HQ 560202
MAR-05 RR:TC:SM 560202 KKV
Mr. Charles S. Coster
Time/By Design
277 Mt. Auburn Street
Cambridge, MA 02138
RE: Country of origin marking for imported watches
designed in the U.S.
Dear Mr. Coster:
This is in response to your letter dated November 12,
1996, which requests a ruling concerning the country of
origin marking requirements for imported watches which have
been designed in the United States and assembled in China
with components from China, Japan, Hong Kong and Singapore.
Your letter incorporates by reference the facts contained in
your earlier correspondence dated March 27, 1996.
Additionally, a sample of the watch case without a watch
strap has been submitted for our consideration.
FACTS:
You indicate that Time/By Design plans to import liquid
crystal display (LCD) watches into the United States which
were designed in the United States. Integrated circuits
from Singapore and other watch components from Japan and
Hong Kong are sent to China, where they are combined with
other components from China and assembled into finished LCD
watches and exported to Hong Kong for shipment to the U.S.
You propose to mark the watches, "Designed in USA. Made in
Singapore" stamped into the reverse side of the metal watch
case.
ISSUE:
What are the country of origin marking requirements for
finished LCD watches assembled in China of components from
Singapore, Japan, China and Hong Kong?
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. Friedlander & Co., 27 C.C.P.A. 297
at 302; C.A.D. 104 (1940).
We note that while additional U.S. Note 4, Chapter 91,
HTSUS, contains special marking requirements for certain
watches, they are not applicable to "[m]ovements with
opto-electronic display only and cases designed for use
therewith." Because the watches at issue are specifically
excepted from the special marking requirements set forth in
additional U.S. Note 4, the articles must comply with the
general marking requirements set forth in 19 U.S.C. 1304.
Part 134, Customs Regulations (19 CFR Part 134),
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304. Section 134.46, Customs
Regulations (19 CFR 134.46), contains more restrictive
marking requirements designed to alleviate the possibility
of misleading an ultimate purchaser with regard to the
country of origin of an imported article. Specifically, 19
CFR 134.46 requires that, in instances where 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. Customs
has ruled that in order to satisfy the close proximity
requirement, the country of origin marking must appear on
the same side(s) or surface(s) in which the name of the
locality other than the country of origin appears ( See HQ
708994, dated April 24, 1978).
In the instant case, integrated circuits from Singapore
and other watch components from Japan and Hong Kong are
exported to China, where they are combined with additional
components from China and assembled into finished watches.
The finished watches are sent to Hong Kong for exportation
to the U.S.
It has long been Customs position that the origin of a
watch or clock is the country of manufacture of the watch or
clock movement. Although the addition of the hands, dial,
case or watchband may add definition to the timepiece, it
does not substantially change the character or use of the
watch or clock movement, which is the essence of the watch
or clock (See Headquarters Ruling Letter 735197, dated
January 4, 1994). Note 3, Chapter 91 of the Harmonized
Tariff Schedule of the United States (HTSUS) states:
For the purposes of this chapter, the
expression "watch movements" means
devices regulated by a balance wheel and
hairspring, quartz crystal or any other
system capable of determining intervals
of time, with a display or a system to
which a mechanical display can be
incorporated. Such watch movements shall
not exceed 12 mm in thickness and 50 mm
in width, length or diameter. [Emphasis
ours.]
The watch in question has a liquid crystal display;
your letter indicates that the integrated circuit is the
component which functions as the watch movement for this
type of watch. Under the manufacturing scenario you
propose, because the integrated circuit, which is the system
capable of determining intervals of time, is a product of
Singapore, the origin of the finished watches assembled in
China is Singapore.
Additionally, with regard to the watch strap or band,
Customs has determined that watch strap must be separately
marked when its country of origin is different than the
watch. This is because the attachment of the watch strap to
the watch does not effect a substantial transformation of
the watch strap; after attachment, the strap maintains its
separate identity. See HQ 734565 (October 16, 1993).
Therefore, the country of origin of the watch strap must
appear legibly, conspicuously, and permanently whether
imported together with the watch or separately.
With regard to your proposed marking, we note that
Customs has previously allowed the phrase "designed in" to
be used in conjunction with country of origin information.
In Headquarters Ruling Letter (HRL) 726695 (dated October
19, 1984), Customs ruled that the words "Designed in West
Germany" could appear on packages of imported ornaments so
long as the requirements of 19 CFR 134.46 and the
requirements of 19 U.S.C. 1304 were satisfied. Likewise, in
HRL 734144 (dated July 5, 1991) Customs held that a label
marked "Designed in U.S.A." with the words "Made in (Country
of Origin)" in close proximity and in the same size and
color as the words "Designed in U.S.A." satisfies the
marking requirements of 19 U.S.C. 1304 and 19 CFR 134.46 so
long as the words "Made in (Country of Origin)" are legible,
conspicuous and permanent. Therefore, in regard to the
watches you plan to import, because the origin
of the watch is Singapore, the marking "Designed in USA.
Made in Singapore" stamped into the reverse side of the
metal watch case would be acceptable to Customs.
HOLDING:
The country of origin of a LCD watch assembled in China
utilizing an integrated circuit from Singapore and other
watch components from China, Japan and Hong Kong, is
Singapore and must be marked accordingly. Additionally, the
watch strap of the finished watch must be marked with its
separate country of origin.
The phrase "Designed in USA." with the words "Made in
Singapore" in close proximity and in the same size and color
as the words "Designed in U.S.A." satisfies the marking
requirements of 19 U.S.C. 1304 and 19 CFR 134.46 if the
words "Made in Singapore" are legible, conspicuous and
permanent.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are 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
Tariff Classification
and Appeals Division