MAR 2-05 CO:R:C:S 735504 AT
Randall Montgomery
Aaron J. Wayne
Customs Broker
1200 S. Inglewood Av., #200
Inglewood, CA 90301
RE: Country of origin marking requirements for imported
sunglasses, eyeglass cord holder, cloth pouch and wooden
box; substantial transformation; ultimate purchaser;
containers; 19 CFR 34.35; 19 CFR 134.23; National Hand Tools
Dear Mr. Montgomery:
This is in response to your letter dated January 27, 1994,
requesting the appropriate tariff classification and proper
country of origin marking requirements for sunglasses, eyeglass
cord holder, cloth pouch and wooden box imported from New
Zealand. Samples of these items were submitted for review. Your
classification request was addressed in HQ 955886 (May 17, 1994).
We regret the delay in responding.
FACTS:
You state that the articles to be imported from New Zealand
into the U.S. for retail sale consist of a pair of sunglasses, a
eyeglass cord holder, a cloth pouch and a wooden box. The
sunglasses are assembled in New Zealand from frames and lenses of
Hong Kong origin. The words "Dirty Dog" are printed on the sides
of the frames. The eyeglass cord holder is assembled in New
Zealand from a cord of Bali origin and rubber cord ends (used to
grip the eyeglass temples) of Taiwanese origin. The cord
measures approximately 23 inches long. The sunglasses and
eyeglass cord holder are placed in a blue woven textile bag with
a drawstring closure. The bag measures approximately 7 inches by
3 3/4 inches. On the front of the bag is a design representing a
dog with the inscription "Dirty Dog". The words "Extreme
Eyewear, New Zealand" appear directly below the design in white
lettering approximately 27 points (a point is approximately
.01384 inch or 1/72 of an inch). The bag, eyeglass cord holder,
and sunglasses are packaged in a small wooden box that measures
approximately 6 3/4 inches by 2 3/4 inches. The same design and
words that are printed on the bag appear on the front cover of
the box.
ISSUE:
What is the country of origin marking requirements for the
items imported from New Zealand in the manner described above?
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).
Country of Origin Marking Requirements of the Imported
Sunglasses:
The country of origin marking requirements for the imported
sunglasses that are to be assembled in New Zealand from frames
and lenses of Hong Kong origin depends upon whether a substantial
transformation occurs in New Zealand as a result of the assembly
operation performed there. If the frames and lenses are
substantially transformed as a result of the assembly operation,
then the country of origin of the finished sunglasses is New
Zealand.
For country of origin marking purposes, a substantial
transformation occurs when an article loses its identity and
becomes a new article having a new name, character or use. United
States v. Gibson-Thomsen Co., 27 CCPA 267 (1940); National Juice
Products Association v. United States, 10 CIT 48 (1986). Whether
a substantial transformation occurs is determined on a case-by-
case basis. In determining whether the combining of parts or materials
constitutes a substantial transformation, the issue is the extent
of operations performed and whether the parts lose their identity
and become an integral part of the new article. Belcrest Linen v.
United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed.
Cir. 105, 741 F.2d 1368 (1984). 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.'s 80-111, 89-110, 89-129, 90-51.
In National Hand Tool Corp., v. United States, Slip Op. 92-
61 (April 27, 1992), aff'd, 989 F.2d 1201 (1993), the Court of
International Trade held that imported hand tool components which
were used to produce flex sockets, speeder handles and flex
handles were not substantially transformed when further processed
and assembled in the U.S. One of the factors considered by the
court in reaching its conclusion was that the name of the
imported components did not change as a result of the U.S.
processing and assembling operations. The court found that the
name of each article imported had the same name in the completed
tool. In support of this conclusion, the court cited the
following example:
"For example, when the lug or "G-head", component of a
flex handle imported from Taiwan (Ex. E) was shown,
plaintiff's witness called it a "G-head." When the
government counsel asked the name of the part where the
lug component is attached to a completed flex handle
(Ex. J.), the witness also called it a "G-head."
The court also considered whether the use of the imported
components changed as a result of the processing and assembling
operations performed in the U.S. In finding that the use of the
imported components did not change, the court stated that the use
of the imported articles was predetermined at the time of
importation due to the fact that each component was intended to
be incorporated in a particular finished mechanics' hand tool.
Although the court recognized the fact that only one
predetermined use of imported articles does not preclude the
finding of substantial transformation (See, Torrington Co., v.
United States, 764 F.2d. 1563 (1985)), it went on to say that the
determination of substantial transformation must be based on the
totality of the evidence.
