MAR-2-05 CO:R:C:V 734896 AT
Jack Alsup, Esq.
Alsup & Alsup, Inc.
12 East 49th Street
New York, NY 10017
RE: Country of origin of surgical towels created from Indian
fabric by cutting, folding and hemming in Mexico; assembly;
substantial transformation; 19 CFR 12.130
Dear Mr. Alsup:
This is in response to your letter dated November 16, 1992,
on behalf of Esperanza Industries, Inc. (Esperanza), requesting a
ruling on the country of origin of imported surgical towels from
Mexico. A sample was submitted with your letter for review. We
regret the delay in responding.
FACTS:
You state that Esperanza intends to import 100% woven cotton
fabric surgical towels from Mexico. You also state that the
production of the surgical towels will involve processing
operations performed in two countries, India and Mexico.
According to your letter Esperanza will purchase and import 100%
woven cotton fabric "Huckaback" which is manufactured in India.
The fabric will be imported in rolls, 100 meters X 58 inches and
will be shipped in-bond to Mexico. In Mexico the following
operations will be performed to create the finished towels:
1. Fabric undergoes incoming Q.A. inspection.
2. Fabric is cut into 17" X 28" pieces using electric
knives and special rolling and stretching equipment.
3. Individual pieces are sewn with 1/4" hem on at least
three edges.
4. On-line inspection are required during sewing process.
5. Product goes through a delinting procedure that uses
very high vacuum equipment.
6. Another Q.A. inspection.
7. Product is folded using approved aseptic technique.
8. Product is again inspected.
9. Product is placed in immediate package.
10. Product is packaged for shipment.
ISSUE:
What is the country of origin of the imported surgical
towels processed in the manner described above?
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 country of origin marking determinations
for textiles and textile products. 19 CFR 12.130(b), provides
that a textile product that is processed in more than one country
or territory shall be a product of that country or territory
where it last underwent a substantial transformation. A textile
product will be considered to have undergone a substantial
transformation if it has been transformed by means of substantial
manufacturing or processing operations into a new and different
article of commerce. The factors to be applied in determining
whether or not a manufacturing operation is substantial are set
forth in 19 CFR 12.130(d) and (e).
Section 12.130(e)(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.
Customs has previously held that the country of origin of
surgical towels is the country where the fabric for the surgical
towels is manufactured. In HQ 088078 (November 14, 1990),
Customs stated that "although most of the manufacturing processes
at issue occur in Mexico, the weaving of the raw materials in
China is deemed to be the factor which contributes most to the
creation of the final product. The fabric constructed in China
is manufactured in such a way as to be readily identifiable in
the industry as surgical toweling fabric; the special weave and blue dye of the raw material further marks its intended use in
the manufacture of these towels". Accord HQ 950789 (March 24,
1992). See also, HQ 733601 (July 26, 1990), which held that
toweling cut, hemmed, washed, shrunk and folded in Mexico of the
Philippines does not constitute a substantial transformation, so
the country of the surgical towels is China, the country where
the fabric was manufactured.
Similarly, in this case, we find that the Indian fabric
which is inspected, cut to length and width, hemmed, folded and
packaged in Mexico remains a product of the country where the
fabric was manufactured, India.
Since we have determined that the country of origin of the
imported surgical towels is India, it is acceptable to mark the
article with the phrase "Made in India" provided that the marking
is conspicuous, legible and permanent (factors which we cannot
determine due to no marked sample was submitted for our review.
The phrase "Finished in Mexico" (or similar phrase), is not
required to be added to the origin label.
HOLDING:
The country of origin of the imported surgical towels
processed in the manner described above for marking and quota
purposes is India where the fabric is manufactured.
The marking "Made in India" is an acceptable marking for the
surgical towels provided that the marking is conspicuous, legible
and permanent. The phrase "Finished in Mexico" (or similar
phrase) is not required to be added to the origin label.
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 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 177.2, Customs
Regulations (19 CFR 177.2).
Sincerely,
John Durant, Director