MAR-2-05 RR:TC:SM 560694 MLR
Mr. Brian B. Porter
Stahlwille Tools North America, Inc.
3916 Murdock Ave.
Sarasota, FL 34231
RE: Country of origin marking for set of stud removers;
automotive industry; substantial transformation;
assembly; chrome plating; container marking; 19 CFR
134.32(d); 19 CFR 134.26
Dear Mr. Porter:
This is in reference to your letter of September 30,
1997, requesting a ruling concerning the country of origin
marking requirements for a set of stud removers used for the
automotive industry. Samples were submitted with your
request.
FACTS:
It is stated that Stahlwille will be manufacturing a
set of stud removers, i.e., a screw or bolt without a head,
for use in the automotive industry. It is stated that the
following parts are imported from Japan: deep socket (not
chrome plated or marked), cage, rollers, washer, and a snap
ring, each part of which is imported for 12 millimeter (mm),
10 mm, 8 mm and 6 mm stud removers. It is stated that each
component by itself it totally useless. In the U.S., the
deep sockets are chrome plated, and the various components
are assembled together to form 12 mm, 10 mm, 8 mm, or 6 mm
stud removers. The various stud removers are packaged in
top and bottom foam inserts of U.S. origin which are placed
in a metal tool box imported from Germany.
A sample of a deep socket, a cage, the rollers, the
washer, and the snap ring for the 12 mm stud remover, the
top foam and bottom foam insert for the stud remover set,
and the metal box for the stud remover set have been
submitted with your ruling request. It is stated that the
components for the 6 mm, 8 mm, and 10 mm stud removers are
identical except that they are smaller in size than the 12
mm components.
ISSUE:
What are the country of origin marking requirements of
the stud remover sets at issue?
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 (or its container) 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.
Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304. Section 134.1(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 the
marking laws and regulations.
For country of origin marking purposes, a substantial
transformation of an
imported article occurs when it is used in the U.S. in the
manufacture, which results in an article having a name,
character, or use differing from that of the imported
article. If such substantial transformation occurs, then
the manufacturer is the "ultimate purchaser" of the imported
article; such article is excepted from individual marking
and only the outermost container in which the U.S.
manufacturer receives the article is required to be marked.
See 19 CFR 134.35. On the other hand, if the manufacturing
or combining process is merely a minor one which leaves the
identity of the imported article intact, a substantial
transformation has not occurred and an appropriate marking
must appear on the imported article so that the consumer can
know the country of origin. Uniroyal, Inc. v. United
States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff'd,
702 F.2d 1022 (Fed. Cir. 1983).
The question in this case is whether the assembly of
the five Japanese-origin components, i.e., the deep socket,
cage, rollers, washer, and snap ring, in the U.S. to form a
stud remover constitutes a substantial transformation into a
new article having a new name, character or use.
In National Hand Tool Corp. v. United States, 16 CIT
308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993), the court
considered sockets and flex handles which were either cold
formed or hot forged into their final shape prior to
importation, speeder handles which were reshaped by a power
press after importation, and the grip of flex handles which
were knurled in the U.S. The imported articles were then
heat treated which strengthened the surface of the steel,
and cleaned by sandblasting, tumbling, and/or chemical
vibration before being electroplated. In certain instances,
various components were assembled together which the court
stated required some skill and dexterity. The court
determined that the imported articles were not substantially
transformed and that they remained products of Taiwan.
In this case we find that the assembly of the
components is rather simple and that the essential character
of the finished stud remover is imparted by the deep socket
which locks into the stud to allow it to be removed.
Accordingly, while there is a change in name from the
various components to a stud remover, we find that the
character of the deep socket is not changed when it is
assembled with the other components into a stud remover, and
that the deep socket has a predetermined use for use as a
stud remover. Therefore, since there is no substantial
transformation of the Japanese components in the U.S., the
ultimate purchaser of the finished stud removers will be the
automotive servicing center or the purchaser at retail.
Therefore, the finished stud removers must be marked to
indicate to the ultimate purchasers in the U.S. that they
are products of Japan.
In this case, it is stated that the finished stud
removers will be packaged in the metal box from Germany.
Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d), an
exception from individual marking is applicable where the
marking of the container of such article will reasonably
indicate the origin of the article. This exception is
normally applied in cases where the article is imported in a
properly marked container and Customs officials at the port
of entry are satisfied that the ultimate purchaser will
receive it in the original unopened marked container.
Relevant factors regarding whether an article is likely to
remain in its original container include the chain of
distribution, the type of container, and the nature of the
article. However, if the components are imported in bulk in
marked containers and thereafter will be assembled together,
but remain products of Japan, the certification requirements
of 19 CFR 134.26 must be followed.
Section 134.26(a), Customs Regulations {19 CFR
134.26(a)}, provides in pertinent part that:
If an imported article subject to these requirements is
intended to be repacked in retail containers (e.g.
blister packs) after its release from Customs custody,
or if the port director having custody of the article,
has reason to believe that such article will be
repacked after its release, the importer shall certify
to the port director that: (1) If the importer does
the repacking, he shall not obscure or conceal the
country of origin marking appearing on the article, or
else the new container shall be marked to indicate the
country of origin of the article in accordance with the
requirements of this part
Accordingly, with regard to the imported components for
the stud removers, we find that if they are imported in
marked containers and the repacking certification set forth
at 19 CFR 134.26(a) is filed with Customs at the port of
entry with respect to the marking of the repacked stud
removers, they will be excepted from individual marking at
the time of importation pursuant to 19 CFR 134.32(d).
Additionally, it is also indicated that the metal tool
box is also of foreign origin. Section 134.23 provides that
"containers or holders is designed for or capable of reuse
... must be individually marked to indicate the country of
their own origin". As the metal tool box will hold the
various stud removers when they are not in use, we find that
the box is designed for reuse, and, therefore, must be
marked to indicate its own origin to the ultimate purchaser.
Accordingly, the metal tool box should be labeled with a
marking such as "Stud Removers Made in Japan; Container Made
in Germany".
HOLDING:
Based on the facts and samples presented, the assembly
of the imported Japanese components into finished stud
removers in the U.S. is not a substantial transformation.
Furthermore, we find that since the metal tool box from
Germany is designed for reuse, it must be marked to indicate
its own origin to the ultimate purchaser. Accordingly, we
find that if the imported components for the stud removers
are imported in marked containers and the repacking
certification set forth at 19 CFR 134.26(a) is filed with
Customs at the port of entry with respect to the marking of
the repacked stud removers, they will be excepted from
individual marking at the time of importation pursuant to 19
CFR 134.32(d). A marking on the tool box such as "Stud
Removers Made in Japan; Container Made in Germany" will be
acceptable.
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
Commercial Rulings Division