HQ 960073 - Country of Origin of men's suits, suit jackets, and suit pants; 19 CFR 102.21(c)(4); - United States International Trade Commision Rulings

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HQ 960073

July 8, 1997

CLA-2: RR:TC:TE 960073 PR

CATEGORY: CLASSIFICATION

Jack Gumpert Wasserman, Esq.
Wasserman, Schneider & Babb
90 John Street
New York, New York 10038

RE: Country of Origin of men's suits, suit jackets, and suit pants; 19 CFR 102.21(c)(4);
19 CFR 102.17; 19 CFR 12.130(c)(2)

Dear Mr. Wasserman:

This ruling is in response to your submission of January 21, 1997, concerning the country of origin of men's suits and suit jackets since the suit jackets may be imported separately.

FACTS:

Submitted for Customs determination of origin are three sets of assembly or manufacturing processes to produce the suit jacket. The processing to produce the suit pants involves one set of assembly or manufacturing processes and remains the same in each fact situation. We have been advised that the different sets of assembly or manufacturing processes presented are not hypothetical. The inquirer believes that the country of origin under each of the following fact situations presented for both the suits and the suit jackets when imported separately is Country A, which is a United States insular possession. SUIT Jacket
FACT SITUATION NO. 1
Jacket SHELL Jacket LINING
Country A
Cutting Cutting
Fusible interlining-- chest piece (hymo) left & right fronts upper & lower sleeve pieces collar flaps
Assemble-- Assemble-- fronts to sides fronts to sides sleeves (two seams) sleeves (two seams) back panels back panels
Country B
Sew small parts
Assemble-- Assemble-- small parts to components backs to front/side assemblies backs to front/side assemblies sleeves to body sleeves to body entire lining to outer shell shoulder seams
FACT SITUATION NO. 2
Jacket SHELL Jacket LINING
Country A
Cutting Cutting
Fusible interlining-- chest piece (hymo) left & right fronts upper & lower sleeve pieces collar flaps
Assemble-- Assemble-- fronts to sides fronts to sides back panels back panels backs to front/side assemblies backs to front/side assemblies

Country B
Sew small parts
Assemble-- Assemble-- small parts to sleeves (two seams) components sleeves to body sleeves (two seams) entire lining to outer shell shoulder seams sleeves to body
FACT SITUATION NO. 3
Jacket SHELL Jacket LINING
Country A
Cutting Cutting
Fusible interlining-- chest piece (hymo) left & right fronts upper & lower sleeve pieces collar flaps
Assemble-- Assemble-- sleeves (two seams) sleeves (two seams) back panels back panels front panels to sides front panels to sides backs to front/side assemblies backs to front/side assemblies
Country B
Sew small parts
Assemble-- Assemble-- small parts to major components sleeves to body shoulder seams shoulder seams sleeves to body entire lining to outer shell

SUIT PANTS
FACT SITUATIONS NO's. 1, 2, AND 3
Country A
All components cut.
Fusible interlinings assembled to left and right fly pieces. Left and right waistband sections assembled (but not joined) nonwoven fabric edge guides sewn to shell fabric (Note that submission states that fusible interlinings have been applied to shell fabrics, but samples have no fusible interlinings). sew "banrol" to above assembly. sew inside lining to above assembly.
Sew shell fabric facings to hip pockets (NOTE that samples show no evidence of this being done).
Create back welt pockets by cutting and sewing. (NOTE that samples only contain partially completed rear pockets; the pocket fabrics have not been sewn into the shape of bags).

Country B
Complete assembly of the four major panels by sewing. Waistband finished and assembled to major panels. Belt loops.
Fly lining and zipper attached.

After the assembly and manufacturing operations are performed in Country B, the pants and suit jacket are returned to Country A where (1) button holes are made; (2) buttons attached; (3) the pants are matched up with the suit coat; (4) labels and trim are sewn; and (5) the garments are cleaned, steamed, put on hangers, boxed and shipped as completed suits.

ISSUE:

The inquirer seeks a determination of the country of origin of the garments imported as suits and of the individual suit jacket when imported separately.

