HQ 0086971 - Cotton Surgical Towels - United States International Trade Commision Rulings

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HQ 086971
June 19, 1990

CLA-2 CO:R:C:G 086971 JS

CATEGORY: COUNTRY OF ORIGIN

William Zeitler
Bell, Boyd & Lloyd
1615 L Street, N.W.
Suite 1200
Washington, D.C.
20036-5601

RE: Cotton Surgical Towels

Dear Mr. Zeitler:

This is in response to your letter of April 9, 1990, on behalf of Parkins, Inc., requesting a country of origin determination for cotton surgical towels to be imported from Mexico.

FACTS:

The samples at issue consist of five fabric pieces which represent various stages of construction in the making of the subject towels. Each piece is made of a 100 percent woven cotton fabric which is dyed blue.

The first sample is a length of fabric measuring approximately 27 by 37 inches. The second and third pieces are stated to be towels in their intermediate level of production, i.e. "after cutting" and "after cutting with partial hemming." The "after cutting" sample measures approximately 18 by 62 inches and is identical in appearance to the first sample except with respect to its size. The fourth and fifth samples are identical pieces labeled "finished", which are distinguished from the other samples by their hemmed and stitched edges.

You state that the fabric rolls which are used to make these surgical towels are produced in Country A. The fabric is then intended for shipment to Mexico via Country B. In Mexico, the fabric will then be cut and sewn into towels, and washed, dried, inspected, folded, and packaged. The finished product is sold to various hospitals and medical facilities throughout the United States.

ISSUE:

Whether cutting, hemming and sewing in Mexico of fabric woven in Country A constitutes a substantial manufacturing or processing transformation such that the completed surgical towels would be considered a manufacture of Mexico for purposes of 19 CFR 12.130.

LAW AND ANALYSIS:

The country of origin of textiles and textile products is determined by the application of Section 12.130 of the Customs Regulations. In determining the country of origin of textile and textile products which consist of materials produced or derived from, or processed in, more than one country, the imported article is considered to be a product of the country in which the last substantial transformation took place. A substantial transformation of a textile or textile product is said to occur if a commodity undergoes a transformation by means of substantial manufacturing or processing into a new and different article of commerce.

Section 12.130 (d) establishes criteria for determining whether an article has been substantially transformed. However, the criteria set forth in 19 CFR 12.130(d) are not exhaustive; one or any combination of these criteria may be determinative, and additional factors may be considered.

In accordance with 19 CFR 12.130(d)(2), the following factors are to be considered in determining whether merchandise has been subjected to substantial manufacturing or processing operations: the physical change in the material or article, the time involved in the manufacturing or processing operations, the complexity of the operations, the level or degree of skill and/or technology required, and the value added to the article.

Under 19 CFR 12.130(e)(v), an article is a product of a particular country if it has undergone in that country a substantial assembly by sewing and/or tailoring of all cut pieces of apparel articles which have been cut from fabric in another foreign country, into a completed garment.

According to T.D. 85-38 (19 Cust. Bull. 58, 70; 50 FR 8714), the final document rule establishing 19 CFR 12.130:

[T]he assembly of all the cut pieces of a garment usually is a substantial manufacturing process that results in an article with a different name, character or use than the cut pieces. It should be noted that not all assembly operations of cut garment pieces will amount to a substantial transformation of those pieces. Where either
less than a complete assembly of all cut pieces of a garment is performed in one country, or the assembly is a relatively simple one, then Customs will rule on the particular factual situations as they arise, utilizing the criteria in section 12.130(d).

Based on the information provided, the hemming and sewing of the edges of fabric to be used as toweling does not require any tailoring.

Rather, the facts indicate that the finishing of the cut parts is a simple assembly operation which does not involve a high degree of skill and workmanship. The fibers which make up the material for the towels at issue are woven and rolled and ready for cutting in Country A. This process, in comparison to the simple cutting, hemming and sewing operation to take place in Mexico, is more complex and valuable than the latter.

We also note that the weaving and related operations in Country A comprise the same percentage of value added as do the cutting and related operations performed in Mexico. However, absent any additional data concerning the complexity of the cutting and sewing operations vis a vis the weaving operation, Customs deems weaving to be the more complex of the two.

Since there is nothing to suggest that the hemming of the fabric is in any degree a complex operation as regards, for example, the time or level of skill required, or that the assembly requires anything more than a simple folding over of the edges by machine stitching, it is Customs view that the towels have not undergone a substantial manufacturing or processing operation. See also, HRL 082747 (February 23, 1988), concerning the country of origin of jeans. Consequently, the towels have not been substantially transformed in Mexico. Wherever the fabric is produced is therefore the country of origin pursuant to 19 CFR 12.130 for quota and country of origin marking purposes.

HOLDING:

The assembly operations performed in Mexico do not constitute a substantial transformation as required by 19 CFR 12.130. The country of origin for the merchandise at issue is Country A, and a Country A visa must accompany the goods when shipped to another country.

Sincerely,

John Durant, Director
Commercial Operations Division

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