MAR-2-05 CO:R:C:V 734457 GRV
Mr. Matthew Chang
Assistant Vice President
C. Itoh & Co. (America) Inc.
335 Madison Avenue
New York, N.Y. 10017
RE: Country of origin marking of fishing rods assembled in
China with component parts from different countries.
Ultimate purchaser; legal sufficiency (content) of
marking; substantial transformation; 734214; T.D. 67-
173; C.S.D. 89-111; multiple-country-sourcing: 734011;
734165; T.D. 91-7; central marking; 19 CFR 134.46;
country other than the country of origin
Dear Mr. Chang:
This is in response to your letter of December 27, 1991,
requesting a ruling regarding the country of origin marking of
fishing rods from China.
FACTS:
Your company will import fishing rods assembled in China
from component parts manufactured in different countries. The
fishing rod component parts consist of semi-finished Taiwanese
rods, variously measuring 7.5-15.5 mm in diameter at the butt,
and reel seats and Korean line guides. (The top portion of the
rod is finished in China). Paint for the fishing rods will come
from Japan. No description of the Chinese assembly operation is
provided. The assembled fishing rods are estimated to cost
between $8.00-$9.00.
Although no samples of the completed article or the country
of origin marking to be employed were submitted for examination,
you request a ruling stating what the country of origin marking
on the imported products should indicate.
In a telephone conversation with a member of my staff on
January 31, 1992, Mr. McManus of your company agreed that the
imported article must be marked and indicated that a country of
origin marking such as "ASSEMBLED IN CHINA FROM COMPONENTS
MANUFACTURED IN TAIWAN, KOREA, AND CHINA" seemed appropriate.
ISSUE:
How should the imported fishing rods be marked to satisfy
the requirements of 19 U.S.C. 1304 and 19 CFR Part 134?
LAW AND ANALYSIS:
The marking statute, 304 of the Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, every
article of foreign origin (or its container) 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 pur-
chaser 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.
The primary purpose of the country of origin marking statute
is to "mark the goods so that at the time of purchase the ulti-
mate purchaser may, by knowing where the goods were produced, be
able to buy or refuse to buy them, if such marking should influ-
ence his will." United States v. Friedlaender & Co., 27 CCPA
297, 302, C.A.D. 104 (1940).
The "Ultimate Purchaser" Consideration
The "ultimate purchaser" is defined generally as the last
person in the U.S. who will receive the article in the form in
which it was imported. 19 CFR 134.1(d). If an article is to be
sold at retail in its imported form, the purchaser at retail is
the "ultimate purchaser." 19 CFR 134.1(3). The sufficiency of
the country of origin marking should be such as to afford the
"ultimate purchaser" the requisite notice that the merchandise is
of foreign origin. And Customs has previously stated that the
country of origin marking should be presented in a format that is
conspicuous: made readily apparent, 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. C.S.D. 91-23.
While determinations as to the legal sufficiency of country
of origin marking normally entail a determination that a
particular country constitutes the country of origin of a given
imported article, certain import transactions present notice
issues that concern the content the country of origin marking
should contain. Such a case is this case; it brings certain
factual and legal issues together that have not been fully
considered in past rulings. The factual issues presented reflect
certain modern trade realities/practices: the multiple-country-
sourcing of component parts not substantially transformed in any
one country. The legal issues involve the applicability of
special marking requirements where countries other than the
country of origin are denoted and whether the designation of more
than one country of origin is appropriate under the marking laws
--whether such a marking serves to aid or confuse the ultimate
purchaser's decision to buy a certain product. Accordingly, we
proceed to delineate our concerns, findings, and reasons for
determining in this case that a "central marking" that denotes
the actual countries of origin from which components parts of a
fishing rod derive, but does not specify with particularity which
component comes from which country, reasonably affords the
ultimate purchaser the requisite notice as to the foreign origin
of the imported product.
