CO:R:C:V 732170 EAB
Frederick L. Ikenson, Esquire
1621 New Hampshire Avenue, N.W.
Washington, DC 20009
Re: Country of origin marking of color television chassis
Dear Mr. Ikenson:
This is in reply to your letter of February 27, 1989,
requesting a ruling on the country of origin marking requirements
of television chassis containing a tuner, speaker and circuit
board components. Additional information was obtained from you
on October 19, 1989, during a telephone conversation with Mr.
Edward A. Bohannon of our staff. We regret the delay in
responding.
FACTS:
Your client imports backless television cabinets, each con-
taining a tuner, speaker and circuit board. Each cabinet and its
respective components are made and then assembled into a discrete
unit by your client's foreign subsidiary. The units exported by
the subsidiary are exclusively purchased and used by your client
in the further and final manufacture of color television receiv-
ers, i.e., 100% of the production of your client's foreign sub-
sidiary is imported by your client, and your client uses all that
it receives from its subsidiary to make its color TVs; none of
the subsidiary's production is sold to or used by other than your
client, and your client neither re-sells nor uses as replacement
parts any of the articles that it imports from its subsidiary.
To produce complete TVs in the U.S., major components such
as the color television picture tube, the deflection yoke, the
electron beam bender and degousser coil, and a remote control
unit are assembled into the chassis by your client. Wire ties
are placed and a cabinet back is attached, after which domestic
technicians test and align the finished TVs for proper operation.
Finally, the individual color TVs are packaged for distribution
to retail outlets.
ISSUE:
What are the country of origin marking requirements of un-
finished television chassis imported from a foreign subsidiary by
an American manufacturer who uses the imported chassis in the
further and final manufacture of color TVs.
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), provides that every article of foreign origin (or its
container) imported into the U.S. 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. The pri-
mary purpose of the country of origin marking statute 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 the product, if such marking should influence his
will." United States v. Friedlaender & Co., 27 CCPA 297, 302,
C.A.D. 104 (1940); National Juice Products Association v. United
States, 10 CIT, 628 F.Supp. 978 (1986).
According to United States v. Gibson-Thomsen Co., Inc., 27
CCPA 207 (1940), a manufacturer is considered the ultimate pur-
chaser if a manufacturing process is performed on an imported
item so that the item loses its identity and becomes an integral
part of a new article with a new name, character, or use. Under
these circumstances, the imported article is excepted from indi-
vidual marking requirements, provided the outermost container
which reaches the ultimate purchaser is marked with the country
of origin, see Section 134.35, Customs Regulations (19 CFR
134.35).
Customs has had the opportunity to rule on the country of
origin marking of imported television chassis on at least two
occasions.
In Headquarters Ruling Letter HQ 711967, dated March 17,
1980, Customs held that the country of origin of television sets
that are assembled in Mexico with printed circuit boards, power
transformers, yokes and tuners from Mexico, and picture tubes,
cabinets, and additional wiring from the U.S. is Mexico, as all
the components are substantially transformed by the assembly
process in Mexico. Customs found that the Korean and U.S.
components all lose their respective identities when they are
assembled together as they become integral parts of new articles
- television sets.
In Headquarters Ruling Letter HQ 730515, dated June 29,
1987, Customs held that no substantial transformation occurred
when imported chassis or cabinets were combined in the U.S. with
televisions, and that the individual television chassis were re-
quired to be marked with the country of origin. Customs found
that the placement or affixation of television sets to chassis
was a mere combining that did not result in a new and different
article of commerce.
Customs find that you client does more than merely combine
the imported chassis housing a tuner, speaker and circuit board
with the U.S. origin color TV picture tube, deflection yoke,
electron beam bender and degousser coil, and remote control unit.
Customs find that your client assembles imported chassis with
domestic components in such a manner that all components lose
their respective identities after assembly and become integral
parts of a new and different article of commerce, namely a color
TV receiver. We further find that the process of assembly in the
U.S. requires technical skill.
HOLDING:
Imported television chassis housing a tuner, speaker and
circuit board that are used in the final manufacture of color TV
receivers are substantially transformed into new and different
articles of commerce when combined with essential domestic compo-
nents. The manufacturer who uses the imported chassis in the
final manufacture of color TV receivers is the ultimate purchaser
of the imported chassis. As provided in 19 CFR 134.35, the im-
ported chassis are excepted from individual country of origin
marking so long as your client only uses them in the further man-
ufacturing of color TV receivers, and does not re-sell them or
use them as replacements parts, and the outermost containers of
the imported articles are marked with the country of origin.
Documentation to this effect may be required by Customs
officials at the port of entry.
Sincerely,
John Durant, Director
Commercial Rulings Division