CLA-2 CO:R:C:G 088078 JS
William A. Zeitler
Bell, Boyd & Lloyd
1615 L Street, NW
Washington, D.C.
20036-5601
RE: Request for reconsideration of HQ 086971; surgical towels
Dear Mr. Zeitler:
By letter dated July 30, 1990, you requested
reconsideration, on behalf of your client Parkins, Inc., of HQ
086971 (June 19, 1990). HQ 086971 determined that China, where
raw material to be used in the manufacture of surgical towels was
woven and dyed, is the country of origin pursuant to 19 CFR
12.130. Upon further review, that ruling is determined to be
correct.
FACTS:
The merchandise at issue are surgical towels constructed of
100 percent cotton fabric which is woven, dyed and placed on
rolls in China. Thereafter the goods are exported to Mexico,
where they undergo the following processes: the fabric is cut
and sewn, washed and dried, delinted, inspected, folded, and
packaged. Furthermore, some or all of these activities are
carried out in a special environment designed to protect against
contamination of the goods, which complies with the manufacturing
standards for surgical towels set by medical buyers.
ISSUE:
Whether the additional information provided regarding the
time, complexity and value added pursuant to the operations
performed in Mexico constitute a manufacturing or processing
operation resulting in a substantial transformation for purposes
of 19 CFR 12.130.
LAW AND ANALYSIS:
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.
We also note that the cost of production and value added
information you provided in your July 30 letter substantiates the
designation of China as the country of origin, since the greater
percentage of value added occurs in China rather than in Mexico.
The processing which takes place in Mexico does not
indicate, as regards the time or level of skill required, that
assembly requires anything more than a number of simple
operations which do not constitute a substantial manufacturing or
processing operation. See, HQ 086132 (February 2, 1990) and HQ
086971 (June 19, 1990)(cutting, hemming and stitching of fabric
not considered substantial manufacturing process as compared to
weaving of original surgical toweling material). The machines
used in weaving the fabric are, as you state, operated on a 24
hour basis, as opposed to the lessor time required for the
processing functions conducted in Mexico. Furthermore, the
detailed information you provide regarding the Mexican
manufacturing steps does not result in anything more than the
cutting, hemming and stitching of specialized fabric as
contemplated in the rulings above.
HQ 555590 (May 21, 1990), which you cite as precedent in
part D of your letter, has been modified by HQ 733848 (October
30, 1990) to state that the country of origin for surgical
toweling is the country where the fabric is made, as indicated by
a long line of precedent stated therein.
Consequently, the towels have not been substantially
transformed in Mexico. Wherever the fabric is produced is
therefore the country of origin pursuant to 19 CFR 12.130 for
quota and country of origin marking purposes.
HOLDING:
The assembly operations performed in Mexico do not
constitute a substantial transformation as required by 19 CFR
12.130. The country of origin for the merchandise at issue is
China, and a Chinese visa must accompany the goods.
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 Customs
Regulations 19 CFR 177.9 (b)(1), which states that a ruling
letter is issued on the assumption that all information furnished
in connection with the ruling request and incorporated therein,
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 that there
is a change in the facts previously furnished, the country of
origin determination may be affected. In such case, 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
Commercial Operations Division