MAR-2-05 CO:R:C:V NL
Mr. Kyu Byun, Purchasing Manager
Western American Manufacturing, Inc.
6725 Customhouse Plaza Drive, Suites I & J
San Diego, CA 10048
RE: Country of Origin Marking - Steel Pipe Cut to Length;
Threading; VRA Export Certification. NY 860425
Dear Mr. Byun:
This is in response to your letter of January 25, 1991, to
the Area Director of Customs, New York Seaport, which has been
forwarded to this office for disposition.
FACTS:
Western Manufacturing plans to import 21' lengths of steel
pipe from Korea to the U.S., from where it will be sent to Mexico
for processing. The Mexican operations will consist of cutting
the pipe into lengths ranging from 12" to 120", and threading
both ends. The cut sections would then be imported into the U.S.
for use as nipples.
The question posed is whether the processing in Mexico
effects a change in the country of origin of the material, which
otherwise would be marked as originating from Korea and would
enter the U.S. after processing in Mexico under export
certificates issued by the Korean government.
The National Import Specialist, New York Seaport, has
prepared a memorandum (file 860425, March 13, 1991) addressing
these points which has been transmitted with your letter. In
brief, the NIS finds that the processing in Mexico does not
effect a substantial transformation. The cut lengths are thus to
be marked as products of Korea, and may enter the U.S. after
processing in Mexico under Korean export certification. This
office is in complete agreement with the findings of the NIS.
ISSUE:
What is the country of origin of the cut and threaded pipe
as imported into the U.S.?
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 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.
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(d) provides that an article is
considered to originate in the country in which it was
manufactured, produced, or grown. Further work or material added
to an article in a second country must effect a substantial
transformation in order to render such other country the country
of origin. A substantial transformation is said to occur if
after manufacture or processing an article emerges having a new
name, character, or use. See 19 CFR 134.35.
In this case it is our opinion that the processing in Mexico
does not change the Korean-origin pipe into an article of
Mexican origin. First, as noted in the memorandum of the NIS,
Customs has taken the position that the threading of steel pipe
will not be deemed to change its country of origin. See T.D. 87-
46. Second, cutting the pipe to lengths of between 12" and 120"
does not change the name, character, or use of the pipe. In this
regard we note that Customs has previously taken the position
that lengths of pipe cut to 12" or more are considered pipe for
classification purposes. See T.D. 67-249(12). Accordingly, the
cutting to lengths of more than 12" each and threading of the
pieces in this instance is not regarded as effecting a change in
the Korean origin of the material.
HOLDING:
Cutting steel pipe to lengths of between 12" and 120" and
threading the pieces is not considered to effect a substantial
transformation of the steel pipe. The cut and threaded pieces
shall be marked as Korean-origin, and may enter the U.S. under
Korean export certification.
Sincerely,
John Durant
Director, Commercial
Rulings Division
cc: Assistant Area Director
Commercial Operations
New York Seaport