MAR-2-05 RR:CR:SM 562726 EAC
Carmina Cruz
Import Coordinator
Oakley, Inc.
1 Icon
Foothill Ranch, CA 92610
RE: Country of origin marking requirements for imported frames used to produce finished sunglasses; ultimate purchaser; substantial transformation; marking exception
Dear Ms. Cruz:
This is in response to your letter, dated March 28, 2003, requesting a country of origin marking ruling on behalf of Oakley, Inc. (“Oakley”). Specifically, you have requested that our office grant a marking exception for raw spectacle frames Oakley imports into the United States from abroad. As requested, your samples will be returned (under separate cover).
FACTS:
Oakley intends to manufacture and distribute various models of sunglasses within the United States. You state that the raw frames for the sunglasses are made of either plastic or metal, and are imported into the United States from China, Italy, and Japan. “Raw” indicates that the frames do not have lenses or any other proprietary components attached. The lenses and other proprietary components are attached to the frames at an Oakley facility within the United States, where the sunglasses are assembled to completion and prepared for retail sale.
You describe the manufacturing processes that occur in the United States as consisting of “adding dual tinted polycarbonate lenses, rubber ear socks and on some models, nose pads” to the raw frames. The dual-spherical decentered lenses that are inserted into the frames are profiled from proprietary lens blanks that are of U.S.-origin. “Profiling” refers to a process that utilizes a proprietary multi-axis cutting system to form the lens. The lenses are then cleaned and “out-gassed” to remove moisture. The lenses are subsequently “coated with a proprietary thin-film quarter wavelength dielectric interference coating” which is applied in “customized, proprietary thermal evaporative chambers under a high vacuum atmosphere.” The coated lenses then undergo an ultrasonic cleaning process and are subsequently tested to ensure they meet quality control standards.
The completed lenses are manually inserted into the imported raw frames. Ear socks, which are injection molded, are then attached to each ear stem of the raw frame. The final step of the assembly process entails attaching nose pads to the frames that are imported without such nose pads already attached. The assembled sunglasses are then inspected to ensure quality control standards are met, packaged, and prepared for retail distribution.
ISSUE:
Whether the imported raw frames, upon importation into the United States, may be excepted from individual country of origin markings pursuant to 19 CFR 134.35.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930 (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 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 purposes 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 at 302 (1940).
Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. §1304. Section 134.1(b), Customs Regulations (19 C.F.R. 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 the marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98)(1940), provides that an article used in manufacture which results in an article having a name, character, or use differing from that of the constituent article will be considered substantially transformed and, as a result, the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See, 19 CFR 134.35(a). Therefore, the determinative issue in this case is the identity of the ultimate purchaser of the imported frames. Customs has consistently held that inserting U.S.-origin non-prescription lenses into imported raw frames to make completed sunglasses will effect a substantial transformation of the imported frames. As a result, the ultimate purchaser of the frames in such cases is considered to be the manufacturer that inserts the lenses into the frames. For example, in Headquarters Ruling Letter (“HRL”) 734327, dated February 17, 1993, frames manufactured abroad were imported into the United States where U.S.-origin non-prescription lenses were inserted into the frames to make sunglasses. We held that inserting the U.S.-origin non-prescription lenses into the imported frames effected a substantial transformation of the imported frames. Therefore, the U.S. assembler was the ultimate purchaser of the frames and such frames were excepted from individual country of origin marking as long as the outermost containers were properly marked when imported. See also, HRL 733654, dated October 29, 1990 (insertion of U.S.-origin non-prescription lenses into imported black nylon frames to make sunglasses in the United States effected a substantial transformation of the imported frames).
As applied to the case under consideration, it is our opinion that the imported raw frames are substantially transformed into products of the United States when processed into completed sunglasses in the manner set forth above. Therefore, in accordance with 19 CFR 134.1(d)(1), Oakley is considered to be the ultimate purchaser of the imported raw frames and, under 19 CFR 134.35(a), the individual raw frames may be excepted from individual marking when imported into the United States as long as the outermost containers are properly marked.
HOLDING:
Based upon the information and samples presented, it is our opinion that the imported raw frames will be substantially transformed into products of the United States when assembled with U.S.-origin lenses (and other proprietary components) in the location and manner set forth above. Accordingly, under 19 CFR 134.1(d)(1), Oakley is considered to be the ultimate purchaser of the frames. As a result, the imported raw frames are excepted from individual country of origin markings pursuant to 19 CFR 134.35(a), as long as the outermost containers are properly marked when imported into the United States.
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
Director,
Commercial Rulings Division