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HQ W562844

December 16, 2003

CLA-02 RR:CR:SM 562844 DCC


TARIFF NO.: 9802.00.50

Port Director
U.S. Bureau of Customs and Border Protection 9 North Grand Avenue
Nogales, AZ 85621

RE: Request for Internal Advice; Applicability of subheading 9802.00.50, HTSUS to belted jeans from Mexico

Dear Port Director:

This is in response to a request for internal advice from your office, dated August 25, 2003, regarding belted jeans imported by Jones Apparel of Texas, Inc. (“Jones”). Your request concerns the applicability of subheading 9802.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”), to jeans that are exported to Mexico where a belt is added to the garment, which is then returned to the United States. The request for internal advice was initiated by Arthur Bodek, counsel for the importer by letter dated August 21, 2003. On November 24, 2003, we met with counsel at Headquarters, at which time counsel provided a sample of the belted pants.


Jones imports jeans manufactured in China into the United States. The merchandise is entered and duty is paid on the jeans. The jeans are then shipped to Mexico where they are inspected and hang tags and price tags are attached. In addition, Jones purchases belts that are also made in China. The belts are either shipped through the United States in bond to Mexico, or imported into the United States with duties paid and then shipped to Mexico.

In Mexico, the belts are inserted into the belt loops on the jeans. The belts are held in place with plastic ties that remain on the garments until they are sold to U.S. retailers. The belted jeans are then packed in boxes and the garments are shipped back to the United States. The importer claims that the belted jeans should qualify for preferential tariff rates under 9802.00.50, HTSUS.


Whether denim jeans that are exported to Mexico for the insertion of belts from China qualify for duty exemption when returned to the United States under subheading 9802.00.50, HTSUS.

Law and Analysis:

Subheading 9802.00.50, HTSUS, provides a full or partial duty exemption for articles that are returned after having been exported to be advanced in value or improved in condition by means of repairs or alterations, provided that the documentary requirements of 19 C.F.R. § 181.64 (for articles returned from Canada or Mexico) or 19 C.F.R. § 10.8 (for articles returned from any other country) are met.

Section 181.64(a), Customs Regulations, (19 CFR 181.64(a)), states that:

‘Repairs or alterations’ means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new and commercially different good from, the good exported from the United States.

In circumstances where the operations abroad destroy the identity of the exported article or create a new or commercially different article, entitlement to subheading 9802.00.50, HTSUS, is precluded. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff’d C.D. 1752, 36 Cust. Ct. 46 (1956); and Guardian Indus. v. United States, 3 CIT 9 (1982). Additionally, entitlement to this tariff treatment is not available where the exported articles are incomplete for their intended purposes and the foreign processing is a necessary step in the preparation or manufacture of the finished articles. Dolliff & Co. v. United States, 455 F. Supp. 618 (Cust. Ct. 1978), aff’d, 599 F.2d 1015 (CCPA 1979).

In Amity Fabrics, Inc. v. United States, 43 Cust. Ct. 64, C.D. 2104 (1959), “pumpkin” colored fabrics were exported to Italy to be redyed black because the pumpkin color had gone out of fashion and black was a consistently good seller. The court held that the identity of the goods was not lost or destroyed by the dyeing process, that no new article was created since there was no change in the character, quality, texture, or use of the merchandise; it was merely changed in color. The court found that such change constituted an alteration for purposes of a precursor provision to subheading 9802.00.50, HTSUS (paragraph 1615(g) of the Tariff Act of 1930, as amended).

In HRL 561781, dated September 19, 2000, CBP considered foreign lace that was exported to the Philippines to have rope (thick thread), sequins or beads, or any combination of these items, hand embroidered onto the lace. The purpose of the reembroidery was to enhance the marketability of the lace. CBP concluded that the reembroidery process did not result in the loss of the good’s identity or the creation of a new article with a different commercial use. As a result, CBP found that the reembroidery process constituted an alteration within the meaning of subheading 9802.00.50, HTSUS.

More recently, in HRL 560501, dated February 27, 2001, CBP considered whether lace brassieres exported to China where beads and sequins were affixed to the garments qualified for special treatment under subheading 9802.00.50. In that case, CBP noted that because both decorated and plain brassieres were sold at the retail level in the United States, the foreign decorating process was not a necessary step in the preparation or manufacture of finished brassieres and the garments were complete for their intended use at the time of export. Also, in HRL 562618 dated May 21, 2003, CBP considered previously-imported and duty-paid polo shirts that were exported to Canada where company names or logos were embroidered onto the shirts. CBP held that the embroidery constituted an acceptable alteration within the meaning of subheading 9802.00.50, HTSUS.

However, in HRL 554928, dated May 25, 1988, CBP held that the attachment of a coin pocket to a sock was not an acceptable alteration under item 806.20, Tariff Schedules of the United States, the predecessor to subheading 9802.00.50, HTSUS. In that case, a U.S.-manufactured sock was exported to Hong Kong where a zippered coin pocket was attached. CBP determined that the addition of the coin pocket was more than an alteration because the Hong Kong processing created a new and different article of commerce with specialized and unique appeal.

In addition, in HRL 560081, dated March 13, 1997, CBP determined that eyelash curler kits assembled and packaged in Mexico did not qualify for preferential treatment under subheading 9802.00.50, HTSUS. Each kit consisted of an eyelash curler, heating unit, cosmetics, and instruction sheet. The heating unit was assembled in Mexico while the other items of the kit were merely packaged together to create a set under General Rule of Interpretation (“GRI”) 3(b), HTSUS. All of the components were of U.S. origin, except the eyelash curler which was produced in Taiwan and shipped directly to the Mexican producer. CBP held that the assembly and packaging operation did not qualify as an alteration because the components exported from the U.S. either lost their identity during assembly or were subject only to packaging operations.

Counsel for the importer claims that the addition of belts in Mexico to returned jeans is an acceptable alteration under subheading 9802.00.50, HTSUS. Counsel argues that the insertion of a belt through loops is an “addition” within the regulatory definition of a repair or alteration in 19 C.F.R. § 181.64(a). Counsel further claims that the addition of the belt neither destroys the essential characteristics of the jeans as exported from the United States, nor creates a new or commercially different good. In support of this claim, counsel asserts that the addition of a belt to a pair of jeans is similar to the embroidery operations that CBP found to be an alteration in HRL 561781.

For classification purposes, the jeans and belt are considered “goods put up in sets for retail sale.” See, HRL 966639, dated October 22, 2003. It is our opinion that, as was the case in HRL 560081, putting items together to create a retail set abroad is not the type of “addition” contemplated as a repair or alteration under section 181.64(a). We believe the belted jeans in the instant case are readily distinguishable from the sequined and beaded garments addressed in HRLs 561781 and 560501 and the embroidered shirts in HRL 562618. The belts in this case are substantial articles of clothing that are similar to other belts imported and sold separately by Jones. Consequently, the belts are not so much a purely decorative addition to the jeans as complementary fashion accessories. Thus, upon return to the United States the belted jeans do not qualify for a duty exemption under subheading 9802.00.50, HTSUS. Provided the jeans are inspected and labeled with hang tags and price tags, they will qualify for entry under subheading 9802.00.50, HTSUS.


On the basis of the information presented, we find that the insertion of belts into jeans in Mexico does not qualify as an alteration under subheading 9802.00.50, HTSUS. Therefore, the belted jeans are not entitled to the duty exemption under this tariff provision. However, provided the jeans are inspected and labeled with hang tags and price tags, they will qualify for entry under subheading 9802.00.50, HTSUS.

This decision should be mailed by your office to the party requesting internal advice no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP web site at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.


Myles B. Harmon, Director
Commercial Rulings Division

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