MAR-2 CO:R:C:V 731507 LR
District Director of Customs
Nogales, Arizona 85621
RE: Country of origin marking of assembled articles entitled
to entry under subheading 9802.00.80, HTSUS.
Dear Mr. Lawrence:
This is in response to your letter of June 6, 1988,
requesting reconsideration of Headquarters ruling 728597, dated
May 16, 1988, in which it was determined that the legend
"Assembled in Mexico" was not acceptable country of origin
marking for articles assembled in Mexico and imported under
subheading 9802.00.80, HTSUS (formerly item 807.00, TSUS). We
regret the delay in responding.
FACTS:
HQ 728597 concerned the country of origin marking
requirements for imported wire harnesses imported into the U.S.
under item 807.00, TSUS. Although marking of the container in
lieu of the article itself was found to be acceptable, Customs
also found that the requested marking "Assembled in Mexico" on
the containers was unacceptable. In this regard, the ruling
states:
Section 10.22 of the Customs Regulations provides, with
respect to merchandise that has been granted a partial
exemption under item 807.00, Tariff Schedules of the United
States, 1/ that assembled articles are considered to be
products of the country of assembly for the purpose of the
country of origin marking requirements of 19 U.S.C. 1304.
Accordingly, the proper marking legend must read "Product
of Mexico", "Made in Mexico", or words of similar meaning.
If the imported wire harnesses with fittings are made
entirely of American-made materials, the United States
origin of the materials may be disclosed by using a legend
such as "Assembled in Mexico from material of U.S. origin",
or a similar phrase.
1/ See note 3
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You indicate that the marking "Assembled in Mexico" is
widely used in the 807/Twin Plant industry in Mexico and is
accepted by Customs at a number of different districts. In your
opinion, this method of marking is appropriate and ask that we
reconsider our position on this issue.
ISSUE:
What is the acceptable method of marking assembled articles
which are eligible for importation under subheading 9802.00.80,
HTSUS?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), requires, subject certain specified exceptions,
that all articles of foreign origin imported into the U.S. shall
be marked to indicate the country of origin to the ultimate
purchaser in the U.S. Although the country of origin of a
product is generally determined on the basis of where the last
substantial transformation occurs, 2/ there is an exception to
the general rule set forth in section 10.22, Customs Regulations,
for articles which are entitled to an exemption from duty under
subheading 9802.00.80, HTSUS (formerly item 807.00, TSUS).
Section 10.22 provides that assembled articles entitled to the
exemption are considered products of the country of assembly for
purposes of 19 U.S.C. 1304.
The exemption applies to articles assembled abroad in whole
or in part of fabricated components, the product of the U.S.,
with no operation performed thereon except the attachment of the
components to form the imported merchandise and operations
incidental thereto. The presence of foreign materials will not
preclude classification under subheading 9802.00.80. The
assembled article is subject to duty upon the full appraised
value of the imported article, less the cost or value of such
products of the U.S. 3/ For articles entitled to the exemption,
the country of origin is the country of assembly whether or not
the assembly operation constitutes a substantial transformation.
2/ Section 134.1(b), Customs Regulations, defines the country of
origin as "the country of manufacture, production, or growth of
any article of foreign origin entering the U.S. 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."
3/ Since duty must always be paid on the cost of the assembly
under subheading 9802.00.80, all articles eligible for
importation under this subheading receive only a partial
exemption from duty.
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There has been considerable confusion concerning the
acceptability of the marking "Assembled in " under the
provisions of section 10.22. Although the regulation provides
that the marking "Assembled in from material of U.S.
U.S. origin" is permissible when the assembled article is made
entirely of American-made materials, it provides no guidance
regarding the use of the phrase "Assembled in ". There
are contradictory rulings on this issue.
As indicated above, Customs determined in HQ 728597 that
"Assembled in Mexico" was not appropriate country of origin
marking under section 10.22 and required the merchandise to be
marked "Product of Mexico", "Made in Mexico", or words of similar
meaning. See also HQ 730500, March 10, 1988 (jewelry assembled
in Mexico from U.S. and foreign materials and entitled to an
exemption under item 807, TSUS, cannot be marked "Assembled in
Mexico," but must be marked "Made in Mexico", "Product of Mexico"
or words of similar meaning).
