HQ 0952046 - Country of origin of jeans - United States International Trade Commision Rulings

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HQ 952046

October 26, 1992

CLA-2 CO:R:C:T 952046 CC

CATEGORY: CLASSIFICATION

John Carver
President
B.C.I. (U.S.A.) Inc.
122 W. First St., Ste. 202
Port Angeles, WA 98362

RE: Country of origin of jeans

Dear Mr. Carver:

This letter is in response to your inquiry of June 18, 1992, requesting a country of origin determination for 100 percent cotton denim jeans.

FACTS:

According to your submissions, denim, buttons, thread, and pocketing, all of Hong Kong origin, will be sent to Mongolia. In Mongolia, the fabric is cut into pieces, which are then assembled to produce the jeans. The jeans are shipped to China where they are washed and packed before being sent to the United States. You have provided the following costs associated with materials and production of the jeans in each country: Hong Kong - 32 dollars per dozen, Mongolia - 10 dollars per dozen, and China - 8 dollars per dozen.

ISSUE:

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

LAW AND ANALYSIS:

For country of origin purposes, Section 12.130 of the Customs Regulations (19 CFR 12.130) is applicable to the merchandise at issue. Section 12.130(b) of the Customs Regulations 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) of the Customs Regulations sets forth criteria in determining whether a substantial transformation of a textile product has taken place. This regulation states that these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1) 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 as a result of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(v) The value added to the article or material in each foreign territory or country, or insular possession of the U.S., compared to its value when imported into the U.S.

Section 12.130(e)(1) of the Customs Regulations provides the following:

An article or material usually will be a product of a particular foreign territory or country, or insular possession of the U.S., when it has undergone prior to importation into the U.S. in that foreign territory or country, or insular possession any of the following:

(iv) Cutting of fabric into parts and the assembly of those parts into the completed article.

In Mongolia fabric is cut into pieces, which are assembled to produce the jeans at issue. In application of Section 12.130(e)(1)(iv) of the Customs Regulations, the merchandise at issue is substantially transformed in Mongolia. The processes performed in China on the jeans, washing and packing, are finishing operations; they are not considered substantial manufacturing operations. Consequently, the last substantial transformation for the merchandise at issue takes place in Mongolia.

HOLDING:

The country of origin of the merchandise at issue is Mongolia.

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 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

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