HQ 956844 - Country of origin determination of towelling; 19 CFR 12.130(e)(2)(ii); fabric readily identifiable for a particular commercial use - United States International Trade Commision Rulings

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HQ 956844

November 25, 1994

CLA-2 CO:R:C:T 956844 jb

CATEGORY: CLASSIFICATION

Mr. Lenny Tu
Bochang Towels Mfg. Co., LTD.
3F-1, No. 9, Lane 768
Pa-Te Road, Sec. 4
Taipei, Taiwan
Republic of China

RE: Country of origin determination of towelling; 19 CFR 12.130(e)(2)(ii); fabric readily identifiable for a particular commercial use

Dear Mr. Tu:

This is in regard to your request, dated July 19, 1994, for a country of origin determination of certain towels.

FACTS:

The merchandise at issue consists of towelling in the form of washcloths which are dyed and woven (separation lines are woven into the fabric to indicate cutting positions) in country A and cut and sewn in country B. The merchandise is then shipped to the United States.

LAW AND ANALYSIS:

Section 12.130 of the Customs Regulations (19 CFR 12.130) sets forth the principles of country of origin for textiles and textile products subject to Section 204 of the Agricultural Act of 1956, as amended (7 U.S.C. 1854).

Pursuant to 19 CFR 12.130(b), the standard of substantial transformation governs the country of origin determination 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 or country 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.

The factors to be applied in determining whether or not a manufacturing operation is substantial are set forth in 19 CFR 12.130(d). Section 12.130(e)(1) describes manufacturing or processing operations from which an article will usually be considered a product of the country in which those operations occurred. Section 12.130(e)(1) provides, in part, that an article or material usually will be a product of a particular foreign territory or country when there has been:

(iii) Weaving, knitting or otherwise forming fabric; (iv) Cutting of fabric into parts and the assembly of those parts into the completed article;

Section 12.130(e)(2)(ii) states that a material will usually not be considered to be a product of a particular foreign country by virtue of merely having undergone cutting to length or width and hemming or overlocking fabrics which are readily identifiable as being intended for a particular commercial use. T.D. 85-38, published in the Federal Register on March 5, 1985, (50 FR 8714), the final rule document which established 19 CFR 12.130, states that :
where fabric which is readily identifiable as being intended for a particular commercial use (e.g., towelling or bed linen material) is merely cut to length or to width, with the edges then being either hemmed or overlocked... the foreign territory or country, or insular possession, which produced the fabric is the country of origin, and not the country where the fabric was cut. (Emphasis added)

In HQ 733746, dated November 14, 1990, concerning "surgical cloth", Customs determined that the country of origin of the surgical cloth was the country in which the fabric was made and not the country where the fabric was cut. The latter operation was not deemed to be a substantial manufacturing process. That ruling stated that lines of demarcation or cutting marks were evidence that the fabric was intended for a particular commercial use (referring to HQ 086779, dated April 25, 1990, addressing diapers, wherein Customs interpreted the significance of the term "readily identifiable as being intended for a particular commercial use"). See also, HQ 086834, dated November 15, 1994; HQ 733601, dated July 26, 1990.

In the case of the subject merchandise, the fabric is woven in country A with lines of demarcation indicating where the fabric is to be cut. In country B the fabric is cut and the four edges are overlocked. As explicitly stated in section 12.130(e)(2)(ii) of the regulations and in T.D. 85-38, the cutting and sewing operations performed in country B are not sufficient to confer country of origin. Country A, where the fabric is woven , is the country of origin of the subject towelling.

HOLDING:

The country of origin of the submitted merchandise is country A. It is the weaving process, where the demarcation lines are woven into the fabric to indicate the cutting positions, which evidences that the fabric is readily identifiable as being intended for a particular commercial use, in this case, towelling.

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 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 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 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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