MAR-02 RR:TC:SM 560214 JML
Mr. Robert J. Hirschfield
General Manager
Wallingford's Inc.
263 Main Street
Tilton, New Hampshire 03276
RE: Reconsideration of NYRL A86836; country of origin marking
requirements for wire rope logging chokers; 19 U.S.C. 1304;
19 CFR Part 134; substantial transformation.
Dear Mr. Hirschfield:
This is in response to your letter of November 22, 1996,
requesting reconsideration of New York Ruling Letter ("NYRL")
A86836, dated October 3, 1996. Specifically, the matter at issue
involves a country of origin marking determination for logging
chokers manufactured in the United States ("U.S.").
FACTS:
Wallingford's, Inc. ("Wallingford's"), is a U.S.
manufacturer of logging chokers for sale in the U.S. domestic
market. Logging chokers are used in the harvesting of trees to
transport them from the harvest site to the processing yard.
The chokers are made from wire rope cable imported from
several countries (including India, S. Korea, Mexico and Turkey).
All other components are of U.S. origin. The rope is cut on an
automatic cutting machine to the specific length required by the
model of choker being built. Sliding hooks are put on the rope,
and end ferrules are swaged on using 500 ton electro-hydraulic
presses. Additionally, certain models of the chokers have chain
attachments and sleeves pressed on. Upon completiton of all
operations, the chokers are pull tested for quality control.
You state that the operations performed in the U.S. to
produce the logging chokers are such that the wire rope is
substantially transformed into a domestic good, and can be marked
"Made in the U.S.A."
ISSUE:
What is the country of origin of the finished logging
chokers?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that, unless excepted, every article of foreign
origin imported into the U.S. shall be marked in a conspicuous
place as legibly, indelibly, and permanently as the nature of the
article (or its container) will permit, in such a manner as to
indicate to the ultimate purchaser in the U.S. the English name
of the country of origin of the article. Congressional intent in
enacting 19 U.S.C. 1304 was "that the ultimate purchaser should
be able to know by an inspection of the marking on the imported
goods the country of which the goods is the product. The evident
purpose is to mark the goods so that at the time of purchase the
ultimate purchaser may, by knowing where the goods were produced,
be able to buy or refuse to buy them, if such marking should
influence his will." United States v. Friedlaender & Co., 27
C.C.P.A. 297 at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and the exceptions of
19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as:
The country of manufacture, production or growth of any
article
of foreign origin entering the U.S. Further work or
material added
to an article in another country must effect a substantial
transformation
in order to render such other country the country of
origin' within
the meaning of this part; however for a good of a NAFTA
country, the
NAFTA Marking Rules will determine the country of origin.
(Emphasis added.)
GOODS OF NON-NAFTA COUNTRIES
With respect to goods of non-NAFTA countries for country
of origin marking purposes, a substantial transformation of an
imported article occurs when it is used in manufacture which
results in an article having a name, character, or use differing
from that of the imported article. In such circumstances, the
manufacturer or processor in the U.S. who converts or combines
the imported article into the different article will be
considered the "ultimate purchaser" of the imported article, and
the article is excepted from marking and only the outermost
container is required to be marked. See 19 CFR 134.35(a).
United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267
(C.A.D. 98) (1940) On the other hand, section 134.1(d)(2),
Customs Regulations (19 CFR 134.1(d)(2)) states that if the
manufacturing process is minor and the identity of the imported
article is left intact, the consumer or user of the article will
be regarded as the ultimate purchaser.
In Headquarters Ruling Letter ("HRL") 731953 dated April
27, 1990, no substantial transformation was found when connector
heads were attached to the ends of wire rope cable because the
cable was already made to specifications, and once the cable was
cut and fittings were attached, its use was determined. In HRL
555774, dated December 10, 1990, it was held that cutting
Japanese-origin wire to length in the U.S., and crimping
electrical connectors onto the ends of the wire was not a
substantial transformation. In HRL 555892, dated October 10,
1991, Korean wire rope was imported into Canada where it was
fitted with Canadian-origin hardware, such as eyelets and dies,
to produce wire rope slings or swifters. The operations
generally entailed forming the ends of the wire rope into a loop
and crimping Canadian hardware onto the neck of the loop, or
threading the wire rope into the hardware to create an
intertwined loop. For Voluntary Restraint Arrangement (VRA)
purposes, it was held that the wire rope maintained its essential
character throughout the process and did not lose its identity
and become an integral part of a new article when attached with
the hardware.
