MAR 2-05 CO:R:C:V 733578 EAB
Paul E. Linet, Esq.
75 Federal Street
Boston, Massachusetts 02110
Re: Country of origin marking of electrical outlet boxes
and covers to be used in the manufacture of mobile
homes and recreational vehicles. Reconsideration of HQ
729075; ultimate purchaser; original equipment
manufacturer; automotive parts; 19 CFR 134.35; 19 CFR
134.32(d); 19 CFR 134.32 (h)
Dear Mr. Linet:
This is in reply to your requests on behalf of Commander
Electrical Materials, dated May 19, 1990 and August 13, 1990,
seeking reconsideration of HQ 729075 (January 13, 1985).
In HQ 729075, material facts were that the electrical outlet
boxes and covers were made in Canada to U.S. specifications for
sale to other than original equipment manufacturers. Since those
facts are different under the present scenario, as more fully set
forth hereinafter, we find no reason to reconsider our previous
ruling.
FACTS:
Commander Electrical Materials manufactures electrical
outlet boxes and covers for sale to U.S. manufacturers of mobile
homes and recreational vehicles to be sold only in Canada. In
order to satisfy Canadian standards, the U.S. original equipment
manufacturers must purchase and use Canadian electrical outlet
boxes and covers. U.S. manufacturers of mobile homes destined
for sale in Canada are often visited by Canadian inspectors to
insure that the products to be exported to Canada meet Canadian
standards. There is a difference in construction between the
models that Commander makes for the U.S. market and those it
makes for the Canadian market. For instance, the former have
thicker walls and no ground screws.
You estimate the cost to modify existing dies to mark the
articles individually would be at least $50,000, which you aver
is prohibitively expensive.
You request an exception from individual country of origin
marking of the articles pursuant to 19 CFR {{134.32(c), (g) or
(h).
ISSUE:
What are the country of origin marking requirements of
electrical outlet boxes and covers made in Canada and used in the
U.S. manufacture of mobile homes and recreational vehicles to be
sold in Canada?
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 exceptions of 19
U.S.C. 1304.
Section 134.32(c), Customs Regulations (19 CFR 134.32(c)),
provides an exception from individual marking of articles that
cannot be marked prior to shipment to the U.S. except at an
expense economically prohibitive of their importation.
Section 134.32(g), Customs Regulations (19 CFR 134.32(g)),
provides an exception from individual marking of articles to be
processed in the U.S. by the importer or for his account
otherwise than for the purpose of concealing the origin of such
articles and in such manner that any mark contemplated by this
part would necessarily be obliterated, destroyed, or permanently
concealed.
Section 134.32(h), Customs Regulations (19 CFR 134.32(h)),
provides an exception from individual marking of articles for
which the ultimate purchaser must necessarily know the country of
origin by reason of the circumstances of their importation or by
reason of the character of the articles even though they are not
marked to indicate their origin.
Section 134.22(d)(1), Customs Regulations (19 CFR
134.32(d)(1)), provides an exception from marking of containers
of articles excepted pursuant to 19 CFR {{134.32(f), (g) or (h).
Section 134.32(d), Customs Regulations (19 CFR 134.32(d)),
provides an exception from individual marking of articles for
which the marking of the containers will reasonably indicate the
origin of the articles.
In HQ 709005 (May 26, 1978), Customs held that in instances
where it could be established to the satisfaction of Customs
officers at the port of entry that the contents of specific
shipments of automotive lock handles/assemblies with matched keys
were solely for use in the assembly and production of new
vehicles by truck manufacturers, the locks and keys would be
excepted from marking if the containers in which they were packed
were marked to indicate the country of origin.
Section 134.35, Customs Regulations (19 CFR 134.35),
provides that a manufacturer who converts or combines an imported
article into a different article will