HQ 0086693 - Country of origin; surgical towels - United States International Trade Commision Rulings

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HQ 086693
October 26, 1990

CLA-2 CO:R:C:G 086693 JS

CATEGORY: CLASSIFICATION

Lawrence R. Pilon
Hodes & Pilon
431 South Dearborn Street
Suite 405
Chicago, Illinois 60605-1121

RE: Country of origin; surgical towels

Dear Mr. Pilon:

This is in reference to your letters of March 5 and June 21, 1990, on behalf of Universal Joint Trading Co., Ltd., requesting a country of origin determination for surgical towels to be imported from the Philippines.

FACTS:

The samples at issue consist of two fabric pieces which represent the beginning and end stages of construction in the making of the subject towels. The first sample is a length of fabric measuring approximately 20 inches by 36 inches in width, woven and placed on large rolls in Taiwan. You state that the fabric is imported in lengths of 40 to 100 meters. The second sample is a towel measuring approximately 16 inches by 26 inches, which has hemmed and stitched edges. Each piece is made of a 100 percent cotton fabric which is dyed blue (in Taiwan) prior to importation.

Once the woven fabric is in the Philippines it undergoes the following processes: the fabric is cut and sewn, washed and dried, delinted, inspected, folded, and packaged. Furthermore, some or all of these activities are carried out in a "clean room" environment - designed to protect against contamination of the goods - which complies with the manufacturing standards for surgical towels set by medical buyers.

ISSUE:

Whether in terms of time, complexity and value added, the proposed operations of Country A were correctly determined to constitute a substantial manufacturing or processing transformation such that the completed surgical towels would be considered a manufacture of Country A for purposes of 19 CFR 12.130.

LAW AND ANALYSIS:

Although most of the manufacturing processes at issue occur in Country B, the weaving of the raw material in Country A is deemed to be the factor which contributes most to the creation of the final product. The fabric constructed in Country A is manufactured in such a way as to be readily identifiable in the industry as surgical toweling fabric; the special weave and the blue dye of the raw material further marks its intended use in the manufacture of these towels.

We also note that the cost of production and value added information you provided in your July 30 letter substantiates the designation of Country A as the country of origin, since the greater percentage of value added occurs in Country A rather than in the Philippines.

The processing which takes place in Country B does not indicate, as regards the time or level of skill required, that assembly requires anything more than a number of simple operations which do not constitute a substantial manufacturing or processing operation. See, HQ 086132 (February 2, 1990) and HQ 086971 (June 19, 1990)(cutting, hemming and stitching of fabric not considered substantial manufacturing process as compared to weaving of original surgical toweling material). Consequently, the towels have not been substantially transformed in Country B. 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 Country B 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.

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 Customs Regulations 19 CFR 177.9 (b)(1), which states that a ruling letter is issued on the assumption that all information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect. Should it be subsequently 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 that there is a change in the facts previously furnished, the country of origin determination may be affected. In such case, 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 Operations Division

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