MAR-2-05 RR:CR:SM 562799 KSG
Jann Futrell
Evans and Wood & Co., Inc.
612 E. Dallas Rd
Ste 200
Grapevine, Texas 76051
RE: Framed print; substantial transformation; HRL 560115; C.S.D. 79-443
Dear Ms. Futrell:
This is in reference to your letter of June 25, 2003, requesting a binding ruling on the country of origin marking of imported framed lithographic prints. A sample was submitted for our examination.
FACTS:
Your company ships U.S.-origin lithographic prints and mat boards to Indonesia for framing. In Indonesia, the frames are made and the prints are inserted into the frames. The finished framed prints will be imported into the Port of Dallas, Texas. As no information concerning the production of the frame was provided, we are assuming for the purposes of this ruling that the origin of the frame is Indonesia.
ISSUE:
What is the proper country of origin marking of the imported framed prints?
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 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 of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), “country of origin” means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940).
In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 85-25, dated September 25, 1984. However, the issue of whether a substantial transformation occurs is determined on a case-by-case basis. In Uniroyal, Inc. v. United States, 542 F. Supp.1026 (CIT 1982), the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe".
In Headquarters Ruling Letter ("HRL") 560115, dated March 7, 1997, Customs found that China was not the last country where a fishing rod underwent a substantial transformation. Rather, as the essence of the fishing rod was imparted by a U.S.-origin rod blank, the country of origin of the finished rod was the U.S. This ruling cited C.S.D. 79-443, dated January 25, 1979, which dealt with knives produced in the U.S. and exported to Japan where the handles were exchanged with Japanese handles. Customs held that the processing of the knives in Japan did not constitute a substantial transformation and therefore, the knives remained a product of the U.S. excepted from country of origin marking. Customs did not require the knife handle to be marked with its own country of origin.
This case is similar to HRL 560115 and C.S.D. 79-443, in that there is one component that imparts the essential character of the finished product—the lithographic print in this case and the component that imparts the essential character of the finished product is of U.S.-origin.
In this case, the lithographic prints are complete articles and the framing process would not constitute a complex and meaningful operation. Only a few parts are involved and the framing process does not appear to require a high degree of skill. Therefore, the U.S.-origin print and mat board would not be substantially transformed in Indonesia.
Accordingly, consistent with HRL 560115 and C.S.D. 79-443, the framed print in this case is exempt from country of origin marking pursuant to 19 U.S.C. 1304 and 19 CFR 134.32(m).
We note that marking the good as a product of the U.S. is a matter under the jurisdiction of the Federal Trade Commission (FTC). Therefore, should you wish to mark the articles with the phrase "Made in the USA," we recommend that you contact that agency at the following address: Federal Trade Commission Division of Enforcement 600 Pennsylvania Avenue, NW Washington, DC 20580.
HOLDING:
The lithograhic prints and mat boards are not substantially transformed in Indonesia. The country of origin of the prints, which determines the essential character of the framed print, remains the U.S. Accordingly, the framed print is excepted from country of origin marking under 19 U.S.C. 1304 and 19 CFR 134.32(m).
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, Director
Commercial Rulings Division