MAR-2-05 CO:R:C:V 733241 KG
Susan Kohn Ross, Esq.
Ross & Associates
5777 West Century Blvd.
Suite 520
Los Angeles, California 90045-5659
RE: Country of origin marking of imported auto parts; substantial
transformation; ultimate purchaser; 19 CFR 134.32(d); 19 CFR
134.44(c).
Dear Ms. Ross:
This is in response to your letter of March 27, 1990,
requesting a country of origin ruling regarding various imported
automotive parts.
FACTS:
Various imported automotive parts were submitted for
examination. Seven parts submitted were packaged in sealed
cardboard boxes. All seven boxes were marked with the country of
origin of the part. Further, all of the boxes also identify the
part number. The seven parts are: (1)a ball joint; (2) a thermo
switch; (3) a turn signal; (4) a brake disc; (5) head gaskets;
(6) a master cylinder; and (7) a piston set.
The eighth part, a gasket kit, was packaged in a cardboard
box with a window, wrapped in a poly shrink. The box is marked
with the country of origin of the part and the part number. The
ninth sample, 12 small black rubber pieces, is packaged in a
sealed plastic bag which is marked "Made in Brazil" and
identifies the part number. The tenth sample, a piece of rubber
weatherstripping, is marked with the country of origin with a
string tag attached to it.
These auto parts are primarily sold through catalogue sales
to mechanics. The parts will not be visible once they are
installed in an automobile.
ISSUE:
Whether the various imported automotive parts described
above are properly marked with their country of origin.
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."
A determination of who is the ultimate purchaser of the auto
parts is critical because 19 CFR 134.41(b), Customs Regulations
(19 CFR 134.41(b)), requires that the ultimate purchaser must be
able to find the country of origin marking easily and read it
without strain. Section 134.1(d), Customs Regulations (19 CFR
134.1(d)), defines the ultimate purchaser as generally the last
person in the U.S. who will receive the article in the form in
which it was imported. The definition then gives examples of who
might be the ultimate purchaser if the imported article is used
in manufacture. The ultimate purchaser of an article used in
manufacture may be the manufacturer who subjects the imported
article to a process which results in a substantial
transformation of the article.
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 48, 701 F.Supp. 229 (CIT 1988).
Customs ruled in HQ 731506 (May 1, 1990), that the person
who purchases replacement automotive glass is the ultimate
purchaser and not the installer. The installation of the
replacement windshield or car window is not considered a
substantial transformation. In this case, the replacement
automotive parts are ordered by mechanics to be sold to consumers
and installed by the mechanic into the consumer's car. The
installation of the various auto parts involved here is similar
to the installation of replacement automotive glass. The auto
part is imported in a completely finished condition and does not
undergo a change in its name, character or use. Further, there
was no assertion that the installation of any of these parts is
particularly complex or time-consuming. Therefore, the
installation of these replacement auto parts is not a substantial
transformation and the consumer who brings his or her car into a
garage is the ultimate purchaser of the imported auto part.
In HQ 722727 (October 21, 1983), Customs ruled that various
replacement automotive parts individually wrapped in containers
which bear the proper country of origin marking and part number
and which will reach the ultimate purchaser in these containers
was excepted from individual marking by the exception set forth
at 19 U.S.C. 1304(a)(3)(D). This provision excepts from marking
articles for which the marking of the container reasonably
indicates the country of origin of the article. If it is the
ultimate purchaser who will receive the part in the closed
cardboard box, the part itself is not required to be marked
pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d) as long
as the box is properly marked. This would govern in a situation
where a car owner orders the part directly from the manufacturer
or purchases the part in its box from an auto parts store. If
however, the mechanic is the one who ordered the part, the part
is not entitled to the 19 U.S.C. 1304(a)(3)(D) exception because
the mechanic is not the ultimate purchaser.
Although the imported auto parts which do not generally
reach the ultimate purchaser in their box are not technically
entitled to the 19 U.S.C. 1304(a)(3)(D) exception, this case
presents a unique situation because often the consumer, who is
the ultimate purchaser, has the mechanic install the parts. The
parts are not visible once installed into the car and the
consumer either never sees the actual part or sees it only after
it is no longer functional and has been removed from the car.
Since the intent of the marking statute, discussed infra, is to
enable consumers to make informed buying choices, in this case,
marking the sealed box in a legible and conspicuous manner is the
best way in which to inform the consumer of the country of
origin of the part. If the consumer is concerned about the
country of origin, he or she can ask to see the box before
purchasing the part and requesting the installation. Because
each part is imported in its own sealed box which identifies the
part number, we conclude that the part will remain in the box
until installation. Therefore, marking the country of origin of
the imported auto part in a permanent, conspicuous and legible
manner on the sealed box in which the auto part is contained
satisfies the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
In this case, the eight parts described which are contained in
boxes would all satisfy these requirements.
The small sealed plastic envelope which contains 12 small
black pieces is also excepted from individual country of origin
marking. It is sealed, it is properly marked with the country of
origin in red lettering which is legible, permanent, and can be
easily found and read without strain in accordance with 19 CFR
134.41. The ultimate purchaser would receive it in the sealed
plastic envelope.
The piece of rubber weatherstripping is marked with a
string tag which bears the country of origin on both sides.
Section 134.44(c), Customs Regulations (19 CFR 134.44(c)),
provides that when articles are marked with tags, they must be
attached in a conspicuous place and in a manner which assures
that unless deliberately removed they will remain on the article
until it reaches the ultimate purchaser. This string is attached
to the weatherstripping at a corner, which is a prominent
location. However, the tag is not tied to the weatherstripping;
the tag is merely slipped through the string. This manner of
attachment is not permanent enough to assure that the tag will
remain on the weatherstripping. As long as the tag is tied to
the weatherstripping or otherwise attached in a more permanent
manner, it satisfies the requirements of 19 CFR 134.44(c).
HOLDING:
The various imported automotive parts submitted which are
contained in closed cardboard boxes or a sealed plastic envelope
which are properly marked with the country of origin of the part
satisfy the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
The weatherstripping is properly marked as long as the tag is
tied to it or otherwise attached in a permanent manner.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch