[Federal Register Volume 90, Number 63 (Thursday, April 3, 2025)]
[Notices]
[Pages 14660-14662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-05731]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
Notice of Issuance of Final Determination Concerning Alcohol Prep
Pads
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security.
ACTION: Notice of final determination.
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SUMMARY: This document provides notice that U.S. Customs and Border
Protection (CBP) has issued a final determination concerning the
country of origin of alcohol prep pads. Based upon the facts presented,
CBP has concluded that the subject alcohol prep pads would be the
product of Taiwan.
DATES: The final determination was issued on January 17, 2025. A copy
of the final determination is attached. Any party-at-interest, as
defined in 19 CFR 177.22(d), may seek judicial review of this final
determination no later than May 5, 2025.
FOR FURTHER INFORMATION CONTACT: Ani Mard, Valuation and Special
Programs Branch, Regulations and Rulings, Office of Trade, at (202)
325-0727.
SUPPLEMENTARY INFORMATION: Notice is hereby given that on January 17,
2025, CBP issued a final determination concerning the country of origin
of alcohol prep pads for purposes of title III of the Trade Agreements
Act of 1979. This final determination, HQ H340712, was issued at the
request of Medline Industries, LP, under procedures set forth at 19 CFR
part 177, subpart B, which implements Title III of the Trade Agreements
Act of 1979, as amended (19 U.S.C. 2511-18). In the final
determination, CBP has concluded that, based upon the facts presented,
the country of origin of the alcohol prep pads is Taiwan, the country
in which the fabric-making process occurs.
Section 177.29, CBP Regulations (19 CFR 177.29), provides that a
notice of final determination shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.
HQ H340712
January 17, 2025
OT:RR:CTF:VS H340712 a.m.
Category: Origin
Lawrence R. Pilon, Rock Trade Law LLC, 134 N LaSalle Street,
Chicago, IL 60602
Re: U.S. Government Procurement; Title III, Trade Agreements Act of
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country
of Origin of Alcohol Prep Pads
Dear Mr. Pilon:
This is in response to your request, dated July 9, 2024, on
behalf of Medline Industries, LP (``Medline''), for a final
determination concerning the country of origin of alcohol prep pads
pursuant to Title III of the Trade Agreements Act of 1979 (``TAA''),
as amended (19 U.S.C. 2511 et seq.), and subpart B of Part 177, U.S.
Customs and Border Protection (``CBP'') Regulations (19 CFR 177.21,
et seq.). Medline is a party-at-interest within the meaning of 19
CFR 177.22(d)(1) and 177.23(a) and is therefore entitled to request
this final determination.
Facts
The merchandise at issue consists of disposable, sterile,
single-use nonwoven textile alcohol prep pads, classified under
subheading 5603.12.00, Harmonized Tariff Schedule of the United
States (``HTSUS''), imported individually packaged, ready for use,
and saturated with a sterile solution consisting of 70% isopropyl
alcohol and 30% water. The prep pads will be imported in two sizes:
medium measuring 1\1/8\'' x 2\3/8\'', and large measuring 1\3/4\'' x
3''. The merchandise is designed and intended for use in hospitals,
surgery centers, and similar settings where healthcare services are
provided.
The manufacturing process is described as follows:
[[Page 14661]]
Product Design and Development (United States)
In the United States, Medline performs the design research,
product development, and materials selection.
Production of Nonwoven Fabric (Taiwan)
The manufacturing of the synthetic nonwoven filament fabric
takes place in Taiwan. This process consists of melting primary
forms of polypropylene plastic polymer. The polymer is then extruded
into filaments that are spun and bonded into a sheeted web of
nonwoven filament fabric textile material that is formed into rolls.
Cutting, Saturation, Packaging (China)
In China, the fabric is unrolled and cut into individual
rectangular pieces of fabric weighing 45 g/m\2\ which are folded to
create a two-ply pad. The individual pads are then saturated with a
sterile solution consisting of 70% by weight isopropyl alcohol and
30% purified water, prepared in China. Lastly, the individual prep
pads are packaged into individual packets and then boxed into cases
containing either 1,000 or 3,000 individual prep pads.
Issue
What is the country of origin of the subject alcohol prep pads
for purposes of U.S. Government procurement?
Law & Analysis
CBP issues country of origin advisory rulings and final
determinations as to whether an article is or would be a product of
a designated country or instrumentality for the purpose of granting
waivers of certain ``Buy American'' restrictions in U.S. law or
practice for products offered for sale to the U.S. Government,
pursuant to subpart B of Part 177, 19 CFR 177.21 et seq., which
implements Title III, Trade Agreements Act of 1979, as amended (19
U.S.C. 2511-2518).
CBP's authority to issue advisory rulings and final
determinations stems from 19 U.S.C. 2515(b)(1), which states:
For the purposes of this subchapter, the Secretary of the
Treasury shall provide for the prompt issuance of advisory rulings
and final determinations on whether, under section 2518(4)(B) of
this title, an article is or would be a product of a foreign country
or instrumentality designated pursuant to section 2511(b) of this
title.
Emphasis added.
The Secretary of the Treasury's authority mentioned above, along
with other customs revenue functions, are delegated to the Secretary
of Homeland Security via Treasury Department Order (TO) 100-20
``Delegation of Customs revenue functions to Homeland Security,''
dated October 30, 2024, and are subject to further delegations to
CBP (see also 19 CFR part 177, subpart B).
The rule of origin set forth in 19 U.S.C. 2518(4)(B) states:
An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.
See also 19 CFR 177.22(a).
