HQ 0086429 - Country of origin of shop towels. - United States International Trade Commision Rulings

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HQ 086429

February 15, 1990

CLA-2 CO:R:C:G 086429 HP

CATEGORY: CLASSIFICATION

Mr. Murray Mehler
Mehler Textiles International, Ltd.
P.O. Box 877
Valley Stream, NY 11580

RE: Country of origin of shop towels.

Dear Mr. Mehler:

This is in reply to your letter of December 4, 1989, concerning the country of origin of shop towels. You question the assertion by our New York office that if you take cloth, by the yard, from Country A, and have it cut and sewn into shop towels in Country B, Country B is considered the country of origin for classification purposes.

Towels produced in more than one foreign country are subject to the country of origin requirements delineated in section 12.130 of the Customs Regulations (19 C.F.R. 12.130).
These regulations provide that:

... a textile product ... which consists of materials produced or derived from, or processed in, more than one foreign ... country shall be a product of that foreign ... country where it last underwent a substantial transformation.

12.130(b). A textile product undergoes a substantial transformation when it is "... transformed by means of substantial manufacturing or processing operations into a new and different article of commerce."

Section 12.130 of the regulations outlines the criteria used to determine the country of origin for textiles and textile products. Specifically, this provision of the regulations is considered in determining whether a textile product has undergone substantial manufacturing or processing operations, and what constitutes a new and different article of commerce. The factors considered are not exhaustive. In fact, "one or any combination of criteria may be determinative, and additional factors may be considered."

In determining whether merchandise has undergone substantial manufacturing or processing operations, we consider the (1) physical change in the material or the article; (2) time involved; (3) complexity of the operations; (4) level or degree of skill and/or technology required; and (5) value added to the article in each country. Your letter of December 4, 1989, does not provide the necessary information outlined in the regulations pertaining to the towels. We cannot properly determine the country of origin without detailed information specifically regarding the towels in question.

In addition, your request for a ruling should include detailed explanations of the processing undergone in each country the towels. You should also provide the exact amount of time incurred in cutting and assembly, as well as the exact costs incurred. Please include a listing of all machines used, a description of the production capabilities, information on the value added by each operation, and the amount of capitalization required in each country.

We have included several previous rulings on the country of origin of towel products. We hope they may be of assistance in outlining any future ruling request you may submit.

Sincerely,

JOHN DURANT, DIRECTOR
COMMERCIAL RULINGS DIVISION

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