MAR-2-05 CO:R:C:V 734503 RSD
Patrick C. Reed, Esq.
Freeman, Wasserman & Schneider
New York, New York 10038
RE: Country of Origin marking for a crystal lamp assembled in
the U.S., assembly, domestic components; 19 CFR 134.35, 19 CFR
134.14; National Hand Tool Corp. v. United States, Torrington
Co., v. United States
Dear Mr. Reed:
This is in response to your letter dated February 18, 1992,
on behalf of your client Lenox, Incorporated, (Lenox), requesting
a ruling on the country of origin marking requirements for a cut
crystal piece used in the making of an electric lamp.
Accompanying your submission were photographs of the crystal
lamps. We have received supplemental submissions dated March 11,
1992, April 16, 1992, and May 26, 1992. The April 16, 1992,
submission included a schematic diagram of the lamp. You have
also furnished a sample of a crystal lamp for our consideration.
FACTS:
Lenox plans to sell a lamp in which the lampstand is
composed partly of a spherical piece of cut crystal. The lamp
will be available in several sizes. Lenox intends to import the
crystal piece which is to be manufactured and cut outside of the
U.S. The crystal piece would be imported into the U.S. in a
condition ready to be incorporated into the lampstand. At
present Lenox has received sample crystal pieces from Hungary,
but in the future it may also use crystal pieces made in Germany.
The other components of the lamp are either made in the U.S. or
are imported from Taiwan, Italy, or other countries besides
Hungary or Germany. You indicate the following is the country of
origin and relative costs of the major components of the lamp:
Component Relative Cost Origin
Crystal piece 26% Hungary
Shade 24% USA
Cap 0.5% USA
Base 21% Taiwan
Misc. Parts 3.5% USA
Misc. Parts 7% Imported
Processing etc. 18% USA
The finished lampstand will consist of the crystal in the
middle, a brass piece forming the base and the legs, and a brass
piece forming the top. Another brass piece will form a stem
running from the bottom metal piece through the crystal piece and
the top metal piece, and extending upward to hold the light-bulb
socket. The stem will also support the harp for the lamp shade,
which will be screwed to the stem by a brass finial.
You indicate that the assembly needed to the make the
finished crystal lamp requires three workers: an assembler, a
wirer, and a packer. The first worker, the assembler, begins
with the pipe, which is threaded at the top and bottom. She
places a lock washer on the bottom of the pipe, screws a hex nut
onto the pipe under the lock washer, and screws a plastic
protective bushing onto the pipe under the hex nut.
The assembler pushes the pipe through the base and through
the crystal piece, which she aligns against the base. She then
passes the top of the pipe through the cap and brings the cap
down along the pipe until it sits on top of the crystal piece.
The assembler places the neck over the pipe and rests it on
top of the cap. A lock washer is placed over the neck and, above
the lock washer, a hex nut is screwed on and then tightened. The
base, crystal piece, cap and neck are held in place by the lock
washer and hex nuts at top of the pipe.
The second worker, the wirer, takes the electric plug-and-
wire assembly and passes the wire through the pipe from the
bottom until the end of the wire emerges from the bottom half of
the socket attached to the pipe.
The wirer loosens the contact screws on the socket, ties an
"Underwriters knot" in the wire to prevent it from being pulled
down the pipe, bends the uninsulated ends of the wire around the
contact screws, and tightens the contact screws.
The wirer puts a fiber insulating sleeve over the lower part
of the socket and then attaches the upper part of socket to the
lower part of the socket. She then aligns the socket with the
harp yoke and screws the turn-knob into the socket.
The wirer then conducts an Underwriters test to assure that
the lamp functions safely.
The third worker, the packer, is responsible for boxing and
packing the assembled lamp with the harp, shade, and finial.
The crystal piece is specifically designed for Lenox for use
in making the lamp and Lenox is not aware any other use for the
crystal piece. We have been informed that the crystal piece has
a hole drilled in the bottom when it is imported. Although the
crystal piece has not been formally entered, you believe that the
most appropriate classification would be the provision for lamp
parts of glass, other, in subheading 9405.91.60, HTSUS,
Harmonized Tariff Schedule of the United States.
ISSUE:
Are the cut crystal pieces substantially transformed when
they are assembled with other lamp components?
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).
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. In such circumstances, the
imported article is excepted from marking. The outermost
containers of the imported articles shall be marked. (See 19 CFR
134.35).
In C.S.D. 85-25, (HQ 071827), (September 25, 1984), Customs
held that an assembly will not constitute a substantial
transformation unless the operation is "complex and meaningful."
Customs criteria for whether an operation is "complex and
meaningful" depends on the nature of the operation, including the
number of components assembled, number of different operations
involved, and whether a significant period of time, skill, detail
and quality control are necessary for the assembly operation.
