MAR-2-05 CO:R:C:V 733746 KG
Mr. Peter W. F. Wu
Moderntex International Corporation
Interlanche House, 1st Floor
39-41 Hankow Road
Tsim Sha Tsui
Kowloon, Hong Kong
RE: Country of origin marking of imported surgical cloth;
cutting; hemming; 19 CFR 12.130; 086132; 733601; 087477.
Dear Mr. Wu:
This is in response to your letter of August 21, 1990,
requesting information on the country of origin of imported
surgical cloth. We also have a copy of a letter dated September
21, 1990, from Jamaica's Economic Development Agency that you
furnished, which explained that U.S. Customs has the authority to
make country of origin determinations with respect to articles to
be imported into the U.S.
FACTS:
You order fabric from the People's Republic of China. The
fabric is shipped to Jamaica. In Jamaica, the fabric is cut,
sewn, labeled and packed to be sold in the U.S. as surgical
cloth. A sample was submitted. The sample is a piece of white
cotton cloth with a single hem on all four sides.
ISSUE:
What is the country of origin of the imported surgical
cloth?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that, unless excepted, every article of foreign
origin imported into the U.S. shall be marked in a conspicuous
place as legibly, indelibly, and permanently as the nature of the
article (or container) will permit, in such a manner as to
indicate to the ultimate purchaser in the U.S. the English name
of the country of origin of the article.
Section 12.130, Customs Regulations (19 CFR 12.130), sets
forth the principles for making country of origin determinations
for textile and textile products subject to section 204 of the
Agricultural Act of 1956, as amended (7 U.S.C. 1854)"("section
204").
Pursuant to 19 CFR 12.130, the standard of substantial
transformation governs the determination of the country of origin
where textiles and textile products are processed in more than
one country. The country of origin of textile products is deemed
to be that foreign territory, country, or insular possession
where the article last underwent a substantial transformation.
Substantial transformation is said to occur when the article has
been transformed into a new and different article of commerce by
means of substantial manufacturing or processing operations.
In T.D. 85-38, published in the Federal Register on March 5,
1985, (50 FR 8714), which is the final rule document which
established 19 CFR 12.130, there is a discussion of how the
examples and the factors enumerated in the regulation are
intended to operate. "Examples set forth in 19 CFR 12.130(e) are
intended to give guidance to Customs officers and other
interested parties. Obviously, the examples represent clear
factual situations where the country of origin of the imported
merchandise is easily ascertainable. The examples are
illustrative of how Customs, given factual situations which fall
within those examples, would rule after applying the criteria
listed in 19 CFR 12.130(d). Any factual situation not squarely
within those examples will be decided by Customs in accordance
with the provisions of 19 CFR 12.130(b) and (d)." The factors to
be applied in determining whether or not a manufacturing
operation is substantial are set forth in 19 CFR 12.130(d).
Section 12.130(e)(1)(iv) states that a textile article will
usually be a product of a particular country if the cutting of
the fabric into parts and the assembly of those parts into the
completed article has occurred in that country. However, 19 CFR
12.130(e)(2)(ii) states that a material will usually not be
considered to be a product of a particular foreign country by
virtue of merely having undergone cutting to length or width and
hemming or overlocking fabrics which are readily identifiable as
being intended for a particular commercial use. T.D. 85-38
explains that "where fabric which is readily identifiable as
being intended for a particular commercial use (e.g., towelling
or bed linen material) is merely cut to length or width, with the
edges then being either hemmed or overlocked...the foreign
territory or country which produced the fabric is the country of
origin and not the country where the fabric was cut. 50 FR 8714.
The phrase "readily identifiable as being intended for a
particular commercial use" was interpreted by Customs in HQ
086779 (April 25, 1990), a ruling letter concerning diapers, to
refer to evidence i.e., lines of demarcation or cutting marks
that would indicate that the fabric was to be made into diapers.
Customs has issued several rulings that deal with the
country of origin of surgical towels where we have consistently
ruled that the country of origin of surgical towels is the
country where the fabric is made. For instance, in HQ 086132
(February 22, 1990), Customs ruled that a surgical towel which
was cut from cloth, washed, seamed, folded and packaged in
Honduras was not substantially transformed there. In HQ 733601
(July 26, 1990), Customs ruled that surgical towels are not
substantially transformed in the country where the material is
cut to length and width, hemmed, washed and shrunk, and folded.
Customs concluded in HQ 087477 (August 30, 1990), that surgical
towels cut, sewn and finished in American Samoa from Chinese
cotton fabric was considered to be a product of China. The
rationale supporting this conclusion is that the cutting, sewing
and finishing operations performed to make a surgical towel are
not considered to be substantial manufacturing processes as
required by 19 CFR 12.130. Consistent with Customs position on
virtually the same processing which is done to make surgical
towels, the processing done to make surgical cloth would not be
considered a substantial manufacturing process. The country of
origin of the surgical cloth in your case would be the country
where the fabric is made.
HOLDING:
Pursuant to 19 CFR 12.130, the country of origin of the
surgical cloth for country of origin marking, quota, and duty
purposes would be the country where the fabric is made.
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,
Commercial Rulings Division