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HQ 733756

November 14, 1990

MAR-2-05 CO:R:C:V 733756 KG


Mr. Peter W. F. Wu
Moderntex International Corporation
Interlanche House, 1st Floor
39-41 Hankow Road
Tsim Sha Tsui
Kowloon, Hong Kong

RE: Country of origin marking of imported surgical cloth; cutting; hemming; 19 CFR 12,130; 086132; 733601; 087477.

Dear Mr. Wu:

This is in response to your letter of August 21, 1990, requesting information on the country of origin of imported surgical cloth. We also have a copy of a letter dated September 21, 1990, from Jamaica's Economic Development Agency that you furnished, which explained that U.S. Customs has the authority to make country of origin determinations with respect to articles to be imported into the U.S.


You order fabric from the People's Republic of China. The fabric is shipped to Jamaica. In Jamaica, the fabric is cut, sewn, labeled and packed to be sold in the U.S. as surgical cloth. A sample was submitted. The sample is a piece of white cotton cloth with a single hem on all four sides.


What is the country of origin of the imported surgical cloth?


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 204").

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.

In T.D. 85-38, published in the Federal Register on March 5, 1985, (50 FR 8714), which is the final rule document which established 19 CFR 12,130, there is a discussion of how the examples and the factors enumerated in the regulation are intended to operate. "Examples set forth in 19 CFR 12.130(e) are intended to give guidance to Customs officers and other interested parties. Obviously, the examples represent clear factual situations where the country of origin of the imported merchandise is easily ascertainable. The examples are illustrative of how Customs, given factual situations which fall within those examples, would rule after applying the criteria listed in 19 CFR 12.130(d). Any factual situation not squarely within those examples will be decided by Customs in accordance with the provisions of 19 CFR 12.130(b) and (d)." 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)(iv) states that a textile article will usually be a product of a particular country if the cutting of the fabric into parts and the assembly of those parts into the completed article has occurred in that country. However, 19 CFR 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 explains 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 width, with the edges then being either hemmed or overlocked...the foreign territory or country which produced
the fabric is the country of origin and not the country where the fabric was cut. 50 FR 8714. The phrase "readily identifiable as being intended for a particular commercial use" was interpreted by Customs in HQ 086779 (April 25, 1990), a ruling letter concerning diapers, to refer to evidence i.e., lines of demarcation or cutting marks that would indicate that the fabric was to be made into diapers.

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 instance, in HQ 086132 (February 22, 1990), Customs ruled that a surgical towel which was cut from cloth, washed, seamed, folded and packaged in Honduras was not substantially transformed there. In HQ 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. Customs concluded in HQ 087477 (August 30, 1990), that surgical towels cut, sewn and finished in American Samoa from Chinese cotton fabric was considered to be a product 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 as required by 19 CFR 12,130. Consistent with Customs position on virtually the same processing which is done to make surgical towels, the processing done to make surgical cloth would not be considered a substantial manufacturing process. The country of origin of the surgical cloth in your case would be the country where the fabric is made.


Pursuant to 19 CFR 12.130, the country of origin of the surgical cloth for country of origin marking, quota, and duty purposes would be the country where the fabric is made.

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).


John Durant
Commercial Rulings Division

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