Similarly, based on the totality of the evidence in this
case, we find that the frames and lenses of Hong Kong origin are
not substantially transformed when they are assembled in New
Zealand into finished sunglasses, as the New Zealand operations
do not change the name, character or use of the frames and
lenses. Although information detailing the assembly operation was
not submitted to review, in our opinion, it appears that the
frames and lenses of Hong Kong origin are substantially finished
articles when imported into New Zealand for assembly. No further
processing needs to be performed to the individual frames and
lenses in New Zealand, except assembly which appears to be a
simple operation which does not constitute a substantial
transformation. See, HQ 728504 (October 15, 1985), mere assembly
of imported temples and fronts into eyeglass frames does not
constitute a substantial transformation. See also, HQ 733883
(February 22, 1991); HQ 734663 (September 4, 1992).
Like the hand tool components in National Hand Tool, the
frames and lenses in this case have the same name after assembly.
Although each component becomes an essential part of a completed
pair of sunglasses, each component is still referred to as a
frame or lens after assembly. Thus, none of the components would
change in name as a result of the New Zealand operations.
What is critical in ascertaining whether a substantial
transformation has occurred is whether, based on the totality of
the evidence, there has been a change in the character or use of
the article after the processing.
Likewise, as in National Hand Tool, the use of the frames or
lenses is predetermined at the time of importation. Each
component is intended to be utilized in the manufacture of a
finished pair of sunglasses. Clearly, these components do not
change in character as a result of the assembly operation. The
overall shape, form as well as size of the finished pair of
sunglasses is essentially the same as the unassembled frames and
lenses of Hong Kong origin. None of these features of the
finished pair of sunglasses has changed as a result of the New
Zealand assembly operation. After being assembled, the frames
and lenses retain their original shape and form. There is no
change in the microstructure or chemical composition as a result
of the New Zealand processing. See, Ferrostaal Metals Corp., v.
United States, 11 CIT 470, 664 F.Supp. 535 (1987). In addition,
there is no indication that the assembly operation is complex as
all the frames and lenses appear to be fully manufactured when
imported into New Zealand so that simple assembly of the
sunglasses is possible.
Accordingly, the frames and lenses of Hong Kong origin are
not substantially transformed when they are used to produce
finished sunglasses in New Zealand. Therefore, the country of
origin of the finished sunglasses imported into the U.S., is Hong
Kong and the imported sunglasses or its container must be
conspicuously, legibly and permanently marked to indicate "Hong
Kong" as the country of origin of the sunglasses. Country of Origin Marking Requirements of the Eyeglass Cord
Holder:
Like the sunglasses, the country of origin marking
requirements for the imported eyeglass cord holders assembled in
New Zealand from a woven cord of Bali origin and rubber cord ends
of Taiwanese origin depends upon whether a substantial
transformation occurs in New Zealand in that the name, character
or use of the cord and cord ends changes as a result of being
assembled into an eyeglass holder.
Based on the totality of the evidence in this case, we find
that the woven cords and rubber cord ends are not substantially
transformed when they are assembled in New Zealand into eyeglass
cord holders, as the New Zealand operations do not change the
name, character or use of the cords and cord holders.
Review of the sample indicates that the woven cords and
rubber cord ends are substantially finished articles when
imported into New Zealand for assembly. No further processing
needs to be performed to the individual cords or cord ends in New
Zealand, except assembly, which in our opinion is a simple
operation which does not constitute a substantial transformation.
The assembly operation involves a simple operation of attaching
two rubber cord ends to each end of the cord to make the eyeglass
cord holder.
Like the hand tool components in National Hand Tool, the
cords and cord ends have the same name after assembly. Although
each component becomes an essential part of a completed eyeglass
cord holder, each component is still referred to as a woven cord
or rubber cord end after assembly. Thus, neither of the
components would change in name as a result of the New Zealand
operations.
Also, the character and use of the woven cords and rubber
cord ends do not change as a result of the assembly operation.
The use of the woven cords and cord ends is predetermined at the
time of importation. Each component is intended to be utilized
in the manufacture of an eyeglass cord holder. Moreover, the
character of the cords and cord ends clearly do not change as a
result of the assembly operation. The overall shape, form as
well as size of the completed eyeglass cord holder is essentially
the same as the unassembled cord and cord ends. None of these
features of the completed eyeglass holder have changed as a
result of the New Zealand assembly operation. After being
assembled, the cords and cord ends retain their original shape
and form. Although the woven cords and rubber cord ends are not
substantially transformed as a result of being assembled into a
completed eyeglass cord holder, we find that the country of
origin of the completed eyeglass cord holder, is Bali, the
country where the woven cord is made. The woven cord clearly
imparts the essential character of the completed eyeglass cord
holder. The eyeglass cord holder's significant function and use
is to be worn around the neck. The woven cord gives the eyeglass
cord holder this significant characteristic. Whereas the rubber
cord ends only provide a means to attach the glasses to the woven
cord. Therefore, the country of origin of the completed eyeglass
cord holders imported into the U.S. with the sunglasses, is Bali,
and the eyeglass cord holder or its container must be
conspicuously, legibly and permanently marked to indicate "Bali"
as the country of origin of the eyeglass cord holder.
