MAR-2-05 CO:R:C:V jd
Ms. Kathy Young
Panalpina, Inc.
P.O. Box 502
Greer, South Carolina 29651
RE: Country of origin marking requirements applicable to imported
cassette cases and cassette shells
Dear Ms. Young:
This is in reply to your letters of October 5, 1988, and
July 28, 1989, concerning the application of country of origin
marking requirements to imported cassette cases and shells. We
regret the delay in responding.
FACTS:
Cassette shells are imported in bulk in, according to your
submission, properly marked outer containers. The shells are
sold to processors in the U.S. that insert either blank recording
tape or prerecorded tape, both of U.S. origin, into the shells.
Although your letter did not refer to them separately, we
note that the samples submitted included two empty cassette
cases. Both empty cases consist of a clear plastic front
designed to snap shut against a black plastic back. The cases are
made to hold and protect individual cassettes. Marking
requirements for cases reaching ultimate purchasers independent
of cassettes, as well as for cases delivered containing a
cassette, are discussed below.
Additional samples consist of 11 cassette shells. All
shells are complete, ready for the insertion of tape. Six of the
shells have no label affixed and have no origin worked into the
plastic. The five remaining shells all have labels affixed
imprinted in pertinent part with the word "Switzerland", once in
all uppercase letters directly beneath a company name, "ICM", at
the top of the label, and once at the bottom of the label as part
of ICM, Ltd.'s Swiss address.
ISSUES:
Are cassette cases, whether delivered to ultimate
purchasers empty, or containing a cassette, subject to the
country of origin marking requirements of 19 U.S.C. 1304?
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Are cassette shells imported in a condition ready for the
insertion of tape substantially transformed by such insertion, so
as to make the party adding the tape the ultimate purchaser of
the shells for country of origin marking purposes?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides that every article of foreign origin (or
its container) imported into the United States 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 an ultimate purchaser in the U.S. the
English name of the country of origin of the article. Section
134.1(d), Customs Regulations (19 CFR 134.1(d)), defines
"ultimate purchaser" as "generally the last person in the U.S.
who will receive the article in the form in which it was
imported."
Section 134.35, Customs Regulations (19 CFR 134.35),
implementing the principle of U.S. v. Gibson-Thomsen Co., Inc.,
27 C.C.P.A. 267 (C.A.D. 98), provides that an article used in the
U.S. in manufacture which results in an article having a name,
character, or use differing from that of the imported article
will be considered substantially transformed, and therefore the
manufacturer or processor in the U.S. who converts or combines
the imported article into the different article will be
considered the ultimate purchaser of the imported article within
the contemplation of 19 U.S.C. 1304(a). Accordingly, the article
shall be excepted from marking. However, in accordance with 19
U.S.C. 1304(b) and 134.22, Customs Regulations (19 CFR 134.22),
the outermost container of the imported article shall be marked
to indicate the country of origin of the article.
Section 134.36(b), Customs Regulations (19 CFR 134.36(b)),
stipulates that an exception from marking shall not apply to any
article or retail container bearing any words, letters, names, or
symbols which imply that an article was made or produced in a
country other than the country of origin.
CASSETTE CASES
In ruling 731686 (April 12, 1989), Customs held that
recipients of sunglass cases, whether receipt was by separate
purchase or by virtue of purchasing sunglasses and receiving a
complementary case, are the ultimate purchasers of the cases and
therefore entitled to country of origin information. Sunglass
cases were recognized as articles separate and distinct from the
sunglasses they are designed to hold. See also 731758 (April 13,
1989), also on sunglass cases, and 707788 (May 4, 1977),
requiring conspicuous marking on a pouch designed as a case for a
computer.
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Record jackets were determined to be subject to individual
country of origin marking requirements in ruling 729224 (January 14,
1987). The decision was based on the fact that a record
jacket is not merely a disposable container used to hold a
record, but rather retains its separate identity and function
even after its combination with a record. Accordingly, the
ultimate purchaser of the record jacket is the person who
purchases the packaged album. See also 702026; July 6, 1973.
Imported cassette cases which reach ultimate purchasers
independent of any cassette, e.g., as a replacement case, are
clearly subject to country of origin marking requirements. Cases
which reach ultimate purchasers as the container of a cassette
are also subject to marking. Like the sunglass cases and record
jackets, cassette cases are separate articles which are not
transformed by the insertion of a cassette. The cases retain
their separate identity and function.
CASSETTE SHELLS
In Grafton Spools, Ltd. v. United States, 45 Cust. Ct. 16,
C.D. 2190 1960), the court held that empty ribbon spools for
business machines were excepted from individual marking because
the spools were substantially transformed into new articles of
commerce when wrapped with inked ribbons by a process requiring
technical skill and competence. Accordingly, ribbon
manufacturers which imported the empty spools were held to be the
ultimate purchasers of the spools.
In ruling letter 709123 (June 14, 1978), Customs ruled that
audio cassettes shells were not required to be individually
marked with their country of origin because the addition of
magnetic tape constituted substantial transformation within the
principle of the Gibson-Thomsen case and under 134.35, Customs
Regulations. See also ruling 709801, May 2, 1979.
The cassette shells imported in a condition ready for the
insertion of tape need not be individually marked with their
country of origin. The processorB that insert the tape, either
blank or prerecorded, are the ultimate purchasers of the shells.
However, in the case of shells imported with labels affixed
bearing references to the origin of the shells, that label must
be modified to indicate that the origin shown is of the shell
only. Otherwise ultimate purchasers of the tape-filled cassette
would be misled as to the origin of the tape.
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HOLDING:
Cassette cases which are imported empty and reach ultimate
purchasers without having had a cassette added, e.g., as
replacement cases for original cases that break or wear out,
require separate country of origin marking.
Cassette cases which reach ultimate purchasers with
cassettes inside also require separate country of origin marking.
The cases are finished articles with separate identities when
imported and undergo no transformation by the insertion of a
cassette. The case serves an important function in protecting
the cassette and ultimate purchasers are entitled to separate
origin information concerning this article. Further, cases are
not the kind of container thrown away as soon as the article is
received, such as cellophane wrap or insubstantial paper bags.
Marking such as, "Case ________ ", should be used.
U.S. processors that purchase imported empty cassette
shells and load blank or prerecorded tape therein are the
ultimate purchasers of the shells. Accordingly, the shells are
excepted from individual marking, but the outermost container of
the shells reaching the processor must display the country of
origin of the shells. However, those empty shells imported
bearing a label with the word "Switzerland" imprinted thereon
must be marked to indicate the Swiss origin refers to the shell
only. Otherwise, purchasers of the cassette after it has been
loaded with tape would be misled into believing the tape was of Swiss
origin as well.
Your samples are being returned under separate cover.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch