HQ 0734166 - Country of origin marking requirements for surgical towels woven in Costa Rica from yarn from Brazil, Pakistan, and China; 19 CFR 12.130 - United States International Trade Commision Rulings

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HQ 734166

September 3, 1991
MAR-2-05 CO:R:C:V RSD

CATEGORY: MARKING

Alan D. Meltzer, Esq.
Coudert Brothers
200 Park Avenue
New York, N.Y. 10166

RE: Country of origin marking requirements for surgical towels woven in Costa Rica from yarn from Brazil, Pakistan, and China; 19 CFR 12.130

Dear Mr. Meltzer:

This is in response to your letter dated May 10, 1991, on behalf of your client, Keilei International, Inc. ("Keilei"), requesting a ruling on the country of origin marking requirements for surgical towels woven from yarn in Costa Rica. We have received 2 sample bundles of yarn and 3 sample finished surgical towels for our review.

FACTS:

Keilei plans to import surgical towels into the U.S. from Costa Rica. The fabric for the surgical towels will be woven in Costa Rica from dyed cotton yarn. The yarn will be from Brazil, Pakistan, and China. After the cotton panels are woven from the yarn, the panels will be cut, sewn, desized, delinted, purified, wrapped, and packed in Costa Rica. The finished towels have the dimensions of 17 inches by 30 inches.

ISSUE:

What is the country of origin of surgical towels woven from yarn in Costa Rica?

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. Customs has issued several rulings that deal with the country of origin of surgical towels where we have consistently ruled that the country of origin of surgical towels is the country where the fabric is made. For example, in 733601 (July 26, 1990), Customs ruled that surgical towels are not substantially transformed in the country where the material is cut to length and width, hemmed, washed and shrunk, and folded. In HQ 087477 (August 30, 1990), we concluded that surgical towels cut, sewn, and finished in American Samoa from Chinese cotton fabric are considered to be products of China. The rationale supporting this conclusion is that the cutting, sewing, and finishing operations performed to make a surgical towel are not considered to be substantial manufacturing processes required by 19 CFR 12.130.

Recently, in HQ 733974 (March 15, 1991), we noted that surgical towels are made out of a 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 yarn are slackly twisted to aid absorption. ... very absorbent, durable, serviceable for towels and will withstand rough use. We pointed out that it is the huckaback fabric rather than the subsequent processing which imparts to the surgical towels its identity, commercial use, and fundamental character.

19 CFR 12.130(e)(1)(iii) indicates that an article or material usually will be a product of a particular foreign territory or country where it is has undergone, prior to importation into the U.S., an operation in that country such as weaving, knitting, or forming fabric. Customs has also ruled that the weaving of the raw material for a surgical towel was the factor that contributes most to the creation of the final product. See HQ 733974 (March 15, 1991). In HQ 555517 (May 21, 1990), Customs also ruled that the country of origin of a surgical towel which is woven in Barbados from yarn from China or Pakistan, and cut to length and width and hemmed in Barbados is Barbados. See also HQ 555719 (November 5, 1990). In this instance the fabric for the surgical towels is woven from yarn in Costa Rica. In accordance with 19 CFR 12.130(e)(1)(iii) the country of origin of the surgical towels would be Costa Rica. We also note that in addition to weaving the fabric, the towels will undergo other less significant operations such as cutting, sewing, desizing, delinting, purifying, wrapping, and packing in Costa Rica. It is our understanding that the towels will be basically completed in Costa Rica. Accordingly, the country of origin of the imported surgical towels for quota and country of origin markings purposes is Costa Rica.

HOLDING:

The country of origin of surgical towels woven in Costa Rica for country of origin marking and quota purposes is Costa Rica.

Sincerely,

John Durant, Director
Commercial Rulings Division

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