This criteria for determining whether a substantial
transformation occurs is applied on a case-by-case basis. In
C.S.D. 80-111, HQ 710564, (September 24, 1980), Customs
considered whether the domestic manufacturing processes through
which imported ceiling fan components become finished fans
constituted a substantial transformation. In this ruling, it was
stated that mere assembly of parts will not constitute a
substantial transformation. We concluded that the assembly of
the fan was not a substantial transformation because the
processes were basically assembly line procedures which did not
physically alter the components. Furthermore, we noted that the
manufacturing processes were mere combining processes that were
not complex or did not require a great deal of skill.
Similarly, in this case, based on your description of the
assembly process and an examination of the sample, we conclude
that the U.S. processing is a simple manual assembly operation of
basically finished parts. We note that when the crystal piece is
imported there is a hole already cut into the bottom so no
drilling is necessary. The combining of the crystal piece with
the brass base and the other components is a relatively simple
operation which does not take a great deal of time and skill.
Basically, all that is needed to make the lamp is the feeding a
pipe, a few wires, and other pieces through the crystal piece
and lining up these pieces and screwing and tightening them
together so that electric current can run through and give off
light. The crystal piece is not processed or changed in any way.
After the assembly, it remains identical in shape, size,
appearance, and structure, and it remains recognizable as the
crystal piece. Clearly, the character of the crystal piece does
not change as a result of the assembly operation.
In National Hand Tool Corp. v. United States, Slip Op. 92-61
(April 27, 1992), the Court of International Trade held that
imported hand tool components which were used to produce flex,
sockets, speeder handles, and flex handles were not substantially
transformed when further processed and assembled in the U.S. One
of the factors considered by the court in reaching its conclusion
was that the name of the imported components did not change as a
result of the U.S. processing and assembling operations. The
court recognized, as imported, each article already had the name
of a completed tool. The court also considered whether the use
of the imported components changed as a result of the processing
and assembling operations performed in the U.S. In finding that
the use of the imported components did not change, the court
stated that the use of the imported articles was predetermined at
the time of importation due to the fact that each component was
intended to be incorporated in a particular finished mechanics'
hand tool.
We note that the use of the crystal piece was predetermined
as part of a lamp at the time importation. This is demonstrated
by the fact that the crystal piece has a hole already cut into
its bottom at time it is imported. Lenox further indicates in
its March 12, 1992, submission that the crystal piece is designed
specifically for Lenox and as far as Lenox is aware, it is not
likely to be used for other purposes. Although the fact that an
article had a predetermined use at the time of importation does
not preclude the finding of substantial transformation, it is a
factor that can used in reviewing the totality of the evidence in
determining if there was a substantial transformation. See,
Torrington Co., v. United States, 764 F.2d. 1563 (1985).
In previous rulings involving U.S. manufacturing
operations, we have considered the origin of the components as a
relevant factor and the addition of significant U.S. components
as an important indicia of a substantial transformation. For
example, in HQ 730069, (December 23, 1986), a substantial
transformation of imported jack components was found based in
large part on the fact that significant domestic components were
added in the U.S. See also HQ 734259, (April 13, 1992)
(imported baler housing substantially transformed when combined
with essential U.S. components to make high density hydraulic
balers), and HQ 7095570, (November 24, 1978), (imported electric
motor substantially transformed when combined in the U.S. with
abrasive belt machine consisting of all domestic components;
however, no substantial transformation if an essential component
of the abrasive belt machine was foreign). In this case the only
U.S. components in the lamp are relatively minor. (Although the
shade is a significant item in terms of cost and function and is
of domestic origin, we do not consider it to be an integral part
of the lamp and thus we give little weight to its origin).
In terms of cost, the crystal piece is the most significant
component of lamp. The next most significant component is the
brass base which is also of foreign origin. These two components
account for more than 60 percent of the cost of the finished
lamp. (We also do not believe that the shade should be counted
toward the cost of the finished lamp because it is not
permanently attached and shades are often purchased as separate
items.) These pieces do not lose their separate identities when
the lamp is assembled. We believe that consumers largely buy
this product because of the design of the crystal. This is
indicated by the name of the product. It is not simply called a
lamp but a "crystal lamp" indicating the crystal remains the
dominant feature of the finished lamp.
Accordingly, we find that because the most important
components of the lamp are foreign and the manufacture of the
lamp results from a simple assembly of already finished
components, the crystal piece is not substantially transformed.
Consequently, Lenox is not the ultimate purchaser of the crystal
piece and it must be marked to indicate its country of origin.
This marking must make clear that it refers only to the crystal
piece and not the entire lamp. For example, "Crystal Base Made
in Hungary." See 19 CFR 134.14.
Although the scope of the ruling request and thus this
ruling is limited to the marking requirements of the imported
crystal pieces, based on a similar analysis it would appear that
the brass base is also not substantially transformed when it is
combined with the other pieces to form the lamp. It therefore
would be subject to similar marking requirements, (e.g."Brass
Base Made in Taiwan").
HOLDING:
The crystal base piece is not substantially transformed when
it is combined together with other components to make a lamp.
Thus it should be marked to indicate its country of origin a way
that makes clear that such marking refers only to the crystal.
Sincerely,
John Durant, Director
Commercial Rulings Division