LAW AND ANALYSIS:

General Note 3(a)(iv), Harmonized Tariff Schedule of the United States (HTSUS) (formerly General Headnote 3(a), Tariff Schedules of the United States), provides for the duty-free treatment of goods imported from a United States insular possession if they: (1) are the growth or "product of" the possession; (2) meet certain value-content requirements; and (3) come directly to the customs territory of the United States from the possession. To comply with the requirements of General Note 3(a)(iv), an imported article first must qualify as a "product of" a United States insular possession. See Yuri-Fashions v. United States, 632 F. Supp. 41, 46 (CIT 1986); T.D. 90-17 dated February 23, 1990. However, in this instance, the inquirer has requested a ruling on the country of origin of the suit and the suit jacket, not on the duty status of the imported merchandise. Accordingly, the applicability of General Note 3(a)(iv) is not an issue addressed by this ruling.

The rules of origin generally applicable to textile and apparel products are provided for by statute in section 334, Uruguay Round Agreements Act (19 U.S.C. 3592). As directed by section 334, Customs promulgated implementing regulations, section 102.21, Customs Regulations (19 CFR section 102.21), which became effective July 1, 1997. In accordance with section 102.21, the country of origin of imported textile and apparel goods is determined by a hierarchy of rules set forth in paragraphs (c)(1) through (c)(5) of that section.

In situations where woven garments are assembled in more than one country, paragraphs one through three of section 102.21 are not applicable. Accordingly, the country of origin of the instant garments is determined by the application of either paragraph (c)(4) or paragraph (c)(5). Section 102.21(c)(4) provides:

(4) 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.

Section 102.21(c)(5) provides:

(5) Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2), (3) or (4) of this section, the country of origin of the good is the last country, territory, or insular possession in which an important assembly or manufacturing process occurred.

SUIT PANTS

In determining the country of origin of the suit pants imported separately from the suit jacket, applying section 102.21(c)(4), the most important processing occurs in Country B, where the subject pants take shape; where they become a recognizable article of commerce; and where all the major components are joined.
SUIT JACKETS

In determining the country of origin of the suit jacket pursuant to section 102.21(c)(4), the three fact situations presented produce mixed results. In the first fact situation, in Customs view, the assembly operations performed in County B clearly outweigh the importance of the assembly operations performed in Country A. Accordingly, applying the rules contained in 19 U.S.C. 3592 and section 102.21, the country of origin of the suit jacket in the first fact situation is country B.

The processing and assembly steps listed in the second fact situation present a more difficult question of origin. It appears that the manufacturing and processing done in Country A and Country B are virtually equal. Six major panels are joined in Country A to form the body of the outer shell, (except for the shoulder seams) and a similar six panels are joined in Country A to create the body lining (except for the shoulder seams). In Country B, the two halves of each outer shell sleeve cylinder and the two halves of each sleeve lining cylinder are assembled, the linings are attached to the sleeves, the sleeves are then attached to the body of the garment, the body lining is attached to the outer shell, and the shoulder seams are closed. While Customs does not normally place a great deal of importance to the assembly of linings in determining the country of origin of a garment, it is believed that in tailored men's wool suit jackets, the assembly of the tailored linings merits additional consideration. In addition, Customs has consulted with experts in the construction of garments and has been informed that the assembly of sleeves, the attachment of those sleeves, and the closing of shoulder seams are extremely important to the production of a tailored man's wool suit jacket. Accordingly, the country of origin of the suit jacket when imported separately under the facts presented in the second fact situation is, by application of section 102.21(c)(5), Country B, the country in which the last important assembly occurs.

