HQ 0954631 - Country of origin of denim jeans; Section 12.130, Customs Regulations - United States International Trade Commision Rulings

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HQ 954631

October 22, 1993

CLA-2 CO:R:C:T 954631

CATEGORY: CLASSIFICATION

Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway
43rd Floor
New York, NY 10036

RE: Country of origin of denim jeans; Section 12.130, Customs Regulations

Dear Sirs:

This is in response to your inquiry of July 16, 1993, on behalf of your client, Lazeon Corporation - D/B/A Daily Jeans, requesting a country of origin determination for women's denim jeans. Samples were submitted for examination.

FACTS:

There are three styles of women's jeans at issue. Style A is described as a traditional basic five pocket denim trouser containing a fly front with zipper closure, a button closure at the waistband, two rear patch pockets, two scoop front pockets, a coin pocket within one front pocket, and single belt loops. Style B is constructed essentially the same as Style A except for the double belt loops crossed in the shape of an "X" in lieu of the single belt loops and the addition of grommets into the front of each pant leg. Style C contains the same basic construction features of Style A with the exception of double belt loops crossed in the shape of an "X" in lieu of single belt loops and three 3-inch long vertical openings on the outer seam of each pant leg with three nailhead studded denim strips.

The manufacturing steps for the subject merchandise are as follows: The denim fabric will be woven in Hong Kong and any denim components (zippers, buttons, rivets, nailhead studs, grommets, and cording) will also be sourced in Hong Kong; the denim fabric will be cut into garment pieces in Israel. The assembly operation will be performed in the People's Republic of China or an alternative country other than Hong Kong or Israel. The aforementioned assembly operation involves sewing the cut panels together by machine to produce the finished trousers. The specific assembly steps are as follows: (1) feeding the back yoke, back rise and waistband; (2) double needle stitching the front, coin pocket, and back pocket; (3) over-locking the front pocket; (4) attaching the belt loops; (5) stitching the side seams; (6) hemming the legs; (7) and stitching the button holes. Also for Style B, the holes will be punched and reinforced patches will be sewn on, the grommets will be inserted, and the nylon cord will be threaded through the grommet holes. In the case of Style C, three vertical openings will be left in the outer seam of each pant leg, and the narrow denim strips will be adorned with nailhead studs and sewn across each opening.

ISSUE:

What is the country of origin for the merchandise in question?

LAW AND ANALYSIS:

Country of origin determinations for textile products are subject to Section 12.130, Customs Regulations (19 CFR 12.130). Section 12.130 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), Customs Regulations, sets forth criteria for determining whether a substantial transformation of a textile product has taken place. This regulation states 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), 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), Customs Regulations, states that for 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

(v) The value added to the article or material

Section 12.130(e)(1), Customs Regulations, describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130(e)(1)(v) provides the following:

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 and tailoring of all cut pieces of suit-type jackets, suits and shirts).

According to T.D. 85-38, the final document rule establishing 19 CFR 12.130:

The assembly of all the 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 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 situation as they arise, utilizing the criteria in Section 12.130(d).

Customs has consistently determined that cutting fabric into garment pieces constitutes a substantial transformation of the fabric and the clothing pieces become products of the country where the fabric is cut. (See e.g. Headquarters Ruling Letter (HRL) 952531, dated November 25, 1992, HRL 089539, dated April 22, 1992).

Customs has also long held that the mere assembly of goods entailing simple combining operations, trimming or joining together by sewing is not enough to substantially transform the components of an article into a new and different article of commerce. (See e.g. HRL 082787, dated March 9, 1989; and HRL 082747, dated February 23, 1989).

In HRL 951169, dated April 1, 1992, Customs determined the country of origin of denim jeans similar in construction to the instant garments. The denim jeans therein were imported into Singapore from Country X already cut into garment pieces. The garment pieces were completely assembled and finished in Singapore. Customs concluded that the garments underwent their last substantial transformation in the country where they were cut into garment pieces, Country X.

In this case, the sewing operation performed in Singapore involves the simple assembly of various garment pieces. The sewing does not involve the complex sewing operation required by Section 12.130(e)(1)(v). The cutting process in Israel, however, does amount to a substantial manufacturing operation. The cutting operation materially changes the fabric into designated garment pieces, which constitute new and different articles of commerce. Therefore, in accordance with prior Customs rulings and Section 12.130(e), the instant garments are subject to their last substantial transformation in Israel, where they were cut into garment pieces.

HOLDING:

The country of origin of Styles A,B, and C is the country where they were cut into garment pieces, Israel.

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
Commercial Rulings Division

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