MAR-2-05 RR:CR:SM 562868 EAC
Ms. Susan Studeny
Tiffany & Co.
15 Sylvan Way
Parsippany, NJ 07054-3893
RE: Country of origin marking requirements for jewelry comprised of Italian-origin chains and clasps; substantial transformation
Dear Ms. Studeny:
Pursuant to your request of August 16, 2002, for a ruling pertaining to the tariff classification and country of origin marking requirements applicable to jewelry that is comprised of components of U.S. and Italian origin, the Director, U.S. Customs and Border Protection (“CBP”) National Commodity Specialist Division, issued New York Ruling Letter (“NY”) I85493 dated August 22, 2002, to your company. Upon further consideration of NY I85493, we have determined that, while the tariff classifications in that ruling are correct, the country of origin marking requirements set forth for jewelry assembled to completion within the United States from Italian-origin clasps and chains are incorrect. Therefore, NY I85493 is hereby modified for the reasons set forth below.
FACTS:
Three scenarios of production for jewelry were presented for consideration in NY I85493, in which CBP held that cutting jewelry chain to length and combining the chain with lobster clasps within the United States substantially transformed certain foreign-origin components into an article with a new name, character, and use. The first two scenarios involved assembling U.S.-origin chain with foreign-made clasps, while the third scenario involved joining foreign-origin chain with a foreign-made clasp. It was determined that the country of origin of the completed jewelry in all three scenarios was the United States. As it is our belief that the forgoing is correct with respect to the first and second production scenarios considered in that case, this ruling will only consider the facts of the third scenario.
Accordingly, in the third production scenario, Italian-origin sterling silver jewelry chains and Italian-origin sterling silver lobster clasps are assembled within the United States to form completed jewelry pieces. Each sterling silver chain weighs 52 grams and is valued at $14. Each sterling silver lobster clasp weighs 7.5 grams and is valued at $11. The assembled jewelry pieces will be finished subsequent to assembly.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of NY I85493, as described below, was published in the Customs Bulletin on April 21, 2004. No comments were received in response to the notice.
ISSUE:
For marking purposes, what is the country of origin of the jewelry assembled within the United States from the components described above?
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 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 at 302 (1940).
Part 134, Customs Regulations (19 CFR 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 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 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).
In Headquarters Ruling Letter (“HRL”) 557100 dated April 30, 1993, raw Bolivian gold was converted into bars of pure gold within Bolivia by means of a melting process. Utilizing rolling mills and drawing machines, the bars were thereafter converted into gold wire that was wound around spools. The spooled gold wire was then exported to Italy where it was fed into machines and converted into gold chain. The gold chain was subsequently cleaned, prepared with soldering powder, passed through soldering ovens, and wound around spools. At this point, the gold chain was returned to Bolivia for further processing which included cutting the chain to length for necklaces and bracelets, manually soldering end tips to the chains, passing the chains through ovens for heat treatment, cleaning the chains with chemicals and ultrasonic processes, manually assembling locks to the chains, cleaning the assembled jewelry, “finishing” the gold chains with a brushing machine, testing the assembled jewelry for quality control compliance, and packing the jewelry for shipment to the United States.
At issue in HRL 557100 was whether, for purposes of eligibility under the Andean Trade Preference Act (“ATPA”), the jewelry imported into the United States was considered to be a “product of” Bolivia. In deciding this issue, we initially noted that processing gold wire into gold chain substantially transforms the gold wire into a product of the country where processed into gold chain. Citing, HRL 555929 dated April 22, 1991. Therefore, as it was evident that the Bolivian gold wire was substantially transformed into a product of Italy when converted into gold chain, the remaining issue was whether the Italian-origin gold chain was subsequently substantially transformed back into a product of Bolivia when integrated into necklaces and bracelets.
Regarding whether cutting to length, soldering end tips, attaching locks or clasps, brushing, and inspecting the completed jewelry substantially transformed the Italian gold chain into a product of Bolivia, we held:
It is our opinion that once the woven gold chain is returned to Bolivia,
the processes performed there to create the finished necklaces and
bracelets do not substantially transform the imported chain into a “product
of” Bolivia. We believe that the essential character of the bracelet or
necklace is the chain which results from cutting, formation of the links and
weaving operations which occur in Italy.
See also, HRL 560333 dated July 24, 1997 (simple assembly or weaving of gold links into chain, even when coupled with a soldering operation, does not substantially transform the gold links).
As applied to the case presently under consideration, it is our opinion that merely combining an Italian-origin sterling silver chain with an Italian-origin sterling silver lobster clasp and finishing the resulting product does not substantially transform the items of foreign origin. Therefore, the country of origin of the jewelry produced in this manner is Italy.
HOLDING:
Based upon the information before us, we find that combining an Italian-origin sterling silver chain with an Italian-origin sterling silver lobster clasp within the United States to form completed jewelry does not substantially transform the foreign-origin items into a product of the United States. As such, the country of origin of completed jewelry pieces produced under these circumstances is Italy.
EFFECT ON OTHER RULINGS:
NY I85493 dated August 22, 2002, is hereby MODIFIED. In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division