MAR-2-05 CO:R:C:V 732999 NL
Peggy Chaplin, Esq.,
Ober, Kaler, Grimes & Shriver
1600 Maryland National Bank Bldg.
10 Light Street
Baltimore, Maryland 21202
RE: Country of Origin Marking of Automotive Hinge Parts
Dear Ms. Chaplin:
This is in response to your letter of December 22, 1989,
requesting a ruling that an exception from country of origin
marking applies to parts of automotive hinges which are imported
into the U.S. and incorporated into finished vehicles.
FACTS:
Your client (the buyer), will purchase halves of door
hinges manufactured abroad under a direct contract with the
manufacturer seller. After importation the buyer will assemble
the halves into completed hinges by means of U.S.-origin pins.
The hinges will, in turn, be incorporated into a vehicle for sale
to the U.S. government and other customers.
For a previous shipment the buyer requested that the hinge
parts be excepted from country of origin marking on the basis of
section 134.32(h), Customs Regulations (19 CFR 134.32(h)), which
provides that an article may be excepted from individual country
of origin marking if the ultimate purchaser must necessarily
know the country of origin of an article by reason of the
circumstances of its importation. Customs officials granted the
request on the basis of letters submitted by the buyer stating
that it was the ultimate purchaser of the hinge halves and
stating that it knew by reason of its contract that the seller
was supplying articles originating in the country of manufacture.
You are now requesting on behalf of your client a binding
ruling covering prospective transactions that the hinge parts may
be excepted from individual country of origin marking. Invoices,
purchase orders, technical drawings and other correspondence have
been submitted, together with a sample of the marking which will
be used on the containers of the imported hinge parts.
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ISSUE:
May imported hinge parts be excepted from country of origin
marking when assembled into completed hinges and incorporated
into vehicles?
LAW & 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.
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),
provides that a manufacturer who converts or combines an imported
article into a different article will be considered the ultimate
purchaser of the imported article, and the article will be
excepted from country of origin marking. For this exception to
apply, the conversion or combining must constitute a substantial
transformation within the principle of United States v. Gibson-
Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98). It is your
position that the buyer is the ultimate purchaser of the hinge
parts because it substantially transforms them into finished
hinges. You urge that since the buyer is the ultimate purchaser,
the hinge parts may be excepted from country of origin marking
pursuant to 19 CFR 134.32(h), or pursuant to 19 CFR 134.32(d),
which provides for an exception from country of origin marking
when the marking of an article's container will reasonably
indicate its country of origin.
We are unable to agree with your contention that the hinge
halves are substantially transformed into a new article with a
different name, character or use by being connected together with
a pin. In our view, such processing constitutes a mere assembly
of parts which are intended to fit together as a complete
article; in this case a hinge.
However, the incorporation of the hinges into the finished
vehicle is a substantial transformation within the meaning of 19
CFR 134.35, such that the buyer is the ultimate purchaser of the
hinge halves. Customs has previously ruled on numerous occasions
that the incorporation of components into finished machines
substantially transforms the components. For example, in HQ
730837 (June 10, 1988), we ruled that the parts which constitute
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a typewriter are substantially transformed when the typewriter is
produced. In HQ 731076 (November 1, 1988), we ruled that
components from Japan, Taiwan and the U.S. lose their separate
identities when incorporated into cars and are substantially
transformed. We stated that the manufacture of an automobile was
more than a mere assembly operation. Finally, in HQ 730025
(January 12, 1987), we ruled that a casting imported into the
U.S. to be used in the production of a door exit device could be
excepted from individual country of origin marking pursuant to 19
CFR 134.35. We found that the U.S. producer of the device was
the ultimate purchaser of the casting which, when combined with
numerous other components, lost its separate identity and was
substantially transformed.
In this case we find, pursuant to 19 CFR 134.35, that the
hinge parts, when incorporated into the vehicle, are
substantially transformed, and that the buyer of the hinge parts
is the ultimate purchaser. We also find that the hinge parts
may be excepted from individual country of origin marking
pursuant to 19 CFR 134.132(h), as an article for which the
ultimate purchaser, must necessarily know the country of origin
of the hinges by reason of its contract with the producer.
HOLDING:
Imported hinge parts purchased under a direct contract with
the foreign manufacturer may be excepted from individual country
of origin marking pursuant to 19 CFR 134.32(h), provided Customs
officials at the port of entry are satisfied that the articles
will be used only in the manner described above and will not be
otherwise sold.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch
cc: District Director,
Chicago, Ill.