HQ 959309 - Country of origin determinations; 5-pocket denim jeans; Section 102.21, Customs Regulations. - United States International Trade Commision Rulings

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HQ 959309

June 24, 1996
CLA-2 RR:TC:TE 959309 SK

CATEGORY: CLASSIFICATION

Donald S. Stein
Manatt Phelps Phillips
1501 M Street, N.W.
Suite 700
Washington, D.C. 20005-1702

RE: Country of origin determinations; 5-pocket denim jeans; Section 102.21, Customs Regulations.

Dear Mr. Stein:

This is in response to your inquiry of June 3, 1996, requesting a country of origin determination for 5-pocket denim pants pursuant to Section 102.21, Customs Regulations. In your submission, you describe two different manufacturing scenarios used to produce the subject merchandise. A sample of the finished garment was submitted to this office for examination.

FACTS:

At issue is the country of origin of a 5-pocket denim trouser. The subject merchandise is made of 100 percent woven cotton denim. The pants feature five pockets (two rear, one coin and two front welt pockets), a five-button fly (with shank buttons) and are styled in the overall traditional manner of denim jeans.

We note two discrepancies between the written description of the manufacturing processes these garments undergo, and the actual sample submitted to this office. Specifically, you state that the subject trousers undergo "pleating" in China and "setting of zipper" in Hong Kong. As the sample submitted to Customs
does not possess either of these features, we will discount these processes from our consideration.

You have presented this office with two different manufacturing scenarios by which the subject merchandise will be produced. They are described as follows:

SCENARIO 1
HONG KONG AND CHINA

Fabric formed

HONG KONG

Fabric cut

CHINA

1) Overlock stitch right and left coin pocketing for front panel;

2) Sewing of front pocket and pocketing (or welt pocket);

3) Pleating (for twill pants only)

[Note: Customs will not take this operation into consideration inasmuch as it does not apply to the sample submitted to this office.]

4) Sewing of yoke seam, patch pocket for back panel;

5) Setting of pockets.

HONG KONG

1) Setting of zipper;

[Note: Customs will not take this operation into consideration inasmuch as it does not apply to the sample submitted to this office.]

2) Seam front fly;

3) Sewing of back and front rises;

4) Linking of side seam;

5) Linking of inseam;

6) Hemming

7) Linking waistband and label.

CHINA

1) Bartacking, creation of button holes and setting of belt loops;

2) Trimming of thread ends;

3) Garment wash;

4) Rivets and shank buttoning;

5) Checking;

6) Ironing;

7) Packing.

SCENARIO 2

Scenario 2 is identical to Scenario 1 except that the fabric is cut in China.

ISSUE:

What is the country of origin for the denim trousers in the two manufacturing scenarios presented?

LAW AND ANALYSIS:

Pursuant to the Uruguay Round Agreements Act, new rules of origin will be effective for textile or apparel products entered, or withdrawn from warehouse for consumption, on or after July 1, 1996. These rules were published in the Federal Register, 60 Fed. Reg. 46188 (September 5, 1995). Section 102.21, Customs

Regulations (19 CFR Section 102.21), sets forth the general rules which determine country of origin. The country of origin of a textile or apparel product will be determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of Section 102.21.

Section 102.21(c)(1) sets forth the general rule for determining the country of origin of a textile or apparel product in which the good is wholly obtained or produced in a single country, territory, or insular possession.

Section 102.21(c)(2) provides for instances where the country of origin of a textile or apparel product cannot be determined under Section 102.21(c)(1). Section 102.21 (c)(2) provides:

Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1) of this section, the country of origin of the good is the single country, territory, or insular possession in which each foreign material incorporated in that good underwent an applicable change in tariff classification, and/or met any other requirement, specified for the good in paragraph (e) of this section.

Section 102.21(c)(3) governs instances where the country of origin of a textile or apparel product cannot be determined pursuant to paragraphs (c)(1) or (c)(2) and where the subject merchandise consists of either a good that was knit to shape in a single country or, except for goods of certain specifically enumerated headings, if the good was not knit to shape and was wholly assembled in a single country.

Section 102.21, paragraph (b)(6), defines "wholly assembled" as follows:

The term wholly assembled' when used with reference to a good means that all components, of which there must be at least two, preexisted in essentially the same condition as found in the finished good and were combined to form the finished good in a single country, territory, or insular possession. Minor attachments and minor embellishments (for example, appliques, beads, spangles, embroidery, buttons) not appreciably affecting the identity of the good, and minor subassemblies (for example, collars, cuffs, plackets, pockets), will not affect the status of a good as wholly assembled' in a single country, territory, or insular possession.

Section 102.21(c)(4) provides:

Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory, or insular possession in which the most important assembly or manufacturing process occurred.

In the manufacturing scenarios set forth above, Section 102.21(c)(1) does not provide the relevant country of origin analysis because the subject merchandise is not wholly obtained or produced in a single country.

The denim trousers are classifiable under either heading 6203 or 6204, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), depending upon whether they are men's or women's denim trousers. Accordingly, Section 102.21(c)(2) directs us to paragraph (e) of this section which states, in pertinent part, that origin is conferred in the following situations:

6201-6208 (1) If the good consists of two or more component parts, a change to an assembled good of heading 6201 through 6208 from unassembled components, provided that the change is the result of the good being wholly assembled in a single country, territory, or insular possession.

Section 102.21(c)(2) does not provide the relevant analysis in either manufacturing scenario described above inasmuch as the trousers were not wholly assembled in a single country. Accordingly, our hierarchical application of Section 102.21(c) continues.

Section 102.21(c)(3) does not provide the relevant country of origin analysis inasmuch as the subject garments are not knit to shape goods and, as stated above, they did not undergo assembly in a single country, territory, or insular possession.

Section 102.21(c)(4), which looks to the country, territory, or insular possession in which the most important assembly or manufacturing process occurred as conferring origin, provides the determinative analysis in both manufacturing scenarios described above. In both Scenarios 1 and 2, the most important assembly operation takes place in Hong Kong as that is where the assembly of all the component pieces occurs except for the attachment of the pockets, sewing of the
back yoke, attachment of the belt loops and the performance of various other minor operations and finishing operations. Therefore, pursuant to Section 102.21(c)(4), the country of origin of the trousers at issue in both Scenarios 1 and 2 is Hong Kong.

In your submission to this office, you request that Customs confirm that any goods produced in Hong Kong utilizing Hong Kong's Outward Processing Arrangement will be deemed to be presumptively of Hong Kong origin for purposes of Section 102.21, Customs Regulations. Customs cannot make such a confirmation. Each request for a country of origin determination is made on a case by case basis, which allows Customs to carefully consider the particulars of individual manufacturing scenarios. Pursuant to the Uruguay Round Agreements Act, for textile or apparel products entered, or withdrawn from warehouse for consumption, on or after July 1, 1996, Customs will base its country of origin determinations on U.S. law only, specifically Section 102.21, Customs Regulations.

HOLDING:

In both Scenarios 1 and 2, the country of origin of the 5-pocket denim trousers is Hong Kong pursuant to Section 102.21(c)(4), Customs Regulations.

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 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, if there is any change in the facts submitted to Customs, it is recommended that a new ruling request be submitted in accordance with 19 CFR 177.2.

Sincerely,

John Durant, Director
Tariff Classification Appeals

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