HQ 0733974 - Country of origin marking of imported surgical towels - United States International Trade Commision Rulings

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HQ 733974
March 14, 1991

MAR-2-05 CO:R:C:V 733974 KG

CATEGORY: MARKING

Mr. Arthur P. Krensky
Ragus International
2850 East 3300 South
P.O. Box 9407
Salt Lake City, Utah 84109

RE: Country of origin marking of imported surgical towels

Dear Mr. Krensky:

This is in response to your letter of November 30, 1990, requesting reconsideration of Headquarters Ruling ("HQ") 733848 (October 30, 1990), which modified HQ 555590 (May 21, 1990), both involving imported surgical towels.

FACTS:

Customs ruled in HQ 733848 that the country of origin of the surgical towels you import is the country where the fabric is made. You pointed out in your letter that your processing in a second country includes fabric conversion, which involves taking grey fabric and bleaching and dying it, as well as cutting, hemming, washing, folding and packaging. This description of the processing you undertake was included in the factual description included in HQ 733848.

ISSUE:

Whether the processing described above would constitute a substantial transformation pursuant to 19 CFR 12.130.

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 making country of origin determinations for textile and textile products subject to section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854)"("section

Pursuant to 19 CFR 12.130, the standard of substantial transformation governs the determination of the country of origin where textiles and textile products are processed in more than one country. The country of origin of textile products is deemed to be that foreign territory, country, or insular possession where the article last underwent a substantial transformation. Substantial transformation is said to occur when the article has been transformed into a new and different article of commerce by means of substantial manufacturing or processing operations.

Surgical towels are made out of cloth known as "huckaback" or "huck". A dictionary of textile terms published by Dan River Inc. defines "huckaback" or "huck" as cloth with a honeycomb effect; the filling yarns are slackly twisted to aid absorption. ... very absorbent, durable, serviceable for towels and will withstand rough use. In HQ 088078 (November 14, 1990), Customs ruled that the country where the fabric for the surgical towel was made was considered the country of origin of the surgical towel. In that ruling, Customs stated that; "Although most of the manufacturing processes at issue occur in Mexico, the weaving of the raw material 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 the blue dye of the raw material further marks its intended use in the manufacture of these towels." In this case, it is similarly the huckaback fabric rather than the subsequent processing which imparts to the surgical towels its identity, commercial use and fundamental character. Although the fabric in your case is further processed by bleaching and dyeing, these additional steps do not alter the result. In this regard, Customs held in C.S.D. 90-29 (November 6, 1989), that desizing, bleaching, dyeing, printing, cutting to size and hemming of toweling fabric was not a substantial transformation because the processing was not substantial. The processing involved in this case is virtually identical to the processing of toweling involved in C.S.D. 90-29.

Based on the above considerations, we affirm the conclusions reached in HQ 733848 and find that no substantial transformation occurs in the second country where the processing includes bleaching and dyeing, cutting, hemming, washing, folding and packaging. The country of origin of the surgical towels is the country in which the fabric is made.

HOLDING:

The conclusion reached in HQ 733848 is affirmed.

Sincerely,

John Durant
Director,
Commercial Rulings Division

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