MAR 2-05 CO:R:C:V 734152 RSD
Mr. Francis K. Fredette, Office Manager
F.H. Fenderson Inc.
P.O. Box 8
Champlain, New York 12919
RE: Country of origin marking requirements for balloons made in
the U.S. and exported to Canada for printing, substantial
transformation; 19 CFR 134.35, 19 CFR 134.32(m), NYRL 846647
revoked
Dear Mr. Fredette:
This is in response to your letter dated April 23, 1991, on
behalf of your client, Ballons Granger Ballons Inc., (Granger)
concerning the country of origin marking requirements for
balloons. We have also we received your additional submission
dated May 6, 1991. Granger had previously received a ruling from
the Area Director, New York Seaport on the country of origin
marking requirements for U.S. made balloons printed in Canada.
FACTS:
Ballons Granger Ballons Inc., (Granger) is a Canadian
company which imports children's ballons through the port of
Champlain, New York. Some of the balloons are produced in Canada
and are printed with a design and/or letters in Canada. Some of
the balloons are produced in the U.S. and are shipped to Canada
for the printing. The balloons are shipped to the U.S. in large
bulk cartons. They are either sold in the large cartons or
repacked and sold in large plastic bags with hundred of balloons
in them.
The Area Director, New York Seaport issued a ruling, New
York Ruling Letter 846647, November 3, 1989, to Granger which
required that the U.S. made balloons printed in Canada should be
marked to indicate that the printing was done in Canada (i.e.
"Printed in Canada").
ISSUE:
Do ballons made in the U.S. with printing done in Canada
have to be marked to indicate that the balloons were printed in
Canada? 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 its 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.
Congressional intent in enacting 19 U.S.C. 1304 was "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." United States v.
Friedlaender & Co. 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).
By definition, only merchandise which is "of foreign
origin," i.e., of a country of origin other than that of the
U.S., is subject to the requirements of 19 U.S.C. 1304. Stated
differently, products of the U.S. are not subject to these
requirements. Part 134, Customs Regulations (19 CFR Part 134),
implements the country of origin marking requirements and the
exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs
Regulations (19 CFR 134.1(b)), defines "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 the marking laws and
regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in
manufacture which results in an article having a name, character
or use differing from that of the constituent article will be
considered substantially transformed.
U.S. products exported and returned are specifically
excepted from country of origin marking requirements under
section 134.32(m), Customs Regulations (19 CFR 134.32(m)). With
certain exceptions not applicable here, Customs has ruled that
products of the U.S. which are exported for further processing
and subsequently returned, are not subject to country of origin
marking upon importation to the U.S. unless the further
processing in the foreign country constituted a substantial
transformation of the product. See HQ 732480, (July 31, 1989).
It is therefore necessary to determine whether the U.S.
balloons are substantially transformed when they are printed in
Canada. In HQ 731779, December 9, 1988, Customs ruled that the
printing of advertising information on wooden pens shaped like
baseball bats, does not constitute a substantial transformation.
We noted in that ruling, that the printing does not materially
alter the name, character, or use of the imported articles. We
conclude in this case, for the reasons presented in HQ 731779,
that the printing of balloons is not a substantial
transformation. After printing, they remain articles properly
referred to as balloons. The fact that the balloons may also be
used for advertising purposes does not in our opinion change the
underlying character or use of the articles. It is also unlikely
that the printing substantially increases the value of the
product. Therefore, we find that printing is merely a minor
manufacturing process which leaves the identity of the U.S.
articles intact. Consequently, the balloons are not
substantially transformed by the printing done in Canada and
therefore, they remain products of the U.S.
Because the ballons are not substantially transformed in
Canada, they are products of the U.S. which are exported and
returned. Under 19 CFR 134.32(m), the balloons are excepted from
the country of origin marking requirements of 19 U.S.C. 1304. We
know of no requirement either in 19 U.S.C. 1304 or elsewhere that
mandates that articles be marked to indicate the countries where
minor manufacturing operations take place. Because the printing
of the balloons represents a minor manufacturing process, it is
not necessary that they be marked to indicate that they were
printed in Canada. Accordingly, the New York ruling NY 846647
November 3, 1989, is revoked and does not have to be followed.
You should be aware, however, for those balloons that are made in
Canada, either the balloons themselves or their containers which
reach the ultimate purchasers must be marked to indicate that
they are made in Canada.
HOLDING:
The printing of U.S. made balloons in Canada is not a
substantial transformation. Because the balloons remain articles
of the U.S., under 19 CFR 134.32(m) they are excepted from the
country of origin marking requirements of 19 U.S.C. 1304. The
balloons do not have to be marked to indicate that they were
printed in Canada. NYRL 846647 is revoked.
Sincerely,
John Durant, Director
Commercial Rulings Division