MAR-2-05-CO:R:C:S 558008 DEC
Mr. Frederick L. Ikenson
Law Offices of Frederick L. Ikenson
1621 New Hampshire Avenue, N.W.
Washington, D.C. 11434
RE: Country of origin marking requirements for imported valve
body
castings; 19 CFR 134.35(a)
Dear Mr. Ikenson:
This is in response to your letter dated July 14, 1994, in
which you seek a ruling with respect to the appropriate country
of origin marking for certain valve body castings.
FACTS:
Your client, Southland Marketing (Southland), intends to
import valve body castings from Brazil into the United States for
exclusive sale to its client, American Valve & Hydrant (AVH). AVH
plans to use the imported valve body castings in the production
of ductile iron resilient wedge valves which may be used in
drinking water distribution systems, fire protection, or waste
water systems. You indicate in your submission that AVH is fully
aware of the country of origin of all of the imported valve body
castings purchased from Southland. In addition, the outermost
packaging of the imported articles that will reach AVH will bear
a country of origin marking. No valve body casting will be sold
individually or separately.
The imported valve body castings and internal components
will be processed in the United States. The valve body casting
will be conveyed through a shot blast machine which will alter
its finish in preparation for the application of an anticorrosive
finish. A powdered epoxy coating will be applied using an
electrostatic spray.
The main assembly process will involve the installation of the
resilient wedge assembly in the valve body. The wedge assembly
contains rough iron and brass castings from United States
foundries which are processed by AVH technicians and private
contractors to prepare them for assembly.
During the main assembly phase, the resilient wedge assembly
is installed in the valve body, the nitrile rubber throat flange
gasket is positioned, and the ductile iron bonnet is secured to
the top of the valve body with six zinc-plated steel flange bolts
and titanium nitrate coated nuts. After two nitrile rubber O-rings are installed on the machine brass stem, the stem is
inserted through the bonnet and threaded into the brass wedge
nut. With the stem in place, a nitrile rubber gasket is
positioned on the top of the bonnet, and the stuffing box or
bonnet cover is attached using steel bolts and nuts. A ductile
iron operating nut or iron handwheel is secured to the top of the
brass stem. Following final production, the resilient wedge
valve is subject to a fluid-pressure shell test and a
pressurized, bi-directional wedge seal test.
ISSUE:
Whether imported valve body castings used as component parts
of ductile iron resilient wedge valves are substantially
transformed such that the castings are excepted from country of
origin marking.
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 United States 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 United
States
the English name of the country of origin of the article. Part
134 of the Customs Regulations implements the country of origin
marking requirements and exceptions of 19 U.S.C. 1304.
Part 134 of the Customs Regulations implements the country
of origin marking requirements and exceptions of 19 U.S.C. 1304.
Section 134.41(b), mandates that the ultimate purchaser in the
United States must be able to find the marking easily and read it
without strain.
Section 134.1(d), Customs Regulations, provides that the
"ultimate purchaser" of an imported article is generally the last
person in the U.S. to receive the article in the form in which it
was imported. In addition, that section provides that a
manufacturer may be the ultimate purchaser of an imported United
States article if he subjects it to a process which results in a
substantial transformation of the article.
A substantial transformation is said to have occurred when
an article emerges from a manufacturing process with a name,
character, or use which differs from the original material
subjected to the process. Torrington Co. v. United States, 764
F.2d 1563, 1568 (Fed. Cir. 1985), citing Texas Instruments, Inc.
v. United States, 631 F.2d 778, 782 (C.C.P.A. 1982), and
Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556
(1908). Section 134.35, Customs Regulations (19 CFR 134.35(a)),
states that
the manufacturer or processor in the United States who
converts or combines the imported article into the dif-
ferent article will be considered the "ultimate
purchas-
er" of the imported article within the contemplation of
section 304(a), Tariff Act of 1930, as amended (19
U.S.C.
1304(a)), and the article shall be excepted from
marking.
The outermost containers of the imported articles shall
be
marked in accord with this part.
In this case, the manufacturer of the finished valves, AVH,
is the ultimate purchaser because the imported valve body
castings undergo a substantial transformation in the United
States. Customs has consistently held that valve body castings
that are subjected to a manufacturing process whereby the
individual components lose their separate identities and become
integral components of new and identifiable products are
substantially transformed into articles with a new name,
character, and use. Headquarters Ruling Letter (HRL) 734785,
dated March 17, 1993; HRL 731307, dated February 23, 1990; HRL
731828, dated January 30, 1990; HRL 729335, dated April 18, 1986.
HOLDING:
Valve body castings imported from Brazil which are to be
used with other components of United States origin in the
manufacture of ductile iron resilient wedge valves are excepted
from individual marking pursuant to 19 U.S.C. 1304(a)(3)(D) and
19 CFR 134.35, provided that the outermost containers of the
castings are marked in accordance with 19 CFR 134.22 to indicate
Brazil as the country of origin.
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