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[Federal Register Volume 73, Number 188 (Friday, September 26, 2008)]
[Notices]
[Pages 55860-55862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-22683]

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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

Notice of Issuance of Final Determination Concerning Certain Mesh 
Dressing

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 certain mesh dressing known as Tegaderm\TM\ Ag 
Mesh Dressing. Based upon the facts presented, CBP has concluded in the 
final determination that the United States is the country of origin of 
the Tegaderm\TM\ Ag Mesh Dressing for purposes of U.S. Government 
procurement.

DATES: The final determination was issued on September 22, 2008. 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 within October 27, 2008.

FOR FURTHER INFORMATION CONTACT: Cynthia Reese, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International Trade 
(202-572-8812).

SUPPLEMENTARY INFORMATION: Notice is hereby given that on September 22, 
2008, pursuant to subpart B of part 177, Customs and Border Protection 
(CBP)

[[Page 55861]]

Regulations (19 CFR Part 177, Subpart B), CBP issued a final 
determination concerning the country of origin of Tegaderm\TM\ Ag Mesh 
Dressing which may be offered to the United States Government under an 
undesignated government procurement contract. This final determination, 
in HQ H035776, was issued at the request of 3M Company 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, Tegaderm\TM\ Ag Mesh Dressing which is produced in the 
United States from foreign nonwoven cotton fabric is a product of the 
United States for purposes of U.S. Government procurement.
    Section 177.29, CBP Regulations (19 CFR 177.29), provides that 
notice of final determinations 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.

    Dated: September 22, 2008.
Jeremy Baskin,
Acting Executive Director, Regulations and Rulings, Office of 
International Trade.
HQ H035776
September 22, 2008
VAL-2 OT:RR:CTF:VS H035776 CMR

CATEGORY: Marking

TARIFF NO.: 3005.90

Mr. Matthew Fuller, Trade Compliance Department, 3M Company 3M Center, 
Building 225-4S-18, St. Paul, MN 55144-1000

RE: Origin determination of Tegaderm\TM\ Ag Mesh Dressing for purposes 
of Government Procurement

    Dear Mr. Fuller: This ruling is in response to your request of 
August 6, 2008, for a determination as to the country of origin of 
Tegaderm\TM\ Ag Mesh Dressing which is sold by 3M. You indicate that 3M 
is the importer of record of the nonwoven cotton fiber fabric used in 
the production of Tegaderm\TM\ Ag Mesh Dressing and, as such, has 
standing to request this ruling pursuant to 19 CFR 177.23(a) and Sec.  
177.24.

FACTS:

    3M imports nonwoven cotton fiber fabric which is produced by and 
purchased from suppliers outside the United States. At the time of 
importation, the nonwoven cotton fabric is in large (Jumbo) rolls and 
has no finishing on it. It is classifiable as a nonwoven fabric of 
heading 5603 of the Harmonized Tariff Schedule of the United States 
(HTSUS).\1\
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    \1\ Heading 5603, HTSUS, provides for ``Nonwovens, whether or 
not impregnated, coated, covered or laminated.'' We note that you 
indicate a belief that the nonwoven cotton fabric which is imported 
by 3M is classifiable in subheading 5603.12, HTSUS, however, that 
provision provides for nonwovens of man-made filaments. The correct 
subheading is 5603.92.00, HTSUS, which provides for nonwovens of 
other than man-made filaments, weighing more than 25 g/m\2\ but not 
more than 70 g/m\2\.
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    After importation, the nonwoven cotton fabric is processed so as to 
be impregnated with silver sulfate which is manufactured in the United 
States. The impregnated fabric is then slit to desired widths, cut to 
size (length), and packaged into pouches which are then sealed. The 
pouches are labeled, packed into cases, and then sent for 
sterilization. The finished Tegaderm\TM\ Ag Mesh Dressings are then 
ready for retail sale in the United States or for export.
    The silver sulfate with which the nonwoven fabric is impregnated is 
the ``active ingredient'' in the product. It is the silver sulfate 
which causes wounds to heal quicker. On its web site, 3M claims with 
regard to this product: ``Silver sulfate releases as silver ions in the 
dressing creates an effective antimicrobial barrier for up to 7 days.'' 
It is further claimed that these silver ions reduce the number of 
bacteria and yeast.
    You assert that the finished dressings are products of the United 
States under application of the rules of origin for textile and apparel 
products set forth in the Customs and Border Protection (CBP) 
regulations at 19 CFR 102.21 (implementing 19 U.S.C. 3592). In the 
alternative, you assert that the finished dressings are products of the 
United States under the traditional substantial transformation test set 
forth in 19 U.S.C. 2518.\2\ The CBP regulations implementing 19 U.S.C. 
2515(b)(1), which provides that the Secretary of the Treasury shall 
issue advisory rulings and final determinations on the origin of an 
article under the provisions of 19 U.S.C. 2511 through 2518, are found 
at 19 CFR 177.21 through 177.31. 19 U.S.C. 2511 through 2518 implement 
Title III of the Trade Agreements Act of 1979, as amended, which 
effectuated U.S. obligations under the Agreement on Government 
Procurement.\3\
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    \2\ 19 U.S.C. 2518(4)(B) defines the rule of origin for purposes 
of Government Procurement.
    \3\ See Title III, Trade Agreements Act of 1979, as amended, and 
the Agreement on Government Procurement, General Agreement on 
Tariffs and Trade, 12 April 1979, Geneva (GATT 1979).