However, in HQ 729938, May 13, 1987, Customs determined
that with respect to garments assembled in Mexico from U.S. and
foreign components and entitled to an exemption under item 807,
TSUS, the following markings were acceptable: "Assembled in
Mexico", "Made in Mexico" or "Assembled in (or Made in) Mexico
from U.S. crafted fabric components and foreign trim." In
another ruling, Customs determined that color TV's assembled in
Mexico from U.S. and Japanese materials and imported under item
807, TSUS, may be marked "Assembled in Mexico". In that case,
the word "America" or a locality in the U.S. was to appear on the
assembled article. Customs determined that in the context of an
807 importation, the words "Assembled in" are words of similar
meaning to "Made in" or "Product of" within the meaning of
section 134.46 and 134.47, Customs Regulations. 4/ Most
recently, Customs determined in HQ 083455, September 6, 1989,
that roller bearing assemblies, assembled in Mexico from Romanian
and U.S. components and eligible for treatment under subheading
9802.00.80, HTSUS, could be marked "Assembled in Mexico" or
"Assembled in Mexico from Romanian and U.S. components."
4/ Section 134.46 requires that in any case in which the name of
a place other than the country of origin appears on an imported
article or its container, there shall appear, legibly and
permanently, in close proximity to such place name, and in at
least a comparable size, the name of the country of origin
preceded by "Made in," "Product of," or other words of similar
meaning. Section 134.47, which is applicable when the place name
is part of a trademark, trade name, or souvenir marking,
similarly requires "Made in," "Product of," or other words of
similar meaning to precede the country of origin (emphasis
added).
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Upon examination of the contradictory positions, we find
that the rulings which approved of "Assembled in "
should be followed. As explained below, this position is
consistent with Customs intent in promulgating section 10.22 and
satisfies the purpose of the marking statute to inform the
ultimate purchaser of the country of origin.
An examination of the history of section 10.22 reveals that
Customs intended the phrase "Assembled in " to be
acceptable marking in the context of that provision. The
regulation was promulgated in 1975, as part of a package of
interpretative regulations concerning the 807 exemption. The
notice of the proposed regulations was published in the Federal
Register on July 5, 1974 (39 FR 24651). Proposed section 10.18,
pertaining to the country of origin marking requirements for such
merchandise, provided:
Assembled articles entitled to the exemption are
considered products of the country of assembly for purposes
of the country of origin marking requirements of section
304, Tariff Act of 1930, as amended (19 U.S.C. 1304). If
an imported assembled article entitled to the exemption was
made entirely of American-made components and materials,
and does not contain any foreign-made components, the
marking "Assembled in " may be substituted for
"Made in (emphasis added).
Upon analysis of the comments received in response to the
proposed regulation, Customs determined that certain changes to
section 10.18 were necessary. In this regard, Customs indicated:
Several commenters objected that the proposed wording
seemed to imply that the term "Made in" is a mandatory part
of country of origin marking. The terms "Assembled in" or
"Made in" are optional, and either is acceptable. The term
"from materials of United States origin" or a similar
phrase can be added at the importer's option if all
materials are of United States origin. There is no
requirement that the returned articles must be marked with
the additional wording to qualify for item 807.00.
(Analysis of Comments: Attachment to July 14, 1975
memorandum from Commissioner of Customs to the Assistant
Secretary regarding the 807 regulations).
The final 807 regulations were published as T.D. 75-230
(40 FR 43025, September 18, 1975). The final version of section
10.18 was published as section 10.22. Although the first
sentence of the proposed regulation which indicated that
assembled articles entitled to the exemption are considered
products of the country of assembly was left intact, Customs
changed the second sentence by deleting the language which
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indicated that "Assembled in" was only permissible where the
article was made entirely from U.S. materials and substituted the
words set forth below in bold. Section 10.22 provides:
Assembled articles entitled to the exemption are considered
products of the country of assembly for the purposes of the
country of origin marking requirements of section 304,
Tariff Act of 1930, as amended (19 U.S.C. 1304). If an
imported assembled article is made entirely of American-
made materials, the United States origin of the material
may be disclosed by using a legend such as "Assembled in
from material of U.S. origin," or a similar
phrase.
