Country of Origin of Shop Towels Cut and Hemmed in the U.S. from Foreign Fabric

HQ 955855 February 23, 1994 CLA-2:CO:R:C:G 955855 PR CATEGORY: Classification J. Epstein, President W. N. Epstein & Co., Inc. P.O. 45187 St. Louis. MO. 63145 RE: Country of Origin of Shop Towels Cut and Hemmed in the U.S. from Foreign Fabric Dear Sir or Madame: This is in reply to your inquiry of January 14, 1994, on behalf of Schroeder & Tremayne, Inc., of St. Louis, Mo., concerning the country of origin of certain shop towels. Our ruling on the matter follows. FACTS: Fabric, wholly of cotton, which we assume to be woven (osnaburg), is purchased in rolls from foreign suppliers and imported into this country by someone other than Schroeder & Tremayne. In the United States, Schroeder & Tremayne will cut the fabric to size, serge and sew the edges, and dye the fabric red. The finished product is an 18 inch by 18 inch shop towel which will be put up in retail packaging. ISSUE: The issue presented is, in regard to country of origin, how should the finished shop towels be marked. LAW AND ANALYSIS: Section 12.130, Customs Regulations (19 CFR 12.130) provides, in pertinent part, that a textile or textile product which consists of materials processed in more than one foreign country shall be a product of the country where it last underwent a substantial transformation. A textile or textile product will be considered to have undergone a substantial transformation if it has been transformed by means of substantial manufacturing or processing operations into a new and different article of commerce.  -2- Although 12.130 refers to products processed in more than one foreign country, the same principles for determining origin hold true for goods processed in more than one country when one of those countries is the United States. In this regard, the osnaburg fabric has not undergone a substantial transformation. The fabric is primarily used commercially to make shop towels or the like and the processing in the United States, cutting and hemming, is not considered to be a substantial manufacturing or processing operation. Accordingly, the shop towels must be marked to indicate that they were produced or made in whichever country the fabric was formed. If it is intended to indicate the country of origin only on the packaging and not on the towels themselves, 134.34(a), Customs Regulations (19 CFR 134.34(a)), requires that authorization must be give by a district director of Customs for imported articles to be repacked after the imported merchandise has been released from Customs custody. Further information in this regard may be obtained from the office of the District Director of Customs, 4477 Woodson Road, St. Louis, Mo. 63134 (314 428-2662). HOLDING: The shop towels are products of the country in which the fabric was formed and should be marked accordingly. This ruling is issued pursuant to the provisions of Part 177 Customs Regulations (19 CFR Part 177). The holding in this ruling only applies to the specific factual situation and the merchandise identified in the ruling request. Should it be determined that the information furnished is not accurate or complete, the ruling may be subject to modification or revocation. A change in the facts may affect the holding. In such an event, it is recommended that a new ruling request be submitted. Sincerely, John Durant, Director Commercial Rulings Division