CLA-2 CO:R:C:T 954711 CMR

Robert Stack, Esq.
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd Fl
New York, New York 10036-8901

RE: Country of origin request for two styles of denim jeans; cutting in one country, assembly in another; Section 12.130

Dear Mr. Stack:

This is in response to your request of July 22, 1993, on behalf of your client, Lazeon Corporation, regarding a country of origin determination for two styles of denim jeans in which the production involves processing in more than one country. Supplemental information requested by this office was received January 6, 1994. Sample garments were received with your initial submission.

FACTS:

The two styles of denim jeans at issue will be made of either 100 percent cotton or blends of cotton, polyester, rayon and spandex denim fabric.

Style D is similar to a five pocket denim jean. Style D has a fly front with a zipper closure, a button closure at the waistband, two rear patch pockets, two front scoop pockets, a coin pocket within one of the front pockets, five single belt loops, and a horizontal "X" single-stitched across each of the rear patch pockets. Style D varies from the typical five pocket jeans in that the garment has a lengthwise panel added at the side seam of each pant leg. The side panels are approximately four inches wide and run from the bottom up the side of the pant leg to about the lower hip/upper thigh area. Each panel has twelve pairs of bullet- shaped tabs sewn at regular intervals along the seam where the side panel meets the front and back leg panels. The tabs are approximately 1-3/4 inches in length and taper from a width of approximately 1-3/8 inches to 1/2 inch. The tabs consist of two pieces of denim fabric sewn together with a button hole added at the tapered end of each tab. A denim cord -2-

(consisting of a thin piece of denim fabric, folded in half and single stitched) is threaded through the button holes of each tab and its ends are tied into a bow at the bottom of the pants leg.

Style E is similar to style D except the vertical panels added at the side seam of each pant leg is somewhat different than that of style D. In style E, the vertical panels start at the bottom of the front scoop pocket and run the length of each pant leg. Each side panel is tapered in width from approximately 2-1/4 inches at the top to 1-3/4 inches at the bottom. Eighteen criss-crossed pairs of 2-3/4 inch long strips of belt loop material are attached at regular intervals at the seams where the side panel meets the front and back leg panels.

The production of each garment will involve processing in three countries: Hong Kong, Israel and the People's Republic of China. We will refer to Hong Kong as Country A, Israel as Country B and China as Country C, as you did in your submission.

The fabric for the garments will be woven in either Country A or Country B. The zippers, buttons and rivets will be sourced in either Country A, Country B, Country C or another country. The pocket linings for both styles will be sourced in any of the three countries and will be cut in Country B or Country C. The garment labels will be sourced from any of the three countries or possibly another country.

In Country B, the fabric will be cut into garment pieces. The cutting operation consists of laying out the fabric to form a number of plies, placing the pattern on the top ply and cutting out the garment pieces with an electric knife. The cut pieces consist of: two back yoke panels, two front and two back leg/rise panels, waistband and components, two patch pockets, cut belt loops, side panels, the denim cord and tabs for style D, the denim strips for style E.

The cut pieces will be sent to Country C for complete assembly into jeans. The assembly operation consists of sewing the cut panels together by machine and attaching the belt loops, button, rivets, zipper and labels to create the completed jeans. The assembly operation requires the following processes, which are not necessarily listed in order:

1. feeding the back yoke, back rise and waistband; 2. double needle stitching the front pocket, coin pocket, and back pocket; 3. over-locking the front pocket 4. double needle stitching the zipper and attaching the fly front 5. single needle stitching the front pocket, back pocket and fly front, and placing the belt loops -3-

6. over-locking the side seam 7. single needle stitching the side seam 8. feeding the inseam 9. hem stitching the leg bottom 10. bar tacking 11. stitching the button hole 12. placing the button and rivets.

Additional steps for the individual styles include the following:

For Style D: 1. sewing together the tab inserts and making the button-holes; 2. tabs and side panels will be simultaneously single needle stitched at the side seams and front panel/side insert seams, with the excess fabric overlocked; 3. the denim cord will be threaded through the button -holed tabs.

