MAR-2-05 CO:R:C:V 732258 KG
Bernard R. Nottling
Rudolph Miles & Sons
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942
RE: Country of origin marking of imported rebuilt automotive
alternators
Dear Mr. Nottling:
This is in response to your letter of March 22, 1989,
requesting a country of origin ruling regarding imported rebuilt
automotive alternators. We regret the delay in responding to
your inquiry.
FACTS:
Your client will be exporting repairable automotive
alternators into Mexico. Your client is unsure of the origin of
the alternators when originally made, but all the alternators are
taken out of used cars which were scrapped in the U.S. In
Mexico, a series of operations will be performed. First, the
alternators will be sorted by type, disassembled and the parts
will be cleaned. Then the parts will be electrically tested and
inspected to identify the defective and worn parts. The
defective parts will be scrapped and the reusable parts will be
stored by part number in storage containers. The alternators
will then be reassembled using both the original alternator parts
and new U.S.-made replacement parts. The alternators are
electrically tested , permanently ink stamped "Assembled in
Mexico" on the housing shell and packaged for shipment. Each
shipping carton will be stamped "Assembled in Mexico." The
alternators will then be imported and entry made as fully
dutiable.
Approximately 10 to 15% of the repairable alternators sent
into Mexico have a raised phrase "Made in U.S.A." die cast into
one of the two alternator end housings. Your client proposes to
permanently ink stamp "Assembled in Mexico" immediately adjacent
to the phrase "Made in U.S.A." which appears on the housing. You
asked if the phrases "Rebuilt in Mexico," or "Remanufactured in
Mexico" would be an acceptable country of origin marking.
ISSUE:
Whether the marking of the rebuilt automotive alternators
described above satisfies section 304 of the Tariff Act of 1930,
as amended.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (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 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 Court of
International Trade stated in Koru North America v. United
States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In
ascertaining what constitutes the country of origin under the
marking statute, a court must look at the sense in which the term
is used in the statute, giving reference to the purpose of the
particular legislation involved. The purpose of the marking
statute is outlined in United States v. Friedlaender & Co., 27
CCPA 297 at 302 C.A.D. 104 (1940), where the court stated that:
"Congress intended 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."
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines the country of origin of an article 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 for country of origin marking purposes.
A substantial transformation occurs when articles lose their
identity and become new articles having a new name, character or
use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270
(1940), National Juice Products Association v. United States, 10
CIT 48, 628 F.Supp. 978 (CIT 1986), Koru North America v. United
States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988). In this
instance, there is no new article; the alternators are rebuilt so
that they can function in their intended use. The rebuilt
alternators do not have a new name, character or use; they are
merely made functional again. The rebuilding of the alternators
in Mexico is not a substantial transformation.
Since the alternators are not substantially transformed in
Mexico, pursuant to 19 CFR 134.1(b), Mexico is not the country of
origin for these articles. The country of origin of these
rebuilt alternators would be the country where the alternators
were originally built. If the rebuilt alternators which contain
the marking "Made in the U.S.A." were originally made in the
U.S., then no country of origin marking is required by 19 U.S.C.
1304. However, to accurately advise the ultimate purchaser as to
these articles, Customs has no objection to the markings "Rebuilt
in Mexico" or "Remanufactured in Mexico" appearing thereon.
The issue of which country is considered the country of
origin for used imported articles which were not originally
intended for destination to the U.S. has been considered by both
the Court of International Trade and by Customs. In a case
involving the proper rate of duty to be assessed by Customs with
regard to a used imported printing press originally manufactured
in East Germany, the Court held in Ashdown, U.S.A. v. United
States, 696 F.Supp. 661 (CIT 1988), that the printing press,
which was continually used in West Germany for nine years and
which was not intended at the time of original sale to be
exported to the U.S., became a bona fide part of the commerce of
West Germany and was therefore, not an import from a Communist
country. The case is not directly on point because it involves
the proper rate of duty and not country of origin marking and
also because it involves General Headnote 3 of the Tariff
Schedules of the United States and is not a country of origin
determination. Further, in that case, Customs was able to
determine the original country of origin. However, the reasoning
involved in determining that the "connection between merchandise
and country of origin has been so effectively broken that it
could no longer be regarded as an import from East Germany" is
relevant to determining the country of origin for all used
machinery or goods.
Used clothing worn in Canada was held by Customs in HQ
732409 (September 25, 1989), to be from Canada for country of
origin marking purposes. The ruling cited HQ 730174 (March 31,
1987), in which Customs addressed the issue of used clothing
purchased in the U.S., exported to Mexico for sorting and re-
imported for sale in the U.S. Customs found that an exception
from marking pursuant to 19 CFR 134.32(c), which excepts articles
that cannot be marked prior to shipment to the U.S. except at an
expense economically prohibitive of its importation, was
unnecessary. The used clothing was regarded as of U.S. origin
because it was purchased from the Salvation Army, Goodwill
Industries stores and similar organizations within the U.S. and
therefore, presumed to have been worn and used in the U.S. These
rulings eliminated the need to sort the clothing by original
country of origin and also eliminated the problem of not knowing
the original country of origin of every single garment.
In this instance, the used alternators were installed and
used in automobiles in the U.S. There is no indication of any
intent to transship alternators through the U.S. and it is not
possible to determine where each and every alternator was
originally made. Therefore, the used alternators which are not
already marked with a foreign country of origin and for which it
is impossible to trace the original country of manufacture are
considered to be of U.S. origin. Those alternators which are
already marked with a foreign country of origin are properly
marked pursuant to 19 CFR 134.1(b) and require no further
marking. Since the used alternators which are not otherwise
marked with a foreign country of origin are considered to be of
U.S. origin for country of origin marking purposes, they are
excepted from marking pursuant to section 134.32(m), Customs
Regulations (19 CFR 134.32(m)), which excepts products of the
U.S. exported and returned to the U.S. from marking.
HOLDING:
Rebuilding an automotive alternator is not a substantial
transformation. Since the alternators were not substantially
transformed in Mexico, Mexico is not considered the country of
origin for the purposes of 19 U.S.C. 1304. Customs has no
objection to the markings "Rebuilt in Mexico" or "Remanufactured
in Mexico" appearing on the alternators. The used alternators,
which were used in automobiles in the U.S., but were not intended
to be used in the U.S. merely to attain a U.S. country of origin
and for which it is not possible to determine the original
country of origin for each and every alternator, are considered
to be products of the U.S. Therefore, the used alternators
already marked with a foreign country of origin are properly
marked. The used alternators not already marked with a foreign
country of origin and for which it is impossible to trace the
original country of manufacture are considered products of the
U.S. exported and returned, which are excepted from marking
pursuant to 19 CFR 134.32(m).
Sincerely,
John Durant
Director,
Commercial Rulings Division