Although section 10.22 does not specify when "Assembled in
___ " is acceptable marking, the conclusion that it is
permissible both when the assembled article consists entirely of
U.S. materials and when it does not is inescapable based on
Customs analysis of comments and the changes made to proposed
section 10.18. As indicated above, in analyzing the comments,
Customs stated that the terms "Assembled in" or "Made in" are
optional, and either is acceptable. Customs further indicated
that the term "from materials of U.S. origin" or a similar phrase
can be added at the importer's option if all materials are of
U.S. origin. These statements clearly imply that "Assembled in"
by itself is sufficient marking whether or not all the materials
are American-made. These statements coupled with the deletion of
the sentence from proposed section 10.18 which said that
"Assembled in" was permissible only if the article contained no
foreign-made components, are clear indications that Customs
considered "Assembled in " acceptable marking whenever
section 10.22 is applicable.
We are also of the opinion that the phrase "Assembled in
" satisfies the statutory requirement of 19 U.S.C. 1304
to indicate the country of origin to the ultimate purchaser. In
the context of section 10.22, "Assembled in " does
exactly this. Whenever section 10.22 applies, the country of
assembly is always the country of origin, whether or not the
assembly constitutes a substantial transformation. Accordingly,
in the context of section 10.22, we believe the phrase "Assembled
in " adequately conveys origin. Moreover, in this
context, the "Assembled in" indicator may well be more accurate,
descriptive and revealing to the ultimate purchaser than the
traditional "Made in" or "Product of" indicators which generally
connote that the article was either made entirely in or
substantially transformed in the designated country. (For the
same reason, for purposes of section 10.22 merchandise, we
consider the words "Assembled in" to be words of similar meaning
to "Made in" or "Product of" within the context of section 134.46
and 134.47).
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We also find that the origin of the materials comprising
the assembled article may be added to the country of origin
indicator whether or not the article consists entirely of
American-made materials. We see no reason why assembled articles
made entirely from U.S. materials should be permitted to be
marked "Assembled in from material of U.S. origin" (the
language specifically approved in section 10.22) and assembled
articles not made entirely from U.S. materials should not be
permitted to be marked with a similar phrase such as "Assembled
in from U.S. and Japanese materials." In both
instances, the identity of the materials merely provides the
ultimate purchaser with additional pertinent information. While
this information is not required, it serves a useful function and
should be encouraged.
Finally, it should be noted that the phrase "Assembled in"
will not constitute sufficient country of origin marking outside
the context of section 10.22 (i.e., where an assembled article is
not eligible for the subheading 9802.00.80 exemption). In such
case, the general country of origin rule applies and the country
of origin is the country of assembly only if the assembly process
constitutes a substantial transformation. Approval of the phrase
"Assembled in" outside the context of section 10.22 would be
misleading since the country of assembly may or may not be the
country of origin for purposes of 19 U.S.C. 1304.
HOLDING:
Under the provisions of section 10.22, the words "Made in",
"Product of" or "Assembled in" preceding the country of assembly
or merely the name of the country of assembly constitute
acceptable country of origin marking. Any of these designations
is acceptable, whether or not the assembled article consists
entirely of U.S. materials. The origin of the materials
comprising the assembled article may be added to the country of
origin designation, whether or not the article consists entirely
of U.S. materials. Finally, with respect to articles which are
subject to the provisions of section 10.22, the phrase "Assembled
in" constitutes words of similar meaning to "Made in" and
"Product of" for purposes of sections 134.46 and 134.47. To the
extent they are inconsistent with this ruling, HQ 728597 and HQ
730500 are modified.
Sincerely,
John Durant, Director
Commercial Rulings Division