The third fact situation differs from the second fact situation. As noted above, the importance of the assembly operations performed in Countries A and B on the suit jacket in the second fact situation is virtually equal. By adding more assembly operations in Country A in the third fact situation (the forming of the sleeve cylinders for both the outer shell and the lining), and removing those assembly operations from Country B, it appears that in the third set of facts, the most important assembly is being performed in Country A. Accordingly, applying section 102.21(c)(4), the origin of the suit jacket when imported separately under the facts presented in the third fact situation is Country A, the country in which the most important assembly occurs. However, since Country A is an insular possession of the United States, the applicability of Section 12.130(c)(2), Customs Regulations (19 CFR ? 12.130(c)(2)), must be considered. That section provides:
(2) Applicability to U.S. insular possession products processed outside the insular possession. Unless otherwise required by law, the rules of origin applicable to products of the U.S. shall also apply to products of insular possessions of the U.S. Accordingly, notwithstanding paragraph (b) of this section, for purposes of section 204, Agricultural Act of 1956, as amended, products of insular possessions of the U.S., if imported into the U.S. after having been advanced in value, improved in condition, or assembled, outside the insular possessions shall not be treated as products of those insular possessions.

Section 12.130(c)(2) was promulgated pursuant to authority delegated by the President in Executive Orders 11651, dated March 5, 1972, and 12475, dated May 9, 1984, to the Committee for the Implementation of Textile Agreements (CITA) as the policy making agency, and to the Customs Service, as the administrating agency. The President's authority in this area is contained in section 204, Agricultural Act of 1956, as amended (7 U.S.C. ? 1854). Section 204 authorizes the President to issue regulations governing the entry, or withdrawal from warehouse of textiles or textile products subject to international agreements in order to effectuate those agreements, even if the goods "are the products of countries not parties to the agreement."

After its return to Country A from Country B the suit jacket described in the third fact situation did not undergo any manufacturing or processing which would cause Country A to be the country of origin. Therefore, the clear language of section 12.130(c)(2) precludes, for quota, visa, and other textile restraint purposes, the suit jacket from being treated as a product of an insular possession of the United States. Accordingly, the suit jacket will be subject to any restraints or restrictions applicable to products of Country B.

SUIT JACKET AND SUIT PANTS IMPORTED TOGETHER AS A SUIT

In the first and second fact situations, both the jacket and the pants are products of Country B. Accordingly, it follows that the country of origin of the suit under both of those fact situations is Country B.

In the third fact situation, where the suit jacket and suit pants have different countries of origin, we look to applicable Customs regulations and rulings to determine how the suit should be treated. Section 102.17, Customs Regulations (19 CFR ? 102.17), which is incorporated by reference in section 102.21, and which specifically refers to section 102.21, provides, in pertinent part, as follows:
? 102.17 Non-qualifying operations.

A foreign material shall not be considered to have undergone the applicable change in tariff classification set out in ? 102.20 or ? 102.21, or satisfy the other applicable requirements of that Section by reason of:
(c) Simple packing, repacking or retail packaging without more than minor processing;

The terms "material" and "minor processing" are defined in sections 102.1(l) and (m), Customs Regulations (19 CFR ? 102.1(l) and (m)), respectively.

(l) Material. "Material'' means a good that is incorporated into another good as a result of production with respect to that other good, and includes parts, ingredients, subassemblies, and components.

(m) Minor processing. ``Minor processing'' means the following:

(4) Trimming, filing or cutting off small amounts of excess materials;

(5) Unloading, reloading or any other operation necessary to maintain the good in good condition;

(6) Putting up in measured doses, packing, repacking, packaging, repackaging;

(7) Testing, marking, sorting, or grading;

(8) Ornamental or finishing operations incidental to textile good production designed to enhance the marketing appeal or the ease of care of the product, such as dyeing and printing, embroidery and appliques, pleating, hemstitching, stone or acid washing, permanent pressing, or the attachment of accessories notions, findings and trimmings; or

(9) Repairs and alterations, washing, laundering, or sterilizing.

In accordance with the clear wording of the above quoted Customs regulations, the components of the suits (i.e., the jackets and pants) returned to Country A after processing in Country B are subjected to "simple packing, repacking or retail packaging without more than minor processing." As a result, under section 102.21, the jackets and pants remain products of Countries A and B respectively.

