MAR-2-05 CO:R:C:V 735192 RC
Ms. Kay Harvey
All American Golf
112 East Van Buren Street
Joliet, Illinois 60432
RE: Country of origin marking of imported golf club heads with a
trademark or trade name containing the words "American" which
will be assembled with the shafts to make the finish golf clubs
in the U.S.; substantial transformation; trade name; ultimate
purchaser; 19 CFR 134.47; 19 CFR 134.46; 19 CFR 134.36(b);
HQ 735125; HQ 734327; HQ 734785; HQ 734249
Dear Ms. Harvey:
This is in response to your letter dated May 24, 1993,
concerning the country of origin marking requirements for
imported golf bags and golf club heads to be assembled in the
U.S. with domestic shafts and domestic or foreign grips to make
finished golf clubs. The Chicago District of Customs advised you
to seek a ruling in this matter. We regret the delay in
responding.
FACTS:
All American Golf, located in Joliet, Illinois, makes and
sells golf clubs. It will import golf club heads from China and
Taiwan. The golf club heads will be assembled with U.S.-made
shafts and U.S. or Taiwanese grips in the U.S. to make finished
golf clubs. Your company's trade name "All American Golf" and
logo will appear on the retail packaging. During a telephone
conversation, on May 26, 1994, you stated that "All American
Golf" is a trademark registered with the U.S. Patent and
Trademark Office, and is the property of your company. You will
attach "MADE IN CHINA" labels to the interior of the golf bags,
three to four inches from the top. The golf bags are assembled
in the U.S. from components of Chinese and Korean origin. No
samples were submitted.
ISSUES:
Whether the imported golf club heads (and, possibly, grips)
are substantially transformed by their assembly in the U.S. with
shafts made in the U.S. and grips made in Taiwan or the U.S. into
finished golf clubs.
Whether the presence of the words "All American Golf" on
the golf clubs or their packaging triggers the country of origin
marking requirements of 19 CFR 134.146 or 19 CFR 134.47.
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 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. Part 134, Customs
Regulations (19 CFR Part 134), implements the country of origin
marking requirements and exceptions of 19 U.S.C. 1304.
As provided at 19 CFR 134.1(b), the country of origin of an
article is the country in which it was manufactured, produced, or
grown. Further work or material added in another country must
effect a substantial transformation in order to render such other
country the country of origin. A substantial transformation is
said to occur when, after processing, an article emerges having a
new name, character, or use. A manufacturer in the U.S. who
converts or combines the imported article into a different
article will be considered the ultimate purchaser of the imported
article within the meaning of 19 U.S.C. 1304, and the article is
excepted from country of origin marking. The outermost container
of the imported article must be marked in accordance with the
requirements of 19 U.S.C. 1304 and Part 134, Customs Regulations.
See 19 CFR 134.35.
Here, the issue is whether the assembly of golf clubs from
foreign-manufactured club heads (and possibly, foreign grips)
effects a substantial transformation, such that your company is
the ultimate purchaser of the heads (and grips) thereby excepting
them from country of origin marking. Customs previously has
addressed this very question several rulings and answered in the
affirmative. In ORR 824-70 (August 24, 1970), we ruled that a
manufacturer who purchased imported golf club heads, whether
finished or unfinished, and assembled them with shafts and grips
of U.S. origin into finished golf clubs, was the ultimate
purchaser of the imported heads. Provided Customs officials are
satisfied that the imported heads will be used by an original
equipment manufacturer, they may be excepted from individual
country of origin marking. To the same effect were HQ 728213
(July 3, 1985) and HQ 734136 (June 17, 1991). In each case
either the head or the shaft was of U.S. origin. See HQ 735125
(November 17, 1993). A different conclusion was reached in HQ
734256 (July 1, 1992), where both of the major components of the
club, i.e., the head and the shaft, were of foreign origin.
There, Customs stated, "the grips are much less significant
components as compared with the heads and shafts and their
insertion onto the golf clubs is fairly simple."
