASE A CASE B cutting Korean piece goods in Korea cutting Korean piece goods in Korea complete assembly in Vietnam partial assembly in Vietnam final assembly and finishing in Korea 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)(2). The following are 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; (v) The value added to the article or material; 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: (i) Dyeing 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; (ii) Spinning fibers into yarn; (iii) Weaving, knitting or otherwise forming fabric; (iv) Cutting of fabric into parts and the assembly of those parts into the completed article; or (v) 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). We have previously held that cutting of fabric into pattern pieces constitutes a substantial transformation of the fabric, resulting in the apparel pieces becoming a product of the country where the fabric is cut. (See Headquarter Ruling Letter (HQ) 955125, dated January 27, 1994; HQ 953697, dated July 26, 1993; and HQ 952531, dated November 25, 1992). As was stated by Customs in Treasury Decision (T.D.) 85-38 (19 Cust. Bull. 58, 70; 50 FR 8714), the final document rule establishing 19 CFR 12.130, in pertinent part: [T]he assembly of all cut pieces of a garment usually is a substantial manufacturing process that results in an article with a different name, character or use than the cut pieces. It should be noted that not all assembly operations of cut garment pieces will amount to a substantial transformation of those pieces. Where either less than 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, utilizing the criteria in section 12.130(d). Customs has consistently held that the mere assembly of goods by simple sewing, is not enough to substantially transform the components of an article into a new and different article of commerce (See HQ 082747, dated February 23, 1989; HQ 086665, dated March 23, 1990; HQ 951169, dated April 1, 1992; HQ 951437, dated July 17, 1992; and HQ 952647, dated January 27, 1993). Customs has also held that sub-assembly operations are considered only a minor part of the complete assembly of merchandise and should not control country of origin determinations (See HQ 953638, HQ 953639, HQ 953640 and HQ 953641, dated August 19, 1993). In the case of the subject baseball cap and neoprene glove, the assembly operations are minor combining and sewing operations and do not possess the requisite degree of complexity to be deemed substantial manufacturing processes for purposes of conferring country of origin status. No great degree of skill or technology is required, nor is tailoring involved. (See, HQ 954583, dated August 18, 1993; HQ 954446, dated August 11, 1993; HQ 952916, dated January 29, 1993; and HQ 952918, dated January 29, 1993). The operations performed in Korea i.e., cutting the fabric, materially changes the fabric into designated pieces. This constitutes a substantial transformation of the fabric and confers country of origin. HOLDING: The country of origin of the submitted baseball cap and neoprene glove is Korea. It is in Korea where the cutting takes place and where the fabric last undergoes a substantial transformation and is transformed into new and different articles of commerce. 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 Commercial Rulings Division