MAR-2-05 CO:R:C:V 734706 RSD
Scott E. Rosenow, Esq.
Stein Shostak Shostak & O'Hara
1620 L Street, N.W.
Suite 807
Washington, D.C. 20036-5605
RE: Country of origin marking requirements for trading cards
printed on paperboard sheets in the U.S. and cut in Mexico;
printing; packaging; 19 CFR 134.1; 19 CFR 134.32(m)
Dear Mr. Rosenow:
This is in response to your letter dated July 1, 1992,
submitted on behalf of your client the Upper Deck Company,
requesting a ruling on the country of origin marking requirements
for trading cards. We have received a second submission from
your office dated July 9, 1992. We have also received samples of
the trading cards in sheet form before they are cut and a foil
package of the trading cards as prsented for retail sale.
FACTS:
The Upper Deck company currently manufactures sports trading
cards for basketball, baseball, football, and hockey, as well as
special Warner Brothers Looney Tunes Series called Comic Ball.
In the United States, the following operations are performed in
the production of the trading cards: player or subject
selection, card design, photograph selection, statistical and
biographical research, hologram design, card layout, color
separation, stripping, press production, coating production, and
foil production.
The cards are printed in the United States using a
lithographic process on large sheets of paperboard measuring
25.50" x 36.00". Generally, one hundred cards fit on each sheet
of paperboard. Each set of cards has a different number of
cards. For example, the baseball set is normally 800 cards,
while the Comic Ball set is 200. After the cards are printed,
but before the coating process, a foil hologram is stamped on
each card to eliminate the possibility of counterfeits.
The sheets of cards will be shipped to Mexico where they
will be fed into a card-slitting machine which cuts the sheets of
cards first horizontally and then vertically, resulting in 100
loose cards. Single cards will be stacked and eventually loaded
into a hopper on a conveyor belt. The conveyor belt contains
many hoppers which randomly dispense individual cards. The
random cards will be then grouped together in packs of 12-15
cards and wrapped in foil packs. The foil packs will be grouped
together in a box which usually contains 36 foil packs. The
boxes are shrink-wrapped and loaded into a case which usually
contains 20 boxes for shipment back to the U.S.
ISSUE:
Are the sheets of printed trading cards substantially
transformed in Mexico when they are cut, sorted, and packaged?
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).
Under 19 CFR 134.32(m), products of the U.S. which are
exported and returned are excepted from the marking requirement
of 19 U.S.C. 1304. Accordingly, it is necessary to determine if
the uncut paperboard sheets of trading cards are substantially
transformed by the processing performed in Mexico. First of all,
we note that the vast bulk of the work in producing the trading
cards, such as designing and printing of the cards, is done in
the United States. At the time they are exported to Mexico, the
trading cards are printed on paper board, but they are clearly
recognizable as trading cards, and they have all the basic
characteristics of trading cards. In Mexico, all that is done to
the paperboard sheets of cards is that they are cut, sorted, and
packaged. The name, character, and use of the cards are not
changed by the Mexican operations. Rather, we find that these
operations performed in Mexico: cutting the paper board sheets
and the sorting of the cards, are minor finishing operations.
See HQ 555241 (July 3, 1989) (the cutting of sheets of self-
adhesive office labels on backing paper was not a substantial
transformation). Moreover, the packaging of a product has been
deemed not to be a substantial transformation. See HQ 733729
(January 2, 1991). Therefore, the trading cards are not
substantially transformed in Mexico and remain products of the
United States when they return to the U.S. In accordance, with
19 CFR 134.32(m), the trading cards are excepted from the marking
requirements of 19 U.S.C. 1304.
HOLDING:
The sheets of uncut trading cards are not substantially
transformed by the operations performed in Mexico. The finished
trading cards are excepted from marking requirements of 19 U.S.C.
1304 under 19 CFR 134.32(m).
Sincerely,
John Durant, Director