The foregoing result is not a novel consequence of the circumstances of this case. It appears that Treasury Decision (TD) 91-7, which is an interpretive rule concerning, among other things, the applicability of special tariff treatment programs (e.g. the General System of Preferences (GSP) and the Caribbean Basin Initiative (CBI)) to collections of articles classified under a single tariff provision such as sets, mixtures, and composite goods, would have dictated the same origin result for the imported suits. In addition to recognizing that there may be multiple countries of origin for those type articles, TD 91-7 specifically states that where an entire imported entity (set or composite good) is not the "product of" the beneficiary country, neither the entity nor any part thereof is entitled to preferential rates of duty.

As a general rule, a collection classifiable in one subheading pursuant to the GRI's will receive CBI treatment only if all of the items or components in the collection are considered "products of" the beneficiary country. The same is now true under the GSP with respect to articles entered on or after August 20, 1990. (emphasis added)

TD 91-7 mentions only CBI, GSP, Automotive Products Trade Act, Agreement on Trade in Civil Aircraft, U.S.-Canada Free Trade Agreement, and the U.S.-Israel Free Trade Area. However, we see no valid distinction between these preference programs and General Note 3(a)(iv). In the same manner that those programs require a good be the "growth, product or manufacture" of a beneficiary country, General Note 3(a)(iv) requires that the imported good be the "growth, product or manufacture" of the U.S. insular possession.

Since General Note 3(a)(iv) requires a product to be the "growth, product or manufacture" of a U.S. insular possession, and the pants component of the suit is not such a product, the "suit" is not a product of an insular possession.

In a recent submission to this office, the inquirer stated that a suit is a single entity which is provided for eo nomine in the Harmonized Tariff Schedule of the United States (HTSUS), and, therefore, it may not be considered to be a set, mixture, or composite good.

The Harmonized Commodity Description and Coding System, Explanatory Notes, which is the official interpretation of the HTSUSA at the international level (for the 4 digit headings and the 6 digit subheadings), states at page 4: [C]omposite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

The suits in question clearly conform to that definition. In addition, the definition of the term "suit" contained in both chapters 61 and 62, HTSUS, specifically states that the term "means a set of garments . . ." (emphasis added) Accordingly, without trying to engage in semantics, it appears to Customs that by the wording of the HTSUS, for classification purposes a suit can be characterized as either a set or a composite good. The inquirer's submission in this area appears to be directed towards the classification of the suit. In this regard, Customs has no intention of ruling that a suit consisting of components with different countries of origin would be classified under a provision, or provisions, other than the eo nomine provision applicable to that suit. Such a position would clearly be contrary to the requirements of the HTSUS. Section 102.17, C.R., is applicable only with respect to determining the origin of imported goods. It is not applicable or even considered when determining the proper classification of a suit.

HOLDING:

Pursuant to section 102.21, the country of origin of the suit pants is Country B.

Pursuant to section 102.21, the country of origin of the suit jacket, when imported separately from the suit pants is Country B under the first two fact situations and Country A under the third fact situation. In the third fact situation, pursuant to section 12.130(c)(2), the suit jacket is a product of Country B for quota, visa, and other textile restraint purposes.

Pursuant to section 102.21, under the first two fact situations, the country of origin of the suit is Country B. Under the third fact situation: (1) since, pursuant to section 102.21, the jacket and pants, when imported as a suit, remain products of Countries A and B respectively, the "suit" is not the "growth, product or manufacture" of an insular possession as required by General Note 3(a)(iv); and (2) pursuant to section 12.130(c)(2), the country of origin of the suit, for quota, visa, and textile restraint purposes is Country B. The holdings set forth above apply only to the specific factual situation and merchandise identified in the ruling request and as described in this ruling. This position is clearly set forth in section 177.9(b)(1), Customs Regulations (19 CFR 177.9(b)(1)), which 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 section 177.9(b)(1), the ruling will be subject to modification or revocation. Any change in the facts 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 section 177.2, Customs Regulations (19 CFR 177.2).

In the event it is determined that the imported goods are not being manufactured exactly as described in this ruling, the ruling will not be applicable to those goods. You should also be aware that the assembly and manufacturing processes described in the foregoing ruling may be subject to periodic verification by the Customs Service.

Sincerely,

John Durant, Director

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