The Criteria for Determining the Country of Origin of Imported
Merchandise
The country of origin for marking purposes is defined at
134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean 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 trans-
formation in order to render such other country the "country of
origin" within the meaning of Part 134. A substantial transfor-
mation occurs when articles lose their identity and become new
articles having a new name, character, or use. Koru North
America v. United States, 12 CIT 1120, 701 F.Supp. 229 (1988).
In determining whether the combining of parts or materials
constitutes a substantial transformation, the issue is the extent
of operations performed and whether the parts lose their identity
and become an integral part of the new article. Belcrest Linens
v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2
Fed.Cir. 105, 741 F.2d 1368 (1984). Assembly operations which
are minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. As a
general rule, if materials/components are not substantially
transformed as a result of their inclusion in a set or mixed/
composite goods, then each item must be individually marked to
indicate its own country or origin.
In T.D. 67-173, 1 Cust.Bull. 366 (1967), we considered
whether the domestic assembly of fishing rod parts, imported from
only one foreign country, constituted a substantial transforma-
tion and found that it did not, stating that the assembly of all
or substantially all of the components imported did not result
in the manufacture of a new and different article. Accordingly,
we stated that one of the parts, such as the main reel housing,
should be marked to indicate the country of origin, so that the
marking remains legible and conspicuous after the reels were
assembled. This determination was followed in Headquarters
Ruling Letter (HRL) 734214 dated November 18, 1991, which
involved the foreign assembly of the same type of merchandise
--component parts imported from only one other foreign country.
As no material differences exist between the present case and
these earlier cases, we adhere to the position that the assembly
of fishing rod components do not substantially transform the
component parts. Accordingly, the imported fishing rods should
be individually marked to indicate the country of origin of each
of its component parts. However, for the reasons which follow,
we find that the "central" marking scheme proposed affords the
necessary notice to ultimate purchasers concerning the foreign
origin of the imported article and constitutes an acceptable
country of origin marking for the merchandise imported here.
The Conspicuous Marking Requirement
As the imported fishing rods must be marked, we turn to
address how the imported fishing rods should be marked to denote
the various countries of origin of the component parts. The
clear language of 1304 requires 'conspicuous' marking, and to
this end 134.41(b), Customs Regulations (19 CFR 134.41(b)),
further provides, in part, that the ultimate purchaser in the
U.S. must be able to find the marking easily--a visibility
concern--and read it without strain--a legibility concern.
Whether words are considered "conspicuous" or not is not
determined by the size of type face alone, but the location of
disclosure, and manner in which it is set off from other
information are also determinative. See, 8A Words and Phrases
366 (1951). Thus, "conspicuousness" is a relative, i.e.,
context-dependent, concept. See, C.S.D. 91-23. Because no
sample of the proposed marking was submitted for examination, we
do not address whether or not the "central marking" scheme is
legible, only whether it renders the country of origin marking
visible.
Where locations other than the country of origin of the
merchandise appear on an imported article, 134.46 imposes
further marking requirements on the imported article. It
provides that:
[i]n any case in which the words "United States," or
"American," the letters "U.S.A.," any variation of such
words or letters, or the name of any city or locality in the
United States, or the name of any foreign country or
locality other than the country or locality in which the
article was manufactured or produced, appear on an imported
article or its container, there shall appear, legibly and
permanently, in close proximity to such words, letters or
name, and in at least a comparable size, the name of the
country of origin preceded by "Made in," "Product of," or
other words of similar meaning.
The purpose of this regulation is to prevent the possibility of
misleading or deceiving the ultimate purchaser as to the origin
of the imported article. 19 CFR 134.36(b). However, this
regulation presupposes that there is only one country of origin
for imported products. Where no substantial transformation of
discreet component parts occurs, as here, other considerations
concerning the proper content of the marking for purposes of
country of origin markings must be weighed.
In C.S.D. 89-111, we considered whether a country of origin
marking which designated two countries in the alternative
(either/or) as the country of origin of the imported article was
sufficient to satisfy the requirements of 19 U.S.C. 1304 and
found that alternative marking was deficient; it did not clearly
indicate the actual country of origin. See also, Customs Infor-
mation Letter 734011 dated May 14, 1991 (alternative marking of
brass hardware and plumbing kits, etc., stated in terms such as
"one or more" ar "and/or" does not generally afford ultimate
purchasers the specific indication of the actual country of
origin required by 19 U.S.C. 1304).
