MAR-2-05 CO:R:C:V 734046 KG
Mr. Carlton L. Brainard
District Director of Customs
111 West Huron Street
Buffalo, New York 14202
RE: Country of origin marking of imported telephone sets;
T.D. 91-7;
Dear Mr. Brainard:
This is in response to your memorandum of December 7, 1990,
(IA 76/90), requesting internal advice on the country of origin
marking of telephone sets imported by Northern Telecom Inc.
FACTS:
A sample telephone set was submitted for our examination.
Each telephone set consists of different components from
different countries of origin. The telephone set consists of
a base unit, a handset, a handset cord and a cord to connect the
telephone to the jack. The base unit consists of various
components sourced from a variety of countries which are mounted
on a printed circuit board and enclosed in a housing in Malaysia.
The handset is made in China. The handset cord is made in Taiwan
and the telephone cord is made in Mexico.
The base unit, handset, handset cord and telephone cord are
packed together in the same box but are not attached to each
other or combined. The value of the telephone base, which
consists of a motherboard, keypad, plastic base and housing, is
$63.35. The value of the handset, which consists of a receiver,
transmitter, loudspeaker and wiring, is $3.35.
We requested further information from Northern Telecom as to
exactly what processing is done in Malaysia. We never received
this information. Therefore, this ruling is based on the limited
information presented.
ISSUE:
What is the proper country of origin marking of these
imported telephone sets described above?
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. Customs set forth its position regarding the proper
country of origin marking of sets, mixtures and composite goods
in T.D. 91-7 (January 8, 1991). Customs stated in this T.D. that
for the purposes of country of origin marking, sets, mixtures and
composite goods which are not substantially transformed as a
result of their inclusion into the set, mixture or composite good
retain their own country of origin. Further, "in most cases, the
mere inclusion of an item in a collection will not substantially
transform it into an article with a new name, character or use
and therefore, each item must be separately marked with its own
country of origin. (Where the marking of the container will
reasonably indicate the country of origin to the ultimate
purchaser, the container may be marked instead of the individual
articles...)."
According to the limited information presented, it appears
that the only processing done in Malaysia is the assembly of the
base unit. Customs ruled in C.S.D. 85-25 (September 24, 1984)
and in HQ 733159 (July 23, 1990), that mounting components onto a
printed circuit board results in a substantial transformation.
Pursuant to 19 CFR 134.1(b), further work or material added to an
article in another country that results in a substantial
transformation renders such other country the country of origin
of the substantially transformed article. Because the components
are mounted in the printed circuit board and enclosed in a
housing in Malaysia, the country of origin of the base unit would
be Malaysia.
There is no suggestion in this request for internal advice
that any processing of any of the other components is done in
Malaysia. As discussed above, merely packing the four separate
components into the same box does not result in a substantial
transformation. If the components are not substantially
transformed by being packaged together, then each component
retains its separate country of origin and must be marked
accordingly. Based on the limited information presented, it
appears that the base unit, headset, headset cord and telephone
cord each retain their own country of origin and should be marked
accordingly. Since no information was received concerning how
and who these telephone sets are sold to, we cannot determine
whether the marking must appear on the components or on a
container.
HOLDING:
The base unit, headset, headset cord and telephone cord
which are imported as a telephone set are not substantially
transformed when they are packed together. Each component
retains its own country of origin and should be marked
accordingly.
Sincerely,
John Durant
Director,
Commercial Rulings Division
cc: Ms. Joan McLeod
Northern Telecom, Inc.
77 Oriskany Drive
Tonawanda, N.Y. 14150
Chief, NIS Branch 1 (IA 76/90)