MAR 2 05 RR:CR:SM 562141 MLR
Mr. David A. Lange
Thomson Saginaw Ball Screw Co., LLC
628 N. Hamilton Street
Saginaw, MI 48602
RE: Country of origin marking requirements for imported linear actuators and components; OEM; ultimate purchaser; container marking
Dear Mr. Lange:
This is in response to your letter dated May 30, 2001, requesting a ruling concerning the country of origin marking requirements for imported linear actuators and components.
FACTS:
It is stated that Thomson Saginaw Ball Screw Co., LLC, manufactures linear actuators and components in Michigan, and also purchases a few products, such as linear actuators, comprised of a motor, gearbox, and screw lift assembly, from Taiwan for sale in the U.S. It is stated that many of the imported actuators are sold to original equipment manufacturers (OEMs) for use in golf carts, lawn tractors, street sweepers, etc., and that in virtually all cases, the cost of the actuator is a small percentage of the final product cost. With respect to the imported actuators that your company sells to OEMs, you ask whether it is acceptable to mark the containers in lieu of the article itself.
ISSUE:
What are the country of origin marking requirements for the imported actuators sold to OEMs?
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. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. 1304.
In United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), the court held that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35(a).
Articles for which the containers will reasonably indicate the country of origin are excepted from marking under 19 U.S.C. 1304(a)(3)(D). For an exception to be granted under 19 U.S.C. 1304(a)(3)(D), the article must generally be imported in the container and that container must generally reach the ultimate purchaser unopened. See also 19 CFR 134.32(d).
Section 134.26 of the Customs Regulations (19 CFR 134.26), provides, in pertinent part:
Certification requirements. If an article subject to these requirements is intended to be repacked in retail containers (e.g., blister packs) after its release from Customs custody, or if the district director having custody of the article, has reason to believe such article will be repacked after its release, the importer shall certify to the district director that: … (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements.
It is important to note that the procedures set forth at 19 CFR 134.26 apply only to articles which are legally marked at the time of importation. If the articles are not legally marked at the time of importation, the presentation to Customs of the certification and notice to subsequent purchasers or repackers specified in 19 CFR 134.26 will not serve to satisfy the importer's obligations under 19 U.S.C. 1304 and Part 134, Customs Regulations (19 CFR Part 134). In determining whether the imported articles are legally marked, an article otherwise subject to individual marking may be excepted from this requirement where its container will reasonably indicate the country of origin, pursuant to 19 CFR 134.32(d).
In Headquarters Ruling Letter (HRL) 558638 dated November 18, 1994, Customs considered whether it was acceptable to mark the containers with the country of origin of certain imported gauges in lieu of marking the gauges themselves. Referring to 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d), it was determined that if Customs is satisfied that the gauges will remain in the cardboard boxes until they reached the ultimate purchaser and if the boxes were marked with the country of origin of the gauges, the individual gauges would be excepted from marking under these provisions. If the imported gauges were sold to OEMs, either the gauges or the outermost container in which the gauges were packed could be marked with the gauges’ country of origin. When imported gauges were sold to replacement part customers, HRL 558638 determined that either each gauge could be individually marked and/or the container in which each gauge was packed for sale to the replacement part customers could be marked with the country of origin of the gauge in accordance with the marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.
In this case, it is stated that the actuators will be sold to OEMs for use in golf carts, lawn tractors, street sweepers, etc. No further information regarding the processing of the actuators was provided concerning their incorporation into these articles. We note that linear actuators are used to move things and generally consist of a DC motor connected to a screw drive through a set of gears. www.eatel.net/~amptech/elecdisc/actuator.htm. Therefore, as actuators are devices that control the movement of mechanical action of a machine, it is likely that in accordance with 19 CFR 134.35(a) they will lose their essential identity when they become a part of the article they are designed to move and the OEMs will be considered the “ultimate purchasers.” Nonetheless, without additional descriptive information concerning the U.S. processing, we are unable to definitively determine that the OEMs in all instances will be considered the “ultimate purchasers.”
However, where the outermost container of the actuators is correctly marked with the country of origin of the articles contained within, the certification procedures of 19 CFR 134.26 may be utilized. The certification procedures of 19 CFR 134.26 should cover all of the actuators since it is unknown at the time of importation which actuators will be substantially transformed by the OEMs and to ensure that they are marked if they are sold by an OEM. The certification may be submitted in blanket form to cover all importations of a particular product for a given period, but the certificate must be filed at each port where the articles are entered. As 19 CFR 134.26 indicates that the certificate of marking may cover all importations of a particular product, the importer must identify that product, whether by name or by part number. Therefore, Thomson Saginaw, as the importer, must file a certification with the port director as indicated in 19 CFR 134.26(a), and must provide notice to the OEMs (who may not substantially transform the actuators or resell them) of the marking requirements, as indicated in 19 CFR 134.26(d).
HOLDING:
Based upon the information presented, the imported actuators may be excepted from individual country of origin marking provided the outermost container is marked with the country of origin of the actuators and the port director is satisfied that the actuators will reach the OEMs in these marked containers.
Where the outermost container of the actuators is correctly marked with the country of origin of the articles contained within, the certification procedures of 19 CFR 134.26(a) and (d) may be utilized to ensure that the OEMs mark the actuators if the actuators are not substantially transformed or the OEMs resell them to their customers.
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
Commercial Rulings Division