MAR-2-05 CO:R:C:V 732923 KG
Arthur Hatton
Ovako Steel, Inc.
P.O. Box 745
Avon, Connecticut 06001
RE: Country of origin marking of imported crankshaft forgings
Dear Mr. Hatton:
This is in response to your letter of November 17, 1989,
requesting a country of origin ruling regarding imported
crankshaft forgings.
FACTS:
You import crankshaft forgings from two steel mills in
Sweden. Each forging is marked to indicate which mill it
originated from. The crankshaft forgings are sold to
manufacturing companies in the U.S. who perform finishing
operations such as polishing, turning, heat treating and
sometimes some annealing and install the crankshafts in engines.
The engines are then installed in heavy duty trucks or
automobiles either by the same company or by other companies.
You submitted four photographs of crankshafts loaded onto
pallets, covered with plastic wrap and marked with large tags
identifying the part number, the purchase order number and the
phrase "Made in Sweden." Although it is difficult to estimate
the size of the country of origin marking from the photos, it is
evident that the letters are bold, prominent and of the same size
as the other information on the tag. The tag is stapled to the
banding of the pallet. The pallets are then placed in containers
and shipped to the U.S.
ISSUE:
Whether the imported crankshaft forgings, marked as
described above, comply with the country of origin requirements
set forth at 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, 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 134.35, Customs Regulations (19 CFR
134.35), states that the manufacturer or processor in the U.S.
who converts or combines the imported article into a different
article having a new name, character or use will be considered
the ultimate purchaser of the imported article within the
contemplation of section 304(a) of the Tariff Act of 1930, as
amended, and the article shall be excepted from marking. The
outermost containers of the imported articles shall be marked.
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 ___, 628 F.Supp. 978 (CIT 1986), Koru North America v.
United States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988). Customs
ruled in HQ 709253 (August 9, 1978), that imported German
crankshaft forgings which underwent further processing in France
were substantially transformed in France and therefore,
considered to be a product of France for country of origin
marking purposes. The processing in France included: turning the
main and rod bearing journals, drilling oil feed holes, drilling
and tapping the flange of the crankshaft and additional heat
treatment. In this case, the further processing performed in the
U.S. is similar. Further, the crankshaft forgings are installed
in engines after processing. Once installed in engines, the
crankshafts lose their identity and become an integral part of a
new or different article having a new name, character and use.
The crankshaft forgings are substantially transformed in the
U.S. Therefore, the ultimate purchaser of the crankshaft
forgings is the manufacturer. The country of origin marking
described above would inform the manufacturer of the country of
origin of the imported crankshaft forgings.
HOLDING:
The U.S. manufacturer that performs the operations described
above and installs the crankshafts into engines is the ultimate
purchaser of the imported crankshaft forgings. Therefore,
marking the country of origin boldly and prominently on tags
attached to the banding of the pallet is acceptable provided that
Customs officials at the port of entry are satisfied that the
U.S. manufacturer will receive the crankshaft forgings on the
pallets with the country of origin tags intact.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch