MAR-2 RR:CR:SM 560803 RSD
Mr. Dennis A. Dutson
Scalpel Golf Company
2400 S. Garfield Street
Denver, Colorado 80210
RE: Country of origin determination for golf club putter
assembled in the United States with a foreign made head; 19 CFR
134.1(b); 19 CFR 134.35(a)
Dear Mr. Dutson:
This is in response to your letter of January 7, 1998,
requesting a country of origin determination for a golf club
putter which will be assembled in the United States with a head
made in Taiwan.
FACTS:
The product for which you are seeking a country of origin
determination is a golf club putter. The golf club putter will
be assembled in the U.S. using the following components and
materials:
Grip, leather or rubber
Two sided tape
Graphite or steel shaft
Club head
Ferral
Epoxy
Lead tape
Grip solvent
Acetone
All of these components and materials are made in the U. S. with
the exception of the club head which is made in Taiwan.
You indicate that the assembly of a golf club putter
consists of a ten step process which you describe as follows:
1. The shaft is cut to length and sanded at the tip
to ensure proper fit.
2. A ferral is pounded onto the shaft 1 3/8 inches
from the tip of the shaft.
3. The club head is tapped (drilled out), expanding
the hosel entrance.
4. The club head is wiped down and polished.
5. A two-part epoxy is mixed and poured into the
hosel of the golf club head.
6. The sanded down tip end of the shaft is placed in
the hosel of the putter head.
7. After the epoxy has hardened and the shaft is
firmly set in the hosel, two sided tape is wrapped
around the butt end of the shaft covering six to ten inches.
8. Grip solvent is poured over the tape and into the
open end of the grip. The grip is then slid over
the taped end of the shaft.
9. Once the grip is dry, the club is cleaned with
acetone to remove excess epoxy and tape residue.
10. Lead tape is applied to the putter head to insure
proper weight and balance.
ISSUE:
What is the country of origin of the golf club putters
produced in the U.S. with a foreign made head?
LAW AND ANALYSIS:
Section 304, Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that unless excepted, every article of foreign
origin imported into the United States 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 United
States the English name of the country of origin of the article.
Congressional intent in enacting 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
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 United States. 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 Part 134.
A substantial transformation is said to have occurred when
an article emerges from a manufacturing process with a name,
character, and use which differs from the original material
subjected to the process. U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940).
Section 134.35(a), Customs Regulations (19 CFR 134.35(a)),
states that the manufacturer or processor in the U.S. who
substantially transforms the imported articles into articles
having a new name, character, or use will be considered the
ultimate purchaser of the imported article within the scope of 19
U.S.C. 1304. In such cases, the article will be excepted from
marking, although the outermost container in which the articles
are transported to the U.S. processor must be marked with the
origin of the articles.
In determining the country of origin of golf clubs made in
the U.S. with an imported foreign component, Customs ruled in ORR
824-70, dated August 24, 1970, that a U.S. manufacturer who
purchased imported golf club heads, either finished or
unfinished, and assembled them with shafts and grips of
U.S.-origin into finished golf clubs, was the ultimate purchaser
of the imported golf club heads. The ruling stated that if the
imported golf club heads were to be used by an original equipment
manufacturer, they would be substantially transformed by being
assembled with the U.S.-origin shaft and therefore excepted from
individual marking. To the same effect were Headquarters Ruling
Letter (HRL) 728213, dated July 3, 1985, and HRL 734136, dated
June 17, 1991. See also HRL 735125, dated November 17, 1993, and
HRL 73442, dated June 28, 1993. In these cases, the golf club
assembly operations were performed in the United States, and
either the shaft or the club head was of U.S.-origin.
A different conclusion was reached in HRL 734256, dated July
1, 1992, where both of the major components of the club, i.e.,
the head and the shaft, were of foreign origin and the grip was
of U.S. origin. There, Customs stated:
The grips are much less significant components as
compared with the heads and shafts and their insertion
onto the golf clubs is fairly simple. We believe that
the making of the golf club is a simple assembly
process of basically finished parts. We note that
there is a hole on the top of the head so no drilling
is necessary. The combining of the head and shaft is a
relatively simple operation which does not take a great
deal of time and skill and not a complex assembly.
Basically, all that is needed to make the finished club
is to insert the shaft into the head and to glue them
together.
Consequently, it was held in HRL 734256 that the imported major
components used in the assembly of the golf clubs in the U.S.
were not substantially transformed by that process.
Most recently, in HRL 560693 dated March 6, 1998, we
indicated that we would continue to follow the principle espoused
in ORR 824-70, and its progeny, that where one of the major
components of the golf clubs (i.e. the shaft or head) is of the
same origin as the country where the assembly of the clubs
occurs, the country of origin of the clubs is the country where
the assembly is performed. See also HRL 735125, dated November
17, 1993, and HRL 73442, dated June 28, 1993. Thus, in HRL
560693, we held that the assembly of golf clubs in Taiwan using
Taiwanese-origin club heads and components imported into Taiwan
resulted in a substantial transformation of those imported
components into products of Taiwan.
Accordingly, in this case, based on the previously cited
rulings, we find that the Taiwanese golf club head is
substantially transformed when it is assembled with a U.S. made
shaft and the other minor components of the golf club putter in
the U.S. Therefore, under 19 CFR 134.35(a), the imported heads
are excepted from the individual country of origin marking
requirements of 19 U.S.C. 1304 and only the outermost container
in which the heads are transported to the U.S. processor must be
marked with the origin of the heads. In addition, no country of
origin marking is required on the finished golf club putter.
Although Customs has determined in this ruling that the
finished golf club putters are articles of U.S. origin and not
subject to the country of origin marking requirements of 19
U.S.C. 1304, whether they may be marked "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 markings indicating that articles are made in the
U.S.
HOLDING:
The Taiwanese golf club heads are substantially transformed
when they are assembled with the U.S. made shaft and other
components in the U.S. to make the finish golf club putters.
Therefore, the imported heads are excepted from the country of
origin marking requirements of 19 U.S.C. 1304, and no country of
origin marking is necessary on the finished golf club. However,
the outermost container in which the golf club heads are
transported to the U.S. processor must be marked with the origin
of the heads.
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