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HQ 088785


July 1, 1991

CLA-2 CO:R:C:T 088785 CC

CATEGORY: CLASSIFICATION

TARIFF NO.: 6307.10.2005

Mr. William J. LeClair
Administrative and Regulatory Advisor
Trans-Border Customs Services, Inc.
One Trans-Border Drive
P.O. Box 800
Champlain, NY 12919

RE: Industrial towels; classifiable as shop towels; processing operations in Canada not substantial; country of origin is China

Dear Mr. LeClair:

This letter is in response to your inquiry of February 27, 1991, on behalf of Fonora Textile, Inc., requesting tariff classification and country of origin determinations for industrial towels. Samples were submitted for examination.

FACTS:

The merchandise at issue is industrial towels. They are made in China of 100 percent cotton fabric of nonpile construction; the fabric is plain woven and coarse. In China the fabric is cut into squares, 17 inches by 17 inches, and hemmed on all sides. The towels are sent to Canada where they are washed, bleached, and chemically treated.

ISSUE:

How is the merchandise at issue classified?

What is the country of origin for the merchandise at issue?

LAW AND ANALYSIS:

Classification

Heading 6307, HTSUSA, provides for other made up articles. Subheading 6307.10.2005, HTSUSA, provides for cotton shop towels dedicated for use in garages, filling stations and machine shops. The merchandise at issue is made of plain woven coarse fabric of nonpile construction. It is the class or kind of article known as shop towels. Therefore it is classifiable under subheading 6307.10.2005, HTSUSA.

Country of Origin

Section 12.130 of the Customs Regulations (19 CFR 12.130) is applicable to the merchandise at issue. Section 12.130(b) of the Customs Regulations 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.

Section 12.130(d) of the Customs Regulations sets forth criteria in determining whether a substantial transformation of a textile product has taken place. This regulation states that these criteria are not exhaustive; one or any combination of criteria may be determinative, and additional factors may be considered.

Section 12.130(d)(1) states that a new and different article of commerce will usually result from a manufacturing or processing operation if there is a change in:

(i) Commercial designation or identity,
(ii) Fundamental character or
(iii) Commercial use.

Section 12.130(d)(2) of the Customs Regulations states that in determining whether merchandise has been subjected to substantial manufacturing or processing operations, the following will be considered:

(i) The physical change in the material or article as a result of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(ii) The time involved in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iii) The complexity of the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(iv) The level or degree of skill and/or technology required in the manufacturing or processing operations in each foreign territory or country, or insular possession of the U.S.

(v) The value added to the article or material in each foreign territory or country, or insular possession of the U.S., compared to its value when imported into the U.S.

Treating chemically, washing, and bleaching the towels in Canada does not create a new and different article of commerce there. The last substantial transformation of this merchandise occurs in China, where the fabric is made. Therefore the country of origin for the merchandise at issue is China.

You have also inquired whether towels brought into a Foreign Trade Zone (FTZ), and processed there, would be a U.S. product on withdrawal from the FTZ.

Section 146.63(d), Customs Regulations, controls. That section restricts processing in a zone of textiles or textile articles that are intended to be withdrawn for entry into the Customs territory of the United States.

The same rules that govern whether an article is a product of the United States govern in a zone. The United States Federal Trade Commission has the responsibility for determining whether an article can be marked "made in the United States."

You have also asked how this merchandise should be marked. This question has been referred to our Value and Marking Branch and will be the subject of a separate reply.

HOLDING:

The merchandise at issue is classified under subheading 6307.10.2005, HTSUSA, which provides for other made up articles, other, shop towels dedicated for use in garages, filling stations and machine shops, of cotton. The rate of duty is 10.5 percent ad valorem, and the textile category is 369.

The country of origin for the merchandise at issue is China.

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

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