MAR 2-05 CO:R:C:V 729308 LR
Judy Bradt
Canadian Embassy
2450 Massachusetts Ave., NW.
Washington, DC 20008-2881
Re: Country of Origin Marking Requirements for Earrings
Manufactured in the U.S. and Painted in Canada
Dear Ms. Bradt:
This ruling is in response to your letter submitted on
behalf of Polyn Inc. (the Company) requesting a ruling on the
marking requirements of earrings imported from Canada.
FACTS:
The Company purchases unpainted earrings in the U.S. and
ships them to Canada where they are painted a solid color and re-
exported to the U.S. (Although not specifically stated, we assume
that the earrings are made in the U.S.) The painted earrings are
shipped to the U.S. loose in bags. The U.S. purchaser pairs the
earrings, puts them on cards and attaches butterfly clasps so
that they may be worn by women with pierced ears. Samples of the
unpainted and painted earrings have been submitted.
ISSUE:
Whether U.S.-made earrings which are sent to Canada for
painting have to marked as a product of Canada.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), requires that every article of foreign origin (or its
container) imported into the U.S., subject to certain specified
exceptions, 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. U.S. products exported and returned
are specifically excepted from country of origin marking
requirements under section 134.32(m), Customs Regulations (19 CFR
- 2 -
134.32(m)). In applying this section, Customs has ruled that
products of the U.S. which are exported and returned are
generally not subject to country of origin marking unless, prior
to their return, they are substantially transformed. See HQ
729519, dated May 18, 1988, in which this principle is restated.
In order for a substantial transformation to be found, an
article having a new name, character, or use must emerge from the
processing. See United States v. Gibson-Thomsen Co. Inc., 27
C.C.P.A. 267, C.A.D. 98 (1940).
Customs has not previously ruled on whether the painting of
earrings constitutes a substantial transformation for marking
purposes. However, in HQ 071362, dated June 23, 1983, and HQ
071363, dated August 25, 1983, two cases involving a substantial
transformation question relevant to the determination of whether
certain toy figures and plastic figures were eligible for
benefits under the Generalized System of Preferences (GSP),
Customs found that the painting of the figures did not constitute
a substantial transformation. In another marking case involving
painting (HQ 707057, dated December 10, 1976), Customs ruled that
hand painting and firing of a vase did not constitute a
substantial transformation so as to change the country of origin.
Finally, in Madison Galleries, Ltd. v. United States, Slip Op.
88-71 (June 7, 1988), a recent court case involving the issue of
whether certain vases were eligible for the benefits of GSP, the
Court of International Trade determined that the vases were
substantially transformed when they were decorated with oriental
designs and scenes through painting and firing, which steps were
repeated to provide surface relief and a multi-dimensional effect
to the depictions. The cost of such processing equaled or
exceeded 35 percent of the appraised value of the pieces. It is
noted that this case is now on appeal.
Based on the above determinations, we are of the opinion
that the painting of the earrings in Canada does not change the
name, character, or use of the earrings in question. While
painting is certainly necessary before the earrings can be sold
to the consumer, we find that it is a minor finishing operation
which leaves the fundamental identity of the earrings intact.
Unlike the painting in the Madison Galleries case which produced
a highly decorative article with artistic qualities, the earrings
here are painted a solid color and lack any artistic and
decorative effects. Moreover, while no cost figures have been
submitted, it does not appear that the painting significantly
increases the value of the earrings.
- 3 -
HOLDING:
Based on the above considerations, we find that the
painting of the earrings in Canada does not constitute a
substantial transformation. As such, if the earrings are made in
the U.S. they are excepted from marking pursuant to 19 CFR
134.32(m).
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch
1cc: CO:R:C:V:LRODBART:LDC:8/11/88
Ms. Judy Bradt
Commercial Officer (Market Access)
Canadian Embassy
2450 Massachusetts Ave. NW.
Washington, DC 20008-2881