CLA-2 RR:CR:TE 963438 PR

Brenda A. Jacobs, Esquire
Powell, Goldstein, Frazer & Murphy LLP
1001 Pennsylvania Avenue, NW, Sixth floor
Washington, D.C. 20004

RE: NAFTA Eligibility of Denim Jeans; Article 509

Dear Ms. Jacobs:

This is in reply to your letter on behalf of Kentucky Apparel, LLP, requesting a ruling on the eligibility of men's and women's denim jeans under the North American Free Trade Agreement (NAFTA). Our ruling on the matter follows.

FACTS:

The fibers, yarns, and fabrics comprising the bodies of cotton and cotton/polyester jeans are stated to be all produced in North America—either in the United States or Mexico. [We assume by this statement that the cotton is grown in the United States or Mexico and that the polyester filaments are extruded in the United States or Mexico.] The fabric will be cut into parts for jeans in Mexico and those parts will be assembled into the completed garments by sewing in Mexico. Either the pocketing fabrics, or the cut pocket parts, neither of which are produced in North America, will be shipped to Mexico where they will be incorporated into the jeans.

ISSUE:

The issue presented is whether the non-North American pocketing fabric, or pocket parts made from that fabric, will cause the jeans to be nonoriginating goods and, therefore, ineligible for NAFTA treatment.

LAW AND ANALYSIS:

Men's denim jeans are classifiable under subheading 6203.42, Harmonized Tariff Schedule of the United States (HTSUS), if of cotton, or under 6203.43, HTSUS, if of synthetic (polyester) fibers. Women's denim jeans are classifiable under subheading 6204.62, HTSUS, if of cotton, or under 6204.63, HTSUS, if of synthetic fibers.

General Note 12(b), HTSUS, sets out the criteria for determining whether a good is originating under the NAFTA. That note provides, in pertinent part:

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

Chapter rule 3, General Note 12(t)62, HTSUS, which is applicable to goods classifiable in chapter 62, HTSUS, and, therefore, to the subject jeans, provides:

For purposes of determining the origin of a good of this chapter, the rule applicable to that good shall only apply to the component that determines the tariff classification of the good and such component must satisfy the tariff change requirements set out in the rule for that good. If the rule requires that the good must also satisfy the tariff change requirements for visible lining fabrics listed in chapter rule 1 for this chapter, such requirement shall only apply to the visible lining fabric in the main body of the garment, excluding sleeves, which covers the largest surface area, and shall not apply to removable linings.

For reasons that need not be enumerated in this ruling, the pockets in the jeans are not considered in determining the classification of those garments. Accordingly, it is only the cotton fabric, or the cotton/polyester fabric, forming the jeans which determines their classification.

Pursuant to chapter rule 3, denim jeans do not normally have any visible linings and, in any event, material which forms pockets is not considered to be a lining. Furthermore, the rules for determining whether cotton or cotton/polyester jeans are originating under the NAFTA do not mention visible lining fabrics. General Note 12(t)62.16 contains the rule for men's cotton or cotton/polyester jeans:

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.

General Note 12(t)62.28 contains the rule for women's cotton or cotton/polyester jeans:

A change to subheadings 6204.61 through 6204.69 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.

Heading 5204 through 5212 provides for cotton yarns and cotton fabrics. Chapter 54 provides for man-made filament sewing thread, yarns, and fabrics. Headings 5508 through 5516 provide for man-made staple fiber yarns and fabrics. Accordingly, for the jeans to qualify as originating under the cited tariff change rules, either the polyester filaments in the jeans (if any) must have been extruded in a NAFTA country, or the cotton, and, where applicable, the polyester staple fibers in those jeans must be spun into yarns in a NAFTA country. In addition, the rest of the manufacturing processes necessary to produce the jeans must also be performed in a NAFTA country. The statement of facts submitted with the ruling request indicates that, except for the pocket fabric, the jeans comply with the cited tariff change requirements.

Since chapter rule 3 requires that only the component which determines the tariff classification of the good must satisfy the tariff change requirements, and, as noted above, the pocketing fabric is not considered in determining the classification of the jeans, those jeans are originating goods according to the terms of the NAFTA.

HOLDING:

Where cotton or cotton/polyester fibers are spun into yarns in Mexico and/or the United States, those yarns are woven in Mexico and/or the United States into fabrics, and the fabrics are cut and sewn into finished denim jeans in Mexico, those jeans are originating goods under the NAFTA even though the pocketing fabric in the jeans may be non-North American origin.

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
Commercial Rulings Division