CBP Says Certain Surgical Gowns From DR, Not US-Origin, for Government Procurement

The country of origin of certain surgical gowns imported by Global Resources International and Santé USA is the Dominican Republic and not the U.S. for the purposes of government procurement, CBP said in a final determination. Since the most important assembly or manufacturing processes in the production of the gowns took place in the Dominican Republic and not the U.S., the country of origin is the Dominican Republic, CBP said. The agency then directed the importers to consult with the relevant government procuring agency to find whether the gowns qualify as "U.S.-made end products" for the Federal Acquisition Regulation.

The disposable surgical gowns are used in hospitals, surgical centers and similar healthcare environments, made from nonwoven synthetic spun-melt-spun (SMS) textile material and plastic film made in the U.S. This material is then sent to the Dominican Republic where it, along with plastic film, is cut into the gown body, sleeve and reinforcement pieces. The sleeve is folded and sealed, where a knit cuff is then sewn to it. Back in the U.S., the sleeve subassemblies are attached to the main gown body, and the neck binding is attached to the opening of the gown.

CBP applied the substantial transformation standard to determine the COO. The agency first addressed which regulations are not applicable in this analysis -- a determination that included 19 C.F.R. § 102.21(c)(2), which looks at a good and if it has two or more parts, whether a change resulted from the good being wholly assembled in a single country. Since the goods are not wholly assembled in a single country, this regulation is "inapplicable," CBP said. CBP further found Section 102.21(c)(3) inapplicable as well for the same reason and since the gowns are neither knit to shape nor wholly assembled in a single country.

The agency then applied the standard under section 102.21(c)(4), which says that "Where the country of origin of a textile or apparel product cannot be determined under paragraph (c)(1), (2) or (3) of this section, the country of origin of the good is the single country, territory or insular possession in which the most important assembly or manufacturing process occurred.” GRI and Santé said that the most important process is the assembly of the sleeves to the main body piece, which takes places in the U.S. CBP disagreed.

"The most important assembly or manufacturing processes of the surgical gowns consist of cutting the SMS textile material to make the main body and sleeve pieces, the assembly of the sleeves, the assembly of the gown body, and the application of the plastic film to the inner face of the gown body," the determination said. "All these steps combined create the main pieces of the surgical gown, i.e., the sleeves and the body. They are the parts of the surgical gown that make the surgical gown a surgical gown. As a result, when the sleeve subassemblies and the surgical gown body are exported to the United States, they are clearly recognizable as an unfinished surgical gown."

CBP said it has a "longstanding practice" of interpreting this regulation to include more than one assembly process, and that a prior ruling -- 2004's "New York Ruling Letter K88449 -- found that the most important process for a woman's knitted jacket was sewing the collar to the front, assembling the sleeve parts, attaching the cuffs, and more. "Consequently, while GRI and Santé USA argue that attaching the sleeve subassemblies to the gown body subassembly requires a high degree of skill and time, we find that, in the aggregate, [the U.S. steps] are the most important assembly or manufacturing processes in the production of the surgical gowns.