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ISSUE:

    What is the country of origin of the finished Tegaderm\TM\ Ag Mesh 
Dressings for purposes of U.S. Government procurement?

LAW AND ANALYSIS:

    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 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.
    Initially, we note that 3M is permitted to request this ruling as 
it is the importer of record and thus meets the requirements of 19 CFR 
177.23(a) and 177.24. In addition, 3M meets the definition of a party-
at-interest as defined at 19 CFR 177.22(d) and is entitled to a final 
determination as to the country of origin of the finished Tegaderm\TM\ 
Ag Mesh Dressings produced from imported nonwoven cotton fabric.
    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) defining ``country of origin'' in 
identical terms.

    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 Procurement Regulations. See 19 
CFR 177.21. In this regard, CBP recognizes that the Federal Procurement 
Regulations restrict 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 Federal Procurement 
Regulations define ``U.S.-made end product'' as: * * * an article that 
is mined, produced, or manufactured in the United States or

[[Page 55862]]

that is substantially transformed in the United States 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. 48 
CFR 25.003. Therefore, the question presented in this final 
determination is whether, as a result of the operations performed in 
the United States, the nonwoven cotton fabric is substantially 
transformed into a product of the United States.
    The rules of origin for textile products for purposes of the 
customs laws and the administration of quantitative restrictions are 
set forth in 19 U.S.C. 3592. These provisions are implemented in the 
CBP Regulations at 19 CFR 102.21. The rules set forth in Sec.  3592 
apply to textile and apparel products, unless otherwise provided for by 
statute. The rule of origin in Sec.  2518(4)(B) is a rule of origin 
otherwise provided for by statute, however, it is a general rule, 
whereas Sec.  3592 is specific to textile products. Section 3592 has 
been described as Congress's expression of substantial transformation 
as it relates to textile products.
    The rules of origin in 19 U.S.C. 3592 are implemented in the CBP 
Regulations in 19 CFR 102.21. The imported product is a nonwoven 
textile fabric. The finished product, Tegaderm\TM\ Ag Mesh Dressings, 
is also a textile product as defined by 19 CFR 102.21(b)(5). 
Tegaderm\TM\ Ag Mesh Dressings are classified in subheading 3005.90, 
HTSUS, which provides for ``Wadding, gauze, bandages and similar 
articles (for example, dressings, adhesive plasters, poultices), 
impregnated or coated with pharmaceutical substances or put up in forms 
or packings for retail sale for medical, surgical, dental or veterinary 
purposes'' other than adhesive dressings and other articles having an 
adhesive layer.
    As the finished dressing is produced by processing in more than one 
country, its origin cannot be determined by application of Sec.  
102.21(c)(1), wholly obtained or produced rule, and resort must be made 
to Sec.  102.21(c)(2). Section 102.21(c)(2) states that the origin of a 
good is the country ``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 [102.21].'' Section 102.21(e) provides in pertinent part:

    (1) The 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:

3005.90 If the good contains pharmaceutical substances, a change to 
subheading 3005.90 from any other heading; * * *.

The material of foreign origin in this case is the nonwoven cotton 
fabric classifiable in heading 5603, HTSUS. The processing in the 
United States causes the foreign origin material to make a tariff shift 
from heading 5603 to subheading 3005.90, HTSUS. Therefore, by 
application of the rules set forth in 19 CFR 102.21, the finished 
Tegaderm\TM\ Ag Mesh Dressings are products of the United States for 
purposes of government procurement.

HOLDING:

    Based on the facts and analysis set forth above, the finished 
Tegaderm\TM\ Ag Mesh Dressings are products of the United States for 
the purpose of government procurement.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 CFR Sec.  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. Pursuant to 19 CFR 177.30, any 
party-at-interest may, within 30 days after publication of the Federal 
Register notice referenced above, seek judicial review of this final 
determination before the Court of International Trade.

 Sincerely,

Jeremy Baskin
Acting Executive Director
Regulations and Rulings
Office of International Trade

 [FR Doc. E8-22683 Filed 9-25-08; 8:45 am]
BILLING CODE 9111-14-P
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