MAR-2-05 CO:R:C:V 735181 RC
Mr. David Gransbury
The Ulu Factory, Inc.
298 Warehouse Avenue
Anchorage, Alaska 99501
RE: Country of origin marking for ulu knives; substantial
transformation; conspicuous location; 19 CFR 134.47;
19 CFR 134.46.
Dear Mr. Gransbury:
This is in response to your letter of April 8, 1993,
forwarded to us by the National Import Specialist (NIS) in which
you requested tariff classification and country of origin marking
rulings for a "ulu" knife made of both domestic and foreign
parts. The classification issue was addressed in a separate
reply. We regret the delay in responding.
FACTS:
You intend to import blades from Taiwan or possibly China.
The handles will be manufactured in the U.S. and affixed to the
imported blades domestically. The imported blades may require
domestic polishing. You prefer to indicate the country of origin
on the individual blades with removable stickers. The bulk
containers will also indicate the country of origin of the
blades. You believe that the imported blades undergo a
substantial transformation in the U.S. The blades may also be
"embellished" in the U.S. and require a final sharpening in the
U.S. You submitted a sample finished ulu knife, a retail box,
and a blade as imported. One side of the finished ulu knife is
visible through a transparent section of the retail packaging.
The blade is embellished with a depiction of a mountain.
Directly below the mountain appear the words "MT. McKINLEY". The
retail package indicates "the ALASKA ULU" in approximately
45 points printed across the front and back side. (A point is a
unit of type measurement equal to 0.01384 inch or nearly 1/72
inch, and all type sizes are multiples of this unit.) These
words do not indicate whether or not they are within the scope of
a registered trademark. The words "MADE IN ALASKA" also appear
on the front and back side, in approximately 9 points. Lastly,
the words "ANCHORAGE, ALASKA" appear on the back side, in
approximately 6 points.
ISSUE:
What is the acceptable country of origin marking under 19
U.S.C. 1304?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended
(19 U.S.C. 1304), requires that articles of foreign origin or
their containers be marked in a conspicuous place legibly,
indelibly, and permanently to indicate to the ultimate purchaser
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 "country of origin" for marking purposes is defined, in
section 19 CFR 134.1(b), to mean the country of manufacture,
production, or growth of any article of foreign origin entering
the U.S. The "ultimate purchaser" is generally defined, in
section 19 CFR 134.1(d), as the last person in the United States
who will receive the article in the form in which it was
imported.
As provided under section 19 CFR 134.43, knives and parts of
knives shall be marked legibly and conspicuously by die stamping,
cast-in-the-mold lettering, etching (acid or electrolytic),
engraving, or by means of metal plates which bear the prescribed
marking and which are securely attached to the article in a
conspicuous place by welding, screws, or rivets. However,
section 19 CFR 134.32(d), articles for which the marking of the
containers will reasonably indicate the origin of the articles
are excepted from marking requirements.
An exception from marking is provided under section 19 CFR
134.35 when a domestic processor converts or combines an article
of foreign manufacture into an article having a new name,
character, or use. This constitutes a substantial transformation
and the domestic processor is deemed the "ultimate purchaser" of
the imported article. The question of when a substantial
transformation occurs for marking purposes is a question of fact
to be determined on a case-by-case basis. Uniroyal Inc. v.
United States, 3 CIT 220, 542 F.Supp. 1026 (1982), aff'd, 1 Fed.
Cir. 21, 702 F.2d 1022 (1983). Assembly operations which are
minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See,
C.S.D. 85-25 (September 25, 1984).
As provided in section 134.14, Customs Regulations (19 CFR
134.14), when an imported article is of a kind which is usually
combined with another article after importation but before
delivery to an ultimate purchaser and the name indicating the
country of origin of the article appears in a place on the
article so that the name will be visible after such combining,
the marking shall include, in addition to the name of the country
of origin, words or symbols which shall clearly show that the
origin indicated is that of the imported article only and not
that of any other article with the imported article may be
combined after importation.
Customs issued a classification ruling, HQ 954177 (July 30,
1993) with respect to the blades of the instant knives, and held
that the knives were used principally for cutting, not chopping
or mincing. In HQ 732057 (April 16, 1990), Customs ruled that
the assembly by attaching circular knife blades to handles of a
rotary cutting instrument was not a substantial transformation
and Customs required the blade be marked "Blade made in Taiwan".
Customs has found that a manufacturer who completes a
kitchen knife in the U.S. would be the ultimate purchaser of
imported knife blade stubs. See HRL 709090 (June 19, 1978).
Here, we distinguish the ulu knife as a utility knife rather than
a kitchen knife. As in HQ 732057 (April 16, 1990), the domestic
processing does not substantially transform the imported ulu
knife blades. Therefore, the ultimate purchaser is person who
buys at retail, not the Ulu Factory. The foreign origin of the
blades must be indicated, as provided at 19 CFR 134.43, by die-
stamping, etching, engraving, or cast-in-the-mold lettering. We
suggest that words such as, "blade made in Taiwan" or the like
may be used to distinguish the origin of the blade from that of
the knife handle. If the knives are sold only in retail
packaging, you may choose to indicate the country of origin
marking on the package in lieu of marking the blade itself.
(See 19 CFR 134.32(d))
Section 134.46, Customs Regulations (19 CFR 134.46),
provides in relevant part that when letters or words indicating
the name of a country or locality other than the country of
origin appear on an article, the name of the country of origin
must appear "in at least comparable size" and "in close
proximity" to such letters or words. emphasis added.
Under section 134.47, Customs Regulations (19 CFR 134.47),
when a trademark or trade name marking indicates the name of a
country or locality other than the country of origin, the country
of origin shall be indicated either "in close proximity or in
some other conspicuous location" preceded by "Made in", "Product
of", or similar words. emphasis added.
In HQ 735085 (June 4, 1993), Customs ruled that a line of
frozen produce containing constituents of foreign origin and
prominently named "American Mixtures" in many locations on the
package was required to be marked to indicate the country of
origin marking on the front of the package. There, Customs
counted at least 20 references to America or a U.S. location on
the packaging.
You have not advised us whether "the ALASKA ULU Knife"
is a registered trademark. In any event, it appears that
"Mt. McKINLEY" is a souvenir marking under 19 CFR 134.47. As a
souvenir marking, the country of origin marking may appear in
close proximity to the U.S. reference or in some other
conspicuous location. However, in this instance, there are so
many references to "Alaska" that we will require the country of
origin marking to appear on both the front and back sides of the
packaging. The prominence of the word "Alaska" is such that
country of origin marking on this packaging is not in a
conspicuous location unless it appears on the front side of the
retail package.
This requirement is consistent with previous determinations
in which we have found that marking which might otherwise have
been in a conspicuous place is inadequate because of the
appearance of words and symbols which might, in their context,
suggest to the ultimate purchaser a country of origin other than
the actual country of origin of the foreign article.
Based on our finding that the knife blades are not
substantially transformed, Customs takes exception to the marking
"Made in Alaska". You are cautioned that "Made in Alaska" may
violate laws administered by the Federal Trade Commission (FTC),
which has authority over certain trade practices in domestic
commerce.
HOLDING:
We find that the foreign manufactured knife blades do not
undergo a substantial transformation in the U.S. Therefore, the
ultimate purchaser is the retail purchaser. Given the numerous
references to "Alaska" on the packaging, the country of origin
marking must appear on the retail packaging on the front and
rear of the package. As indicated above, the marking could be in
a phrasing such as: "blade made in Taiwan".
Sincerely,
John Durant, Director