MAR-2-05 CO:R:C:V 735401 RC
District Director of Customs
Portland, Maine
RE: Country of origin marking for promotional items, conspicuous,
give-aways, ultimate purchaser; 19 CFR 134.41; HQ 733940
Dear Sir:
This is in response to your memorandum of October 15, 1993,
requesting Internal Advice regarding the country of origin marking
requirements for novelty promotional items. A sample shell was
submitted. Please furnish a copy of this decision to the importer.
FACTS:
Falcon Rule imports miniature wooden baseball bats
manufactured in Taiwan. In the U.S., imported bats will be
combined as shells with pen or key ring components of U.S. origin.
Falcon Rule will distribute the finished products to various
companies who in turn will give them away to their clients or
customers for promotional purposes. Any promotional message will
be imprinted upon the bats in the U.S.
ISSUE:
Whether the imported shells undergo a substantial
transformation in the U.S. and are excepted from 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) 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. Under 19 CFR 134.1(d), the ultimate purchaser is
defined generally as the last person in the U.S., who will receive
the article in the form in which it was imported. With respect to
promotional items, 19 CFR 134.1(d)(2) indicates that if the
imported article is distributed as a gift the recipient is the
"ultimate purchaser."
The country of origin for marking purposes is defined at
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. 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
Part 134. A substantial transformation is effected, under 19 CFR
134.35, when a manufacturer or processor in the U.S. converts or
combines an imported article into a new and different article
resulting in a change in name, character, or use. As such, the
U.S. manufacturer or processor is considered the "ultimate
purchaser" of the imported article and the article shall be
excepted from marking.
In HQ 734053, (copy enclosed) Customs ruled that the domestic
assembly of foreign-manufactured pen components, a barrel, plug,
cap, and conical tip, did not effect a substantial transformation.
Likewise, Customs has ruled that the promotional painting or
printing of the shells does not effect a substantial
transformation. See HQ 734202 (November 12, 1991)(copy enclosed).
Because the pens or key rings are given away by businesses for
promotional or advertising purposes, under the Customs regulations,
the recipient of the pens is considered the ultimate purchaser.
Therefore, the finished pens and key rings must be marked
permanently, legibly and conspicuously, to indicate their country
of origin to their recipient. See Pabrini, Inc. v. United States,
630 F.Supp 360 (C.I.T., 1986); HQ 734053 (September 20, 1991) and
HQ 734202 (November 12, 1991).
HOLDING:
The foreign-manufactured bats do not undergo a substantial
transformation in the U.S. by being further processed in the U.S.
In order to satisfy 19 U.S.C. 1304, the pens must be properly
marked to indicate the country of origin to the person who receives
them as a promotional item. The Office of Regulations and Rulings
will take steps to make this 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 60 days from the
date of this decision.
Sincerely,
John Durant, Director
Commercial Rulings Division