MAR-2-05 RR:TC:SM 560427 DEC
Mr. Rick Tomfohrde
Christensen Display Products, Incorporated
2608 239th Avenue
Issaquah, Washington 98029
RE: Country of origin marking; 19 CFR 134.35(a); Belcrest Linens
v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff'd,
2 Fed. Cir. 105, 741 F.2d 1368 (1984); C.S.D. 80-111; C.S.D.
85-25; C.S.D. 89-110; C.S.D. 89-118; C.S.D. 90-51; C.S.D.
90-97; HRL 734966; HRL 734213; HRL 734097; 15 U.S.C. 1124;
15 U.S.C. 1125
Dear Mr. Tomfohrde:
This is in reference to your letter of April 17, 1997,
requesting a ruling concerning the country of origin marking
requirements for a certain monitor to be used with a personal
computer which is to be sold in the U.S.
FACTS:
You describe your company's product as a monitor for a
personal computer whose target applications are industrial control
systems. Your product is the display monitor only. It does not
include the computer. The display technology used is a Flat Panel
TFT/LCD. You state that, of the ten items on the major parts list
included with your submission, all of the items except one are U.S.
manufactured. The only part that is not U.S.-manufactured is the
LCD module which you state is the most significant component.
The LCD module is manufactured in Japan by NEC. It is a 31
centimeter diagonal matrix TFT component panel. The component
panel is non-functional by itself. It requires active electronics
to process video signals to make it work. In your description of
the LCD module, you indicate that this component includes the LCD
panel, driving electronics, backlight, and inverter. The other
components used in the production of the monitor include the
following: (1) analog video module (accepts analog video signals,
processes and generates LCD video, power, and timing signals), (2)
touch screen controller module (accepts a series of signals from
the touch screen and converts to a serial signal to the personal
computer), (3) internal video cable, (4) internal serial cable, (5)
internal DC power distribution wiring, (6) internal metal mounting
plate, (7) front bezel, (8) front touch screen, and (9) back
enclosure.
ISSUE:
Is the Japanese-origin LCD module described above
substantially transformed when it is incorporated into the monitor
in the U.S., thereby excepting the finished article from the
country of origin marking requirements pursuant to 19 U.S.C. 1304?
LAW AND ANALYSIS:
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that unless excepted, every
article of foreign origin imported in 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. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. Section 134.35(a), Customs Regulations (19 CFR
134.35(a)), provides that the manufacturer or processor in the U.S.
who converts or combines the imported article into a different
article having a new name, character or use will be considered the
ultimate purchaser of the imported article within the contemplation
of 19 U.S.C. 1304 and the article shall be excepted from marking.
The outermost containers of the imported articles shall be marked,
but the new article resulting from the U.S. processing or
manufacturing is excepted from country of origin marking.
In determining whether the combining of parts or materials
constitutes a substantial transformation, the issue is the extent
of operations performed and whether the parts lose their identity
and become an integral part of the new article. Belcrest Linens v.
United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff'd, 2 Fed.
Cir. 105, 741 F.2d 1368 (1984). Assembly operations which are
minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See C.S.D.
80-111, C.S.D. 85-25, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51,
and C.S.D. 90-97. The issue of whether a substantial
transformation occurs is determined on a case-by-case basis.
Customs has addressed the issue of substantial transformation
with respect to the production of computer monitors. In
Headquarters Ruling Letter (HRL) 734966, dated October 18, 1993,
HRL 734213, dated February 20, 1992, and HRL 734097, dated November
25, 1991, Customs consistently determined that the assembly of the
various components used to produce a computer monitor resulted in a
substantial transformation of the component parts. While each of
these cases is factually distinguishable, Customs' is satisfied
from a review of the record in this case that the imported LCD
module is substantially transformed in the U.S. when it is
incorporated into the monitor. This finding is consistent with the
treatment previously accorded to imported components of computer
monitors. Therefore, only the outermost container of the LCD
module when imported will be required to be marked with the country
of origin pursuant to 19 CFR 134.35(a).
Since the LCD module is substantially transformed in the U.S.
and the other components are all of U.S. origin, the completed
personal computer monitor will not be considered a foreign article.
Therefore, the monitor will not be subject to the country of origin
marking requirements contained in 19 U.S.C. 1304. Whether an
article may be marked as "Made in the USA" is an issue under the
authority of the Federal Trade Commission (FTC). We suggest that
you contact the FTC Division of Enforcement, 6th and Pennsylvania
Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed
markings indicating that an article is made in the U.S.
HOLDING:
The LCD module imported into the U.S. and incorporated into
the monitor to be used with a personal computer, as discussed
above, are substantially transformed in the U.S. Such LCD modules
are excepted from country of origin marking pursuant to 19 CFR
134.35(a).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is 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