MAR-2-05 CO:R:C:V 731652 jd
John N. Politis, Esq,
Sandler & Travis, P.A.
3435 Wilshire Boulevard
Los Angeles, California 90010
RE: Country of origin marking requirements applicable to
pruning shears, hedge shears and loppers
Dear Mr. Politis:
This is in reply to your letter of July 25, 1988,
concerning the country of origin marking requirements applicable
to pruning shears, hedge shears and loppers.
FACTS:
According to your submission, your client, a domestic
manufacturer of hand tools, is seeking an exception to country of
origin marking requirements for certain hand tools it will be
importing from Mexico. The manufacturing process involved in
producing these tools is as follows. The two main components of
each tool (pruning shears, hedge shears and loppers) are forged
from steel bar stock of U.S. origin. The forged components are
then annealed, trimmed, coined (shaped), indexed (drilled,
tapped, countersunk and milled), hand ground, heat treated and
machine ground. All these steps occur in the U.S.
The finished forged components are then sent to Mexico for
assembly. Pruning shears are assembled with a bolt, nut, spring
and retainer of U.S. origin. After assembly, the pruning shear
handles are dipped in molten plastic to cover the handles. The
finished forged components for the hedge shears and loppers are
assembled with connecting hardware and have wooden handles
attached. We understand that the articles will not be entered
under subheading 9802.00.80, Harmonized Tariff Schedule of the
United States (formerly item 807.00 TSUS).
ISSUE:
Are finished forged components of pruning shears, hedge
shears and loppers of U.S. origin substantially transformed by
assembly into finished articles in Mexico so as to make the
articles products of Mexico for country of origin marking
purposes?
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LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), requires that, unless excepted, every article of foreign
origin (or its container) imported into the U.S. 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 U.S. the
English name of the country of origin of the article. The term
"country of origin" is defined in { 134.1(b), Customs Regulations
(19 CFR 134.1(b)), 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 this part.
By definition, only merchandise which is "of foreign
origin," i.e., of a country of origin other than that of the
U.S., is subject to the requirements of 19 U.S.C. 1304. Stated
differently, products of the U.S. are not subject to these
requirements. Since 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, if a
U.S. product is sent abroad for processing, it remains a product
of the U.S. (and not subject to the requirements of 19 U.S.C.
1304 upon its importation) unless prior to its importation, the
U.S. article is substantially transformed into an article of
foreign origin. However, pursuant to { 10.22, Customs
Regulations (19 CFR 10.22), articles assembled abroad in whole or
in part from U.S. components and entered under subheading
9802.00.80, HTSUS, are considered products of the country of
assembly for purposes of 19 U.S.C. 1304, whether or not the
assembly constitutes a substantial transformation.
Section 134.32(m), Customs Regulations (19 CFR 134.32(m)),
specifically excepts from country of origin marking requirements
U.S. products exported and returned. In applying this section,
Customs has ruled that U.S. products which are sent abroad for
further processing are not subject to country of origin marking
upon importation of the article into the U.S., provided the
further processing in the foreign country does not constitute a
substantial transformation.
In order for a substantial transformation to be found, an
article having a new name, character, or use must emerge from the
processing. See United States v. Gibson-Thomsen Co. Inc., 27
C.C.P.A. 267, C.A.D. 98 (1940).
It is the opinion of this office that the minor assembly
operations which are performed in Mexico do not substantially
transform the finished forged components of U.S. origin into
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articles with a new name, character, or use. The components are
easily recognizable as parts of the finished article prior to
assembly and no change occurs to the parts during the assembly
process. We consider the plastic coating applied to the handles
of the pruning shears an enhancement of the existing pruning
shears and not the creation of a new article for marking
purposes.
This determination is consistent with several prior Customs
rulings granting an exception to marking requirements for U.S.
articles that were exported and returned. For example, ruling
731482 (December 9, 1988) held that U.S. rack and pinion steering
assemblies sent to Mexico for disassembly, cleaning, installation
of new components, reassembly and testing, were excepted from
marking upon their return to the U.S. In ruling 728269 (July 20,
1985) three dimensional greeting cards were printed, folded,
scored for further folding, die-cut and perforated in the U.S.
The cards were then sent to Mexico where the die-cut portions
were pressed out, folded and glued. The cards as returned to the
U.S. were considered a U.S. product and excepted from marking.
Ruling 553197 (February 11, 1985) involved U.S. origin forgings
for surgical instruments which were sent to Pakistan for further
processing. The processing in Pakistan (polishing, removal of a
thin layer of metal, shaping, curving and heat treating) involved
more than the mere assembly performed on the finished hand tool
forgings in this case. However, the finished surgical
instruments were still excepted from marking upon their return to
the U.S. as U.S goods exported and returned.
HOLDING:
Pruning shears, hedge shears and loppers, manufactured and
assembled as described above, are excepted from country of origin
marking requirements as articles of the U.S. exported and
returned, pursuant to { 134.32(m), Customs Regulations.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch