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HQ 960090




April 10, 1997

CLA-2 RR:TC:TE 960090 RH

CATEGORY: CLASSIFICATION

TARIFF NOS.: 6204.62.4010; 6204.62.4040; 6203.42.4010; 6203.42.4035

Mr. Carlos Casas
Trade Commissioner of Mexico
Trade Commission of Mexico
World Trade Center
350 S. Figueroa Street, Suite 296
Los Angeles, CA 90071

RE: Classification of denim jeans; heading 6203; heading 6204; heading 5209; tariff preference;
NAFTA; Article 509

Dear Mr. Casas:

This is in reply to your letter of September 23, 1996, asking for the correct tariff classification of blue jean style pants ("jeans") under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). You submitted a fabric sample from which the jeans are made for us to examine.

FACTS:

The scenario you describe is that an American company intends to import into Mexico 100 percent cotton ring spun slub denim material that is made in Hong Kong. In Mexico, the fabric will be transformed into jeans. You did not provide a description of the manufacturing operations in Mexico. The finished jeans will then be imported into the United States from Mexico.

ISSUE:

What is the classification of the subject jeans and are they eligible for a preferential duty rate?

LAW AND ANALYSIS:

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes, taken in their appropriate order.

Chapter 62, HTSUSA, provides for articles of apparel and clothing accessories, not knitted or crotches. Denim trousers are classifiable under either heading 6203 or 6204, HTSUSA, depending upon whether they are men's or women's denim trousers:

Blue Denim Trousers Classification
Women's 6204.62.4010, HTSUSA
Girls' 6204.62.4040, HTSUSA
Men's 6203.42.4010, HTSUSA
Boys' 6203.42.4035, HTSUSA

Additionally, because the jeans are manufactured in Mexico, a party to the North American Free Trade Agreement (NAFTA), they may be eligible for a preferential duty rate. General Note 12, HTSUSA, incorporates Article 401 of the NAFTA into the HTSUSA. Note 12(a) provides in pertinent part:

(ii) Goods that originate in the territory of a NAFTA party under the terms of subdivision (b) of this note and that qualify to be marked as goods of Mexico under the terms of the marking rules . . . and are entered under a subheading for which a rate of duty appears in the Special' subcolumn followed by the symbol MX' in parentheses, are eligible for such duty rate in accordance with section 201 of the North American Free
Trade Agreement Implementation Act.

Accordingly, the jeans at issue will be eligible for the "Special" "MX" rate of duty provided they are a NAFTA "originating" good under General Note 12(b), HTSUSA, and provided they qualify to be marked as a good of Mexico. Note 12(b) provides in part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(i) they are goods wholly obtained or produced entirely in the territory of Canada,
Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r),
(s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or

The subject merchandise qualifies for NAFTA treatment only if the provisions of General Note 12(b)(ii)(A) are met, that is, if the merchandise is transformed in the territory of Mexico so that the nonoriginating material (the fabric formed in Hong Kong) undergoes a change in tariff classification as described in subdivision (t).

As the jeans are classifiable in subheadings 6203.42 and 6204.62, HTSUSA, subdivision (t), Chapter 62, rules 16 and 24 apply. Rule 16 states that:

A change to subheadings 6203.41 through 6203.49 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6002, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

Rule 24 is identical to rule 16 except that it requires a change to subheadings 6204.41 through 6204.49.

The denim fabric exported from Hong Kong is classifiable in heading 5209, which is one of the headings excepted in rules 16 and 24. Thus, the jeans do not satisfy the requirements of Note 12(b) and are not eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as goods originating in the territory of a NAFTA party.

HOLDING:

The cotton denim jeans are classifiable under subheading 6204.62.4040, HTSUSA (Girls'), subheading 6204.62.4010, HTSUSA (Women's), subheading 6203.42.4010, HTSUSA (Men's), or subheading 6203.42.4035, HTSUSA (Boys'). All of the jeans are dutiable at the rate of 17.4 percent ad valorem. The textile category for the women's and girls' jeans is 348. The textile category for the men's and boys' jeans is 347.

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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