CLA-2 RR:CR:SM 562543 KSG
Margaret L. Thomas
FTZ Foreign Trade Zone Operating Company of Texas
P.O. Box 613307
Dallas, Texas 75261-3307
RE: Country of origin of dual function wristwatches; special marking requirements for watches
Dear Ms. Thomas:
This is in reference to your letter dated August 19, 2002, on behalf of Fossil Partners L.P., requesting a binding ruling on the country of origin of two styles of dual function wristwatches. You submitted a sample of each style for our examination.
FACTS:
Fossil Partners submitted two styles of dual function analog and digital wristwatches (Style AM3404 and JR8051). The time of day function of hours and minutes is determined by the quartz analog movement and displayed on a dial with the hour and minute hands. The digital portion of the movement shows the seconds by means of a liquid crystal display. The quartz analog movements are made in Japan. The digital movements are made in China. The various component parts are assembled in China into a wristwatch. The country of origin of the watch cases was not provided.
The samples are marked by means of a paper hang tag attached to the watch. The paper hang tag also has the logo, style number and the price on it. Style AM3404 is marked "Japan Movement Strap Made In China." Style JR8051 is marked "China Movement Strap Made In China." There is no country of origin marking on the case or watch face.
ISSUE:
What is the country of origin of certain dual function wristwatches?
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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 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 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, 302 (1940). Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
Customs ruled in Headquarters Ruling Letter (HRL) 731546, dated October 27, 1988, that the country of origin of watches is the country of origin of the watch movements. In that case, the watch had only one movement, a quartz analog movement.
Note 3, Chapter 91, HTSUS, defines watch movements as "devices regulated by a balance wheel and hairspring, quartz crystal or any other system capable of determining intervals of time, with a display or a system to which a mechanical display can be incorporated. Such watch movements shall not exceed 12 mm in thickness and 50 mm in width, length or diameter." Special marking requirements for watch movements and cases are set forth in U.S. Note 4, Chapter 91, HTSUS:
With the following exceptions, any movement or case provided for in this chapter, whether imported separately or attached to an article provided for in this chapter, shall not be permitted to be entered unless conspicuously and indelibly marked by cutting, die-sinking, engraving, stamping (including by means of indelible ink), or mold-marking (either indented or raised), as specified below. Movements with opto-electronic display only and cases designed for use therewith, whether entered as separate articles or as components of assembled watches or clocks, are excepted from
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the marking requirements set forth in this note. The special marking requirements are as follows:…
(a) watch movements shall be marked on one or more of the bridges or top plates to show:
(i) the name of the country of manufacture;
(ii) the name of the manufacturer or purchaser; and
(iii) in words, the number of jewels, if any, serving a mechanical purpose as frictional bearings.
(c) Watch cases shall be marked on the inside or outside of the back to show:
(i) the name of the country of manufacture;
(ii) the name of the manufacturer or purchaser.
In this case, the watches have two movements, a movement that determines the hours and minutes of day (the quartz analog movement) and a movement that determines the seconds (the LCD movement). Because showing the hours and minutes of the day is the essential function of the watches, we find that the country of origin of the quartz analog movement is considered the country of origin of the watch. Therefore, based on the facts presented, the country of origin of the watches in this case would be Japan.
With regard to the country of origin marking of the watches, Customs held in HRL 735297, dated January 26, 1994, which was addressed to Fossil, Inc., that a securely affixed hang tag could be used to satisfy the marking requirements of 19 U.S. C. 1304 but that the special marking requirements of watches set forth in the HTSUS could not be waived. Customs clearly stated in the ruling that Fossil Inc. would still have to satisfy the special marking requirements. U.S. Note 4, Chapter 91, HTSUS, specifically excludes movements with opto-electronic display only from the special marking requirements. The watches involved in this case do not have only opto-electronic movements. We concur with HRL 735297 that Fossil Inc. must satisfy the special marking requirements set forth in Chapter 91, HTSUS. The quartz analog movements and watch cases must still comply with the special marking requirements.
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HOLDING:
The country of origin of the watches, as described above, is determined by the country of origin of the watch movement that determines the hours and minutes of the day. Based on the facts presented, the country of origin of the sample watches would be Japan.
The watches subject to this ruling must comply with the special marking requirements set forth in U.S. Note 4, Chapter 91, HTSUS.
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,
Myles B. Harmon, Acting Director
Commercial Rulings Division