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