MAR-2-05 CO:R:C:V 733036 KG
Mr. John T. Addario
Ja-Mar Forwarding
Airport International Plaza
U.S. 1-9 at International Way
Newark, New Jersey 07114
RE: Country of origin marking of imported crystal stemware
Dear Mr. Addario:
This is in response to your letter of December 7, 1989,
requesting a country of origin ruling on behalf of Crystal Clear
Industries regarding imported crystal stemware.
FACTS:
Your client plans to import crystal stemware which is made
in Austria at a unit cost of $1.60 and hand cut in East Germany
at a unit cost of $0.62. You submitted samples of an uncut
champagne flute to be exported to East Germany and a cut
champagne flute which will be imported into the U.S. Both
samples appear to be completed, polished glasses. The only
difference is that one champagne flute has some simple flat cuts
on the bottom above the stem.
ISSUE:
What is the country of origin of the imported crystal
stemware made in Austria and hand cut in East Germany for country
of origin marking and duty assessment purposes?
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 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 the meaning of this part."
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).
The glass exported from Austria is a finished polished piece
of stemware suitable for use as a champagne flute. There is no
change in name, character or use caused by the hand cuts made to
the glass in East Germany. Although the hand cuts are
attractive, they are very simple flat cuts and do not greatly
increase the value of the stemware. Based on these facts, we
conclude that this stemware is not substantially transformed in
East Germany. Pursuant to 19 CFR 134.1(b), the country of origin
of this stemware is Austria.
A U.S. Department of Treasury memorandum dated May 21, 1986,
from the Assistant Secretary of Enforcement to the Commissioner
of Customs discussed the country of origin of crystal glassware
which had been hand-blown and partially hand-cut in
Czechoslovakia and further hand-cut and polished in Ireland.
Crystal blanks, suitable only for further manufacturing and with
a grayish tinge to it, were made in Czechoslovakia. The blanks
were then shipped to Ireland, where more hand cutting and
polishing was done, which more than doubled the value of the
articles. The extent of the processing done in Ireland was
considerable and required a lot of time and great skill. Based
on these factors, the Department of Treasury concluded that a
substantial transformation had occurred and that the entries of
the glassware should be liquidated as products of Ireland.
This case is factually distinguishable from the situation
which was the subject of the Department of Treasury memorandum.
First, the crystal stemware made in Austria is polished rather
than of a grayish tinge and would be marketable as finished
stemware without the hand cuts. Further, although the hand cuts
made in East Germany enhance the appearance of the stemware,
making it more appropriate for use at a formal dinner or
function, the hand cuts do not substantially increase the value
of the stemware, the processing is not very time-consuming and
the cuts are not very intricate. Based on these factors, we
conclude that unlike the processing which was the subject of the
Department of Treasury memorandum, the processing performed in
this case in East Germany does not substantially transform the
stemware into a product of East Germany.
With regard to your inquiry for the applicable rate of duty,
if the stemware contains over 24 percent lead monoxide by weight,
they would be classifiable in subheading 7013.21 of the
Harmonized Tariff Schedule of the United States. The eight
digit classification subheading and rate of duty for this
stemware would depend on the value of the glassware. Since you
have not provided us with this information, we cannot determine
the rate of duty. Since the country of origin is Austria, the
column one rate of duty would apply.
You also asked if the phrase "Made in Austria, Cut in East
Germany" would be an acceptable marking. Section 134.46, Customs
Regulations (19 CFR 134.46), requires that when the name of any
foreign country or locality, other than the name of the country
or locality in which the article was manufactured or produced,
appears on an imported article or its container, there shall
appear, legibly and permanently, in close proximity to such
words, letters, or name, and in at least a comparable size, the
name of the country of origin preceded by "Made in,""Product of,"
or other words of similar meaning. The purpose of this section
is to prevent the possibility of misleading or deceiving the
ultimate purchaser. Since the stemware was made in Austria and
the additional information given as to the cutting is a true
statement, the two different country names are not deceptive or
misleading. Further, the two different country names appear
together which satisfies the close proximity requirement and the
name "Austria" is preceded by the phrase "Made in" as required.
Therefore, your proposed marking is acceptable.
HOLDING:
The crystal stemware described above is not substantially
transformed in East Germany. The country of origin of this
imported stemware is Austria for both duty and marking purposes.
Since Austria is a column one country, you would be required to
pay a column one rate of duty for this stemware. Your proposed
marking "Made in Austria, Cut in East Germany" is acceptable.
Sincerely,
John Durant
Director,
Commercial Rulings Division
cc: Chief, NIS Division, Branch 3
New York Seaport
NY #848078