For Style E: 1. the denim strips for the side panels will be sewn; 2. the side panels and the criss-crossed denim strips will be single needle stitched at the side seams and the excess inside excess inside fabric overlock stitched

After assembly, the garments will be inspected, washed (bleached), pressed, folded, have hang tags attached and be packed for shipment to the United States.

In your supplemental information, you have indicated that the possible bleaching processes in the washing step include enzyme washing or stone washing. Additionally, the finishing may involve overdyeing in place of, or in addition to, the bleaching.

ISSUE:

What is the country of origin of the jeans at issue?

LAW AND ANALYSIS:

Country of origin determinations for textiles and textile articles are governed by the terms of section 12.130 of the Customs Regulations (19 CFR 12.130). Section 12.130(b) provides that a textile or textile product which is processed in more than one country will be considered a product of that country where it -4-

last underwent a substantial transformation. A substantial transformation is defined therein as a transformation by means of substantial manufacturing or processing operations into a new and different article of commerce.

Section 12.130(d)(1) provides 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) sets out factors which will be considered in determining if merchandise has been subjected to substantial manufacturing or processing operations. These factors are:

(i) The physical change in the material or article as a result of the manufacturing or processing operations (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 (v) The value added to the article or material in each foreign territory or country compared to its value which imported into the U.S.

Section 12.130(e)(1)and (e)(2) set out processes which will normally be considered to be substantial and those which will not be considered substantial. Section 12.130(e)(1) states, in pertinent part, that an article will usually be a product of a particular country which it has undergone in that particular country:

* * *

(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 article 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).

Section 12.130(e)(2) states, in pertinent part, that an article will usually not be a product of a particular country by merely having undergone: -5-

(i) Simple combining operations, labeling, pressing, cleaning or dry cleaning, or packaging operations, or any combination thereof;

* * *

(iv) One or more finishing operations on yarns, fabrics, or other textile articles, such as showerproofing, superwashing, bleaching, decating, fulling, shrinking, mercerizing, or similar operations; or

(v) Dyeing and/or printing of fabrics or yarns.

Customs has issued several rulings on the country of origin of jeans cut in one country and assembled in another. Based on these rulings, the assembly of a typical five pocket jean would not be considered a substantial transformation, and the country of origin would be that country in which the garment parts have been cut. In HRL 082747 of February 23, 1989, regarding a situation wherein garment parts were cut in one country and the jeans completely assembled from those parts in another, Customs stated: "In our view, for textile restraint purposes, the assembly of jeans does not constitute a substantial manufacturing or processing operation." See also, HRL 951169 of April 1, 1992. In this case, Styles D and E are variations from typical five pocket jeans. For that reason, we requested additional information regarding their production. Having reviewed the submitted information, we believe that although the assembly of these garments is more involved and time consuming than that of the average jeans, so too is the cutting of the garment pieces. Therefore, we see no reason to deviate in this instance from the general norm stated in HRL 082747 that the assembly of jeans does not constitute a substantial manufacturing operation. See also, HRL 954631 of October 22, 1993 and HRL 954817 of December 3, 1993. Therefore, the country of origin of the subject jeans is Country B, the country in which the garment parts are cut.

You have requested that we specifically address whether the bleaching and/or dyeing performed in the country of assembly will affect the country of origin determination; and, whether the sourcing in the country of assembly of the pocket lining material and accessories (button, rivets, etc.) will affect the origin determination.

Section 12.130(e)(2), previously cited in part, clearly states that finishing operations such as washing and bleaching generally do not convey origin for a textile article. Thus, the washing and bleaching operations performed in the country of assembly are viewed as finishing operations which do not affect the origin determination. -6-

In regard to the sourcing of the pocket lining material and accessory items, we believe the rulings cited in your submission for the proposition that the sourcing of these items is immaterial to the origin determination are not quite on point. However, we agree with the proposition that these items should not affect the origin determination on the basis that they are considered de minimus in relation to the garments at issue.

HOLDING:

The country of origin of styles D and E at issue herein is the country in which the garment parts are cut, i.e., Country B.

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