Consistent with the above, we are of the opinion that
processing foreign origin (non-NAFTA) wire rope in the U.S. by
cutting it to length, sliding on hooks, affixing end ferrules,
and pressing on chain attachments and sleeves to make logging
chokers, does not substantially transform the wire rope. Rather,
the wire rope maintains its character throughout the process and
does not lose its identity and become an integral part of a new
article when attached with the hardware. The cutting to length
and simple attachment of the various components are minor
operations which do not change the rope into a new and different
article of commerce. As such, the chokers must be marked with
their foreign country of origin in accordance with 19 U.S.C.
1304.
WIRE ROPE FROM MEXICO
Section 134.1(j), Customs Regulations (19 CFR 134.1(j)),
provides that the "NAFTA Marking Rules" are the rules promulgated
for purposes of determining whether a good is a good of a NAFTA
country. A "good of a NAFTA country" is defined in Section
134.1(g), Customs Regulations (19 CFR 134.1(g)), as an article
for which the country of origin is Canada, Mexico, or the U.S. as
determined under the NAFTA Marking Rules set out at Part 102,
Customs Regulations (19 CFR Part 102).
Section 102.11, Customs Regulations (19 CFR 102.11), sets
forth the required hierarchy for determining whether a good is a
good of a NAFTA country for marking purposes. Paragraph (a) of
this section states that the country of origin of a good is the
country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classification set out
in section 102.20 and satisfies any other applicable
requirements of that section, and all other applicable
requirements of these rules are satisfied.
Because the finished chokers are made from both Mexican and
U.S. origin materials, they can not be considered wholly obtained
or produced or produced exclusively from domestic materials. In
such circumstances, the applicable rule is 19 CFR 102.11(a)(3).
Customs notes that the completed logging chokers are classifiable
under subheading 7312.10, HTSUS. Likewise, the wire rope is
classifiable in heading 7312, HTSUS. The requisite change in
tariff classification for headings 7309-7314 set out in section
102.20(n), Section XV, Chapters 72 through 83, provides:
7309-7314............ A change to heading 7309
through 7314 from any other
heading, including another heading within that group.
The finished logging chokers and the wire rope are both
classifiable in heading 7312, HTSUS. Therefore, the imported
forgings will not undergo the requisite tariff shift, and section
102.11(b), Customs Regulations (19 CFR 102.11(b)) must be
applied, which in pertinent part provides that:
Except for a good that is specifically described in the
Harmonized
System as a set, or is classified as a set pursuant to
General Rule
of Interpretation 3, where the country of origin cannot be
determined
under paragraph (a), the country of origin of the good:
(1) Is the country or countries of origin of the single
material that imparts the essential character of the
good ...
When determining the essential character of a good under
section 102.11, section 102.18(b)(1), Customs Regulations (19 CFR
102.18(b)(1)) provides that only those domestic and foreign
materials that are classified in a tariff provision from which a
change is not allowed shall be taken into consideration. Section
102.18(b)(1)(iii), Customs Regulations (19 CFR
102.18(b)(1)(iii)), provides that if there is only one material
that is classified in a tariff provision from which a change in
tariff classification is not allowed, then that material will
represent the single material that imparts the essential
character to the good under section 102.11.
Pursuant to section 102.18(b)(1)(iii), the single material
that imparts the essential character of the finished logging
chokers is the wire rope. The country of origin of the logging
chokers is the country of origin of the wire rope -- Mexico.
Thus, the logging chokers must be marked accordingly under 19
U.S.C. 1304.
HOLDING:
On the basis of the information provided, Customs is of the
opinion that non-NAFTA foreign origin wire rope is not
substantially transformed into a good of the U.S. upon the wire
being cut to length, attaching sliding hooks, affixing end
ferrules, and pressing on chain attachments and sleeves to make
logging chokers. Such operations are minor which do not change
the identity of the rope. Accordingly, the logging chokers must
be marked with their foreign country of origin in accordance with
19 U.S.C. 1304.
Similarly, the essential character of the logging chokers
made from wire rope of Mexican origin is the wire rope. Thus,
pursuant to the NAFTA Marking Rules, the country of origin of the
logging chokers for marking purposes is the country of origin of
the wire rope -- Mexico -- and must be marked accordingly. NYRL
A86836, dated October 3, 1996, is hereby affirmed.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division