However, in a recent Headquarters ruling concerning toy
building bricks (HRL 734165 dated December 2, 1991) we considered
whether a package marking scheme which identified the foreign
countries where the articles were actually made satisfied the
statutory requirements and found that, under the circumstances,
the package marking--"Made in (country of origin 1) , (country
of origin 2) , and (country of origin 3) "--properly informed
the ultimate purchaser of the foreign origin of the fungible
merchandise inside. Acknowledging that the alternative of this
position was to require that each piece of the article be
individually marked, which, in this case, would be exceptionally
burdensome and unnecessary, we held that, so long as each package
would contain pieces from the all the identified countries listed
on the package, the multiple country marking on the package would
be acceptable. And in T.D. 91-7 we stated that a "common sense"
approach to marking requirements applicable to articles in
certain circumstances would be observed.
In this case, the marking scheme proposed embraces two
separate concerns: (1) centrally locating the countries of
origin marking, and (2) not requiring the marking to specify
which component part(s) comes from which foreign country, i.e.,
what content is required in the marking. For the reasons which
follow, we are persuaded that the marking scheme in this case
achieves the marking goal of affording the requisite notice to
ultimate purchasers that the imported merchandise is of foreign
origin and outweighs an overly strict interpretation of the
statutory requirements. Regarding the central location concern,
we note that certain of the component parts (the line guides of
the fishing rod) are so small that it would be commercially
impractical to mark each component part with its country of
origin (Korea). Further, the influence such individual markings
would exert on ultimate purchaser's decisions to purchase the
imported article is not manifestly clear. Second, the necessity
for requiring each individual component part to be individually
marked would result in various markings being scattered all over
the article; ultimate purchasers would have to search the
article to discover the various countries of origin from which
each component part was derived. Such a marking result does not
appear to us to address the primary purpose of the marking laws
and leads us to find that the notice afforded ultimate purchasers
by a centrally located country of origin marking meets the
marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
Regarding the second aspect of the marking--not specifying
which component part(s) comes from which foreign country, weigh-
ing the relatively small unit cost of the merchandise ($8.00-
$9.00) with the convenience afforded ultimate purchasers by a
single conspicuous marking with the fact of the limited writing
space available at the reel seat, we are further persuaded that
the marking scheme provides the requisite notice of foreign
origin to the ultimate purchaser without causing harm to the
traditional concerns associated with country of origin marking
determinations, and further outweighs an overly strict interpre-
tation of the statutory requirements. This weighted or "common
sense" approach to country of origin marking--discussed in T.D.
91-7--is deemed appropriate in the present case.
However, because no sample of the proposed marking was
submitted for examination, we do not find that the marking you
will actually employ on the imported fishing rods meets the
conspicuousness (legible) requirements of 19 U.S.C. 1304. We
only find that its content is acceptable, i.e., legally
sufficient, for purposes of satisfying the marking requirements
concerning notice to the ultimate purchaser. Accordingly, you
are advised to check with the Customs officials at the port you
intend to import these fishing rods through to ensure that the
country of origin marking method you employ meets the conspicuous
marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
HOLDING:
A single, centrally-located, country of origin marking on
imported fishing rods that denotes both the country where the
article was assembled and the actual countries of origin from
which the component parts derive, but does not specify with
particularity which component comes from which country, such as
"ASSEMBLED IN CHINA FROM COMPONENTS MANUFACTURED IN TAIWAN,
KOREA, AND CHINA," is acceptable for purposes of 19 U.S.C. 1304
and 19 CFR Part 134, as it reasonably affords the necessary
notice to ultimate purchasers concerning the foreign origin of
the imported merchandise.
This holding is restricted to the facts presented in this
transaction and does not constitute a change in practice
concerning the general marking requirement that component parts
be individually marked to indicate their specific country of
origin.
Sincerely,
John Durant, Director
Commercial Rulings Division