Mar-2-05 CO:R:C:V 735399 AT
District Director of Customs
200 East Bay Street
Charleston, South Carolina 29401-2611
RE: Country of origin marking of automotive parts imported from
various countries into a foreign trade zone in the U.S. to be
used in the manufacture of automobiles; 19 U.S.C. 81(c);
C.S.D. 83-48
Dear Madam:
This is in response to your memorandum dated October 14,
1993, forwarding a request by BMW Manufacturing Corporation and
BMW North America ("BMW"), dated September 15, 1993, for a ruling
on the country of origin marking requirements for automotive
parts imported from various countries into a foreign trade zone
to be used in the manufacture of automobiles. We are treating
your memo as a request for internal advice.
FACTS:
BMW intends to import automotive parts from various
countries into a foreign trade zone located in Spartanburg
County, South Carolina. Once imported into the foreign trade
zone, the parts are to be used in the manufacture of finished
automobiles. We have assumed for purposes of our response that
the automotive parts admitted in the foreign trade zone will be
treated as nonprivilege foreign. BMW states that commercial
invoices will accompany the imported parts indicating the country
of origin of each imported article to be used in the
manufacturing process. BMW has requested that Customs grant an
exception from marking the individual parts as well as their
containers with the country of origin based on 19 U.S.C.
1304(a)(3)(H) and 19 CFR 134.35.
ISSUE:
Are the individual auto parts and/or their containers
required to be marked with their country of origin at the time of
importation if they are to be admitted into a foreign trade zone
and later used in the manufacture of finished automobiles?
LAW AND ANALYSIS:
19 U.S.C. 81c provides, in part that:
[f]oreign and domestic merchandise of every description,
except such as is prohibited by law, may, without being
subject to the customs laws of the United States, except
as otherwise provided in this chapter, be brought into a
zone ..., and be exported, destroyed, or sent into
customs territory of the United States therefrom, ...
but when foreign merchandise is so sent from a zone into
customs territory of the United States it shall be
subject to the laws and regulations of the United States
affecting imported merchandise....
Thus, merchandise is generally not subject to the customs
laws while in a foreign trade zone, unless the Foreign Trade Zone
Act authorizes their application. However, once merchandise is
withdrawn from a foreign trade zone and entered into the customs
territory of the U.S., it becomes subject to the customs laws and
regulations of the U.S.
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.
Customs has determined in C.S.D. 83-48 (February 4, 1983),
that articles brought to the U.S. and admitted into a foreign
trade zone are not subject to the requirements of 19 U.S.C. 1304
at that time. See also, HQ 734076 (September 10, 1991).
Accordingly, since in this case, the automotive parts are
imported and admitted into a foreign trade zone by BMW, the
marking requirements of 19 U.S.C. 1304 are not applicable. Thus,
it is not necessary to determine whether a marking exception
exists under 19 U.S.C. 1304(a)(3)(H) and 19 CFR 134.35, since the
imported parts and/or their containers do not have to satisfy 19
U.S.C. 1304 marking requirements as held in C.S.D. 83-48. However, merchandise processed in a foreign trade zone must
be marked to indicate its country of origin at the time it is
withdrawn from the zone and brought into the customs territory
for consumption, unless the article is substantially transformed
in the foreign trade zone. It would appear without further
information, that the imported auto parts are substantially
transformed as a result of the manufacturing operations performed
in the U.S. to make the finished automobiles. Thus, the finished
automobiles would not be subject to the country of origin marking
requirements of 19 U.S.C., when entered into the Customs
territory of the U.S.
Also, we have assumed that BMW will comply with all
provisions set forth in 19 CFR Part 146 regarding the admission
of merchandise into a foreign trade zone. Any auto parts which
are withdrawn from the foreign trade zone by BMW for use as
replacement parts must satisfy 19 U.S.C. 1304 marking
requirements.
HOLDING:
As the imported auto parts will be admitted into a foreign
trade zone, pursuant to 19 U.S.C. 81c, they are not subject to 19
U.S.C. 1304 marking requirements provided Customs is assured that
the articles are admitted into the zone in accordance with the
requirements set forth in 19 CFR Part 146. Further, provided it
is determined that the imported auto parts are substantially
transformed in the foreign trade zone when manufactured into
finished automobiles, the automobiles will not be subject to
country of origin marking requirements of 19 U.S.C. 1304, when
entered into the Customs territory of the U.S.
Any auto parts which are withdrawn from the foreign trade
zone into the Customs territory of the U.S. for use as
replacement parts must satisfy 19 U.S.C. 1304 marking
requirements.
This decision should be mailed by your office to the
internal advice requestor no later than 60 days from the date of
this letter. On that date the Office of Regulations and Rulings
will take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Lexis, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director