MAR-05 RR:CR:SM 562495 NL
John M. Peterson, Esq.
George W. Thompson, Esq.
Neville Peterson LLP
80 Broad Street, 34th Floor
New York, NY 10004
RE : Country of Origin Marking of a Color Printer; Substantial Transformation
Dear Messrs. Peterson and Thompson:
This is in reply to your letter dated August 5, 2002, on behalf of Xerox Corporation (Xerox) requesting a prospective binding ruling concerning the country of origin marking of a machine identified as the Xerox Phaser 8200 Color Printer. The ruling you seek concerns the determination of the country origin of the Phaser 8200 for the purposes of Section 304 of the Tariff Act, as amended (19 U.S.C. §1304).
FACTS:
You advise that the Phaser 8200 is a color ink jet printer to be manufactured in Singapore using components produced in Malaysia and other countries. Product literature has been included with your submission providing technical descriptions and specifications of the machine.
The manufacturing operations undertaken in Singapore are described as follows:
Circuit board assembly for the input/output unit, left side, assembled to the chassis;
Power controller printed circuit board assembly assembled to the chassis;
Preheating thermal drum inserted into the chassis;
Paper path motor assembled to the chassis;
Stepper assembly motor assembly, with gear, assembled to the chassis;
Control panel cover assembly (user interface) assembled to the chassis;
High voltage power supply assembled to the chassis;
Input/output circuit assembly board, right, assembled to the chassis;
“Barracuda” print head assembly assembled to the chassis;
purge control module assembled to the chassis;
Ink load assembly assembled to the chassis;
Electronic subsystem (ESS) controller board assembled to the chassis;
Front cover assembly assembled to the chassis.
After assembly the printer is subjected to high voltage electrical and functionality testing, packaged, inspected and shipped to the United States.
Your letter submits that the operations constitute a substantial transformation such that Singapore is the country of origin for purposes of country of origin marking under Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304).
ISSUE:
Do the manufacturing operations in Singapore result in substantial transformation of the components such that the Phaser 8200 Color Copier may be marked as a product of Singapore?
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 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. By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of origin of which the goods were 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. Friedlander & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).
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 this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Accordingly, the country of origin of an article is the country in which it was wholly grown, or, if processed in several countries, the country in which the last substantial transformation occurred. The well-established test for determining whether a substantial transformation has occurred is derived from language enunciated by the court in Anheuser-Busch Association v. United States, 207 U.S. 556, 562 (1908), which defined the term “manufacture” as follows:
Manufacture implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labor and manipulation. But something more is necessary, as set forth and illustrated in Hartranft v. Wiegmann, 121 U.S. 609. There must be transformation; a new and different article must emerge, having a distinctive name, character or use.
Simply stated, a substantial transformation occurs “when an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing.” See Texas Instruments, Inc. v. United States, 69 CCPA 152, 681 F. 2d 778 (1982)(cited with approval in Torrington Co. v. United States, 764, F.2d 1463, 1568 (1985).
In determining whether a substantial transformation occurs in manufacture by combining of parts or materials, the inquiry concerns the extent of operations and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 3 CIT 204, 573 F. Supp. 1149 (1983), aff’d 2 Fed. Cir. 105, 741 F. 2d 1368 (1984).
The operations as set forth in the instant submission are complex and extensive, calling for the assembly and integration of 13 enumerated major subassemblies on the chassis to produce the finished Phaser 8200 printer. The chassis as well as all the subassemblies and components lose their separate identities as a result of these operations, and a new and different article of commerce having a new name, character and use is created.
This finding is consistent with the determinations of this office in HQ 557142 (May 28, 1993)(assembly of a wax thermal transfer page printer using approximately 420 parts results in substantial transformation); HQ 735315 (April 10, 1995) (spectrometer shell undergoes substantial transformation when combined with printed wiring board assemblies containing software and control capabilities). This office also finds that the assembly operations are more extensive than certain assembly operations found not to result in substantial transformation. See HQ 734050 (June 17, 1991)(assembly of five subassemblies by 45 minute screwdriver operations did not result in substantial transformation of the resulting printer).
HOLDING:
Based upon the information provided, printer subassemblies as enumerated above undergo a substantial transformation when assembled in Singapore to produce the Xerox Phaser 8200 color ink jet printer. For the purposes of country of origin marking under Section 304 of the Tariff Act, as amended, the Phaser 8200 shall be marked in accordance with Section 304 and Part 134, Customs Regulations, to indicate Singapore as the country of origin.
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,
Myles B. Harmon, Acting Director
Commercial Rulings Division