Country of Origin Marking Requirements of the Cloth Pouch and
Wooden Box:
Examination of the sample sunglass package indicates that
the cloth pouch and wooden box are to be used as containers for
the sunglasses and eyeglass cord holder.
Subpart C of 19 CFR Part 134, which provides for the country
of origin marking of containers, recognizes two broad categories
of containers. Section 134.23 specifies that reusable
containers, which must be individually marked with their country
of origin, are either: 1) those usual and ordinary containers
designed for or capable of reuse after their contents have been
consumed, such as heavy duty steel drums, tanks, and other
similar shipping, storage, or transportation containers; or 2)
containers which give the whole importation its essential
character, having lasting value or decorative use. Section
134.24 provides that disposable containers are the usual and
ordinary types of containers or holders, including cans, bottles,
paper or polyethylene bags, paperboard boxes, and similar
containers or holders which are ordinarily discarded after the
contents have been consumed. If a container is considered to be
disposable, the container itself is excepted from being marked
with its own origin, but it must be marked to indicate the origin
of its contents. See, 19 CFR 134.24(d).
We note that General Rule of Interpretation (GRI)5(b) of the
Harmonized Tariff Schedule (HTSUS) provides that packing
materials and packing containers entered with the goods therein
shall be classified with the goods if they are of a kind normally
used for packing the goods. This provision does not apply when
the packing materials or containers are "clearly suitable for
repetitive use". In HQ 955886 (May 17, 1994) Customs ruled that
both the cloth pouch and wooden box were classified under
subheading 9004.10.0000 since the sunglasses imparted the
essential character of the entire sunglass package. In making
that determination, we stated that the wooden box was nothing
more than packaging material under GRI 5(b) inasmuch as it was
not designed for repetitive use. Similarly, in this case, we
find that the cloth pouch is not designed for repetitive use.
Thus, the cloth pouch and wooden box are considered to be the
kind of disposable containers referred to in 19 CFR 134.24(a).
Accordingly, the cloth pouch and wooden box are not required to
be marked with their own country of origin, but must be marked to
indicate the origin of the sunglasses--Hong Kong--and eyeglass
cord holder--Bali--in accordance with 19 CFR 134.24(d).
However, because the cloth pouch and wooden box have the
words "New Zealand" printed on the front side (pouch) and front
cover (box)--an origin other than the contents--the special
marking requirements of 19 CFR 134.46 are triggered. That
section requires that when the name of any city or locality in
the U.S., or the name of any foreign country or locality other
than the name of the country or locality in which the article was
manufactured or produced, appears on an imported article or its
container, there shall appear, legibly and permanently, in close
proximity to such words, letters or name, and in at least a
comparable size, the name of the country of origin preceded by
"Made in," "Product of," or other words of similar meaning. The
purpose of 19 CFR 134.46 is to prevent the possibility of
misleading or deceiving the ultimate purchaser as to the origin
of the imported article. Accordingly, in order to satisfy the
marking requirements of 19 CFR 134.46, the cloth pouch and wooden
box must be legibly, permanently and conspicuously marked with
the country origin of the sunglasses and eyeglass cord holder in
close proximity to the "New Zealand" reference (on the same
side), in at least a comparable size lettering (27 points) and
preceded by "Made in," "Product of," or other words of similar
meaning. Marking the cloth pouch and wooden box with phrase
"Sunglasses Made in Hong Kong; Eyeglass Cord Holder Made in Bali"
would be an acceptable country of origin marking for the imported
cloth pouches and wooden boxes.
We note that provided the sunglasses and eyeglass cord
holder are sold with the properly marked cloth pouch and/or
wooden box, as described above, the sunglasses and eyeglass cord
holder are excepted from being individually marked with their own
country of origin. See, 19 CFR 134.32(d). HOLDING:
Frames and lenses manufactured in Hong Kong which are
assembled in New Zealand into sunglasses and imported into the
U.S. are not substantially transformed as a result of the
assembly operation. Accordingly, the imported sunglasses or
their containers must be marked to indicate "Hong Kong" as the
country of origin of the sunglasses.
Woven cords manufactured in Bali and rubber cord ends
manufactured in Taiwan which are assembled in New Zealand into
eyeglass cord holders and imported into the U.S. in sunglass
packages are not substantially transformed as a result of the
assembly operation. Accordingly, for the reasons stated above,
the imported eyeglass cord holders or their containers must be to
indicate "Bali" as the country of origin of the eyeglass cord
holders.
Woven pouches and wooden boxes which are imported from New
Zealand into the U.S. are considered to be disposable containers
and excepted from being marked with their own country of origin
but must be marked to indicate the origin of their contents
(sunglasses and eyeglass cord holders) in accordance with 19 CFR
134.24. Because the words "New Zealand" appear on the cloth
pouches and wooden boxes, both must be marked in satisfaction of
the special marking requirements of 19 CFR 134.46 as described
above.
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division