In rendering advisory rulings and final determinations for
purposes of U.S. Government procurement, CBP applies the provisions
of subpart B of Part 177 consistent with the Federal Acquisition
Regulation (``FAR''). See 19 CFR 177.21. In this regard, CBP
recognizes that the FAR restricts the U.S. Government's purchase of
products to U.S.-made or designated country end products for
acquisitions subject to the TAA. See 48 CFR 25.403(c)(1).
The FAR, 48 CFR 25.003, defines ``designated country end
product'' as:
a WTO GPA [World Trade Organization Government Procurement
Agreement] country end product, an FTA [Free Trade Agreement]
country end product, a least developed country end product, or a
Caribbean Basin country end product.
Section 25.003 defines ``WTO GPA country end product'' as an
article that:
(1) Is wholly the growth, product, or manufacture of a WTO GPA
country; or
(2) In the case of an article that consists in whole or in part
of materials from another country, has been substantially
transformed in a WTO GPA country into a new and different article of
commerce with a name, character, or use distinct from that of the
article or articles from which it was transformed. The term refers
to a product offered for purchase under a supply contract, but for
purposes of calculating the value of the end product includes
services (except transportation services) incidental to the article,
provided that the value of those incidental services does not exceed
that of the article itself.
Once again, we note that the fabric for the alcohol prep pads is
produced in Taiwan while the cutting, saturation, and packaging
takes place in China. Taiwan is a TAA-designated country, and China
is not.
The rules of origin for textile and apparel products for
purposes of the customs laws and the administration of quantitative
restrictions are governed by 19 U.S.C. 3592, unless otherwise
provided for by statute. These provisions are implemented in the CBP
Regulations at 19 CFR 102.21. Section 3592 has been described as
Congress's expression of substantial transformation as it relates to
textile and apparel products. A textile or apparel product, in
relevant part, includes any good classifiable in Chapters 50 through
63, HTSUS. See 19 CFR 102.21(a)(5). Therefore, as the alcohol prep
pads are classified under subheading 5603.12.00, HTSUS, the country
of origin will be determined by sequential application of paragraphs
(1) through (5) of section 102.21 (19 CFR 102.21(c)(1)-(5)).
Paragraph (c)(1) of section 102.21 (19 CFR 102.21(c)(1)) states
that ``[t]he country of origin of a textile or apparel product is
the single country, territory, or insular possession in which the
good was wholly obtained or produced.'' The subject alcohol prep
pads are produced in two different countries: (1) Taiwan (where the
fabric is produced), and (2) China (where the fabrics are cut, and
solution is added). Therefore, 19 CFR 102.21(c)(1) is inapplicable.
Paragraph (c)(2) of section 102.21 (19 CFR 102.21(c)(2)) states
that ``the country of origin of the good is the single country,
territory, or insular possession in which each foreign material
incorporated in that good underwent an applicable change in tariff
classification, and/or met any other requirement, specified for the
good in paragraph (e) of this section.'' Paragraph (e) of section
102.21 (19 CFR 102.21(e)) states, in relevant part, that ``[t]he
following rules will apply for purposes of determining the country
of origin of a textile or apparel product under paragraph (c)(2) of
this section:''
(1) Except for fabric of wool or of fine animal hair, a change
from greige fabric of heading 5602 through 5603 to finished fabric
of heading 5602 through 5603 by both dyeing and printing when
accompanied by two or more of the following finishing operations:
bleaching, shrinking, fulling, napping, decating, permanent
stiffening, weighting, permanent embossing, or moireing; or
(2) If the country of origin cannot be determined under (1)
above, a change to heading 5602 through 5603 from any heading
outside that group, provided that the change is the result of a
fabric-making process.
The term ``[f]abric-making process'' is defined in paragraph
(b)(2) of Section 102.21 as:
. . . any manufacturing operation that begins with polymers, fibers,
filaments (including strips), yarn, twine, cordage, rope, or fabric
strips and results in a textile fabric.
The tariff shift rule in 19 CFR 102.21(e)(1) is inapplicable
because there is no change from greige fabric. The tariff shift rule
in 19 CFR 102.21(e)(2) requires a change to heading 5603 from any
heading outside of headings 5602-5603, resulting from a fabric-
making process. In Taiwan, polypropylene plastic polymer is melted
and extruded into filaments. These filaments are spun and then
bonded into a sheeted web of nonwoven filament textile fabric
classified under subheading 5603.12.00, HTSUS. Hence, because the
change to subheading 5603.12.00, HTSUS, is a result of a fabric-
making process, the merchandise complies with the requisite tariff
shift rule 19 CFR 102.21(e)(2). Accordingly, the country of origin
of the alcohol prep pads is Taiwan, the country in which the fabric-
making process occurs.
Based on the analysis above, we find that the country of origin
of the subject alcohol prep pads is Taiwan and, therefore, the
subject merchandise would be the product of a foreign country or
instrumentality designated pursuant to 19 U.S.C. 2511(b)(1).
Holding
Based on the facts and analysis set forth above, the subject
alcohol prep pads are a product of Taiwan, for purposes of U.S.
Government procurement.
Notice of this final determination will be given in the Federal
Register, as required by 19 CFR 177.29. Any party-at-interest other
than the party which requested this final determination may request,
pursuant to 19 CFR 177.31, that CBP reexamine the matter anew and
issue a new final determination.
[[Page 14662]]
Pursuant to 19 CFR 177.30, any party-at-interest may, within 30 days
of publication of the Federal Register Notice referenced above, seek
judicial review of this final determination before the U.S. Court of
International Trade.
Sincerely,
Alice A. Kipel,
Executive Director, Regulations & Rulings, Office of Trade.
[FR Doc. 2025-05731 Filed 4-2-25; 8:45 am]
BILLING CODE 9111-14-P