Consistent with these rulings, we find that in this case,
the addition of a major U.S. component - the shaft- in the U.S.
and possibly a minor foreign component - the grip- to produce the
completed "All American Golf" golf club effects a substantial
transformation of the imported head (and grip). Therefore, your
company is the ultimate purchaser of the golf club heads (and
grips), and pursuant to 19 CFR 134.35 only the outermost
containers of the imported heads (and grips) must be marked to
indicate their country of origin. The finished golf club is not
required to be marked to indicate the origin of the head (or
grip). Marking the outermost container in which the heads (and
grips) are imported and in which they reach your company would
suffice to indicate their country of origin to the ultimate
purchaser as provided at 19 CFR 134.32(d).
Under previous Customs policy, the presence of the trademark
or trade name "All American Golf" would have required that each
head be marked in such a manner that the marking will survive
processing and be visible to the purchaser of the article after
it has been processed in the U.S. As provided under section
134.36(b), Customs Regulations (19 CFR 134.36(b), exceptions from
marking "shall not apply to any article or retail container
bearing any words, letters, names, or symbols described in
sections 134.46 or 134.47 which imply that an article was made or
produced in a country other than the actual country of origin."
The logo "All American Golf" which appears on the imported heads
is within the class of words or letters so specified. Thus, the
golf club heads would not have been eligible for the exceptions
provided at 19 CFR 134.35 and 19 CFR 134.32(d).
Recently, however, Customs changed this policy so as to
permit the ultimate purchaser to utilize a trademark with the
name of a domestic locale on an imported article without
triggering 19 CFR 134.36(b). In HQ 734327 (February 17, 1993),
this office ruled that the trademark "Ray Ban USA" was not
misleading to the ultimate purchaser of the imported frames upon
which the mark appeared, as the ultimate purchaser (the importer)
then substantially transformed the frames by inserting non-
prescription lenses into them.
There, we noted that in cases in which the ultimate
purchaser is arranging the importation of articles with a
trademark affixed, which he owns, there is no risk that the
ultimate purchaser will be misled as to the actual country of
origin of the imported article. If markings which appear on the
substantially transformed articles are misleading to subsequent
purchasers of these articles, there may exist other legal
remedies beyond the scope of Section 304 of the Tariff Act.
Thus, 19 CFR 134.36(b) did not apply to require that the imported
frames be individually marked. Accord HQ 734785 (March 17, 1993)
(imported fire hydrant castings not misleadingly marked with
"Beaumont, Texas" when substantially transformed after
importation; 19 CFR 134.36(b) not triggered); HQ 734249 (June
28, 1993), ("Pro USA" logo stamped on imported golf club heads
does not trigger requirements of 19 CFR 134.36(b) provided the
U.S. processing substantially transforms the heads.)
In this case the imported heads/grips may include trademarks
owned by your company ("All American Golf"). So long as the
ultimate purchaser of the imported heads, your company, is
advised of the country of origin of the imported head or grip
(e.g., receives the head/grip in a properly marked container),
the requirements of 19 CFR 134.36(b) are not triggered and there
is no need to individually mark the head or grip with its country
of origin.
To be eligible for this exemption from the requirement of
individual marking set forth in 19 CFR 134.36(b), the importer
must satisfy Customs officials that in all instances the imported
golf club heads will be substantially transformed by your company
in the U.S. Foreign manufactured grips imported for sale as
replacement items must be marked to indicate their country of
origin. See HQ 733185 (April 11, 1990).
Insufficient information was provided regarding the
manufacture of the golf bags for us to make a country of origin
determination. If you would like a ruling on the golf bags, you
will need to provide a more detailed description of the
processing of the bag components in each country along with
samples and a description of the actual marking you intend to
employ.
HOLDING:
The above described golf club heads are substantially
transformed in the U.S. As such, they are excepted from country
of origin marking pursuant to 19 CFR 134.35. The trademark "All
American Golf", when used in the manner described above, is not
misleading to the ultimate purchaser and does not trigger the
provisions of 19 CFR 134.36(b). This ruling applies only if
Customs officials at the port of entry are satisfied that the
imported golf club heads/grips will be used by the
importer/ultimate purchaser exclusively in the manufacture of
golf clubs as described above (i.e. combined with U.S. made
shafts) and that they will imported in properly marked
containers.
Sincerely,
John Durant, Director,