CLA-2 CO:R:C:S 557387 RAH
District director
U.S. Customs Service
Lincoln Juarez Bridge, Building #2
P.O. Box 3130
Laredo, Texas 78044-3130
RE: Internal Advice No. 33/93; eligibility of glass face plates
for duty-free treatment under the GSP
Dear Sir:
This is in response to your memorandum of April 16, 1993,
regarding a request for internal advice from Brenco, Inc. on
behalf of Corning Glass Works, concerning the eligibility of
certain glass face plates for duty-free treatment under the
Generalized System of Preferences (GSP).
FACTS:
Raw rolled glass profiles of Korean-origin are shipped to
Mexico to be made into face plates for cathode ray tubes. In
Mexico, the glass profile undergoes four different processes.
First, the glass is surface ground and edge worked using "diamond
grindless" on both sides of the glass profile. Secondly, both
sides of the glass profile and edges are ground on a "Hoffman
machine." Next, one side of the glass panel is polished using a
"Lapmaster machine." Finally, the panel is finished on a
"Speedfam machine" to make "Antiglare".
After processing in Mexico, the glass is described as a 14"
FTM Glass Face Plate for television tube-antiglare. The panel is
then exported to the U.S. where it is used to manufacture cathode
ray tubes for television receivers.
The importer contends that the processing in Mexico
substantially transforms the Korean glass plates into a product
of Mexico.
ISSUE.
Whether the processing of Korean glass plates in Mexico by
grinding, polishing and finishing constitutes a substantial
transformation of the glass into a product of Mexico for purposes
of the GSP.
LAW AND ANALYSIS:
Under the GSP, eligible products which are the growth,
product, or manufacture of a designated beneficiary developing
country (BDC), may enter the U.S. duty-free if such products are
imported directly into the U.S. and the sum of 1) the cost or
value of the materials produced in the BDC, plus 2) the direct
costs involved in processing the eligible article in the BDC, is
equivalent to at least 35 percent of the appraised value of the
article upon its entry into the U.S. 19 U.S.C. 2463(b).
Mexico is designated BDCs. See General Note 3(c)(ii)(A),
HTSUS. Therefore, the glass plates will receive duty-free
treatment if they are considered to be the "product of" Mexico,
they are classified under a GSP-eligible provision, the 35
percent GSP value-content minimum is met, and the goods are
"imported directly" into the United States.
Merchandise is considered the "product of" a BDC if it
either is wholly the growth, product or manufacture of a BDC or
has been substantially transformed there into a new or different
article of commerce. 19 U.S.C. 2463(b)(2). A substantial
transformation occurs "when an article emerges from a
manufacturing process with a new name, character, or use which
differs from that of the original material subjected to the
process." The Torrington Company v. United States, 764 F.2d
1563, 1568 (Fed. Cir. 1985).
Under the facts presented, the importer has not shown that
the underlying chemical, physical and mechanical properties or
structure of the glass plates imported into Mexico will be
changed by the grinding and polishing operations in that country.
Although the article does have a somewhat different appearance,
it is only a change in its surface. The articles remains a glass
face plate. The form, shape and character of the glass plates
were determined in Korea and the product was substantially
completed when it left that country. We further find that the
cosmetic changes are not considered significant in light of the
predetermined qualities and specifications of the glass.
Accordingly, the glass plates will not be entitled to duty-free
treatment under the GSP when imported into the U.S. from Mexico.
Moreover, for marking purposes Korea is the country of
origin. However, there is insufficient information to determine
if the article is substantially transformed in the U.S. into a
product of this country.
HOLDING:
Grinding and polishing glass plates does not constitute a
substantial transformation of the glass for purposes of the GSP.
Therefore, the plates will not qualify for duty-free treatment
under the GSP.
Sincerely,
John Durant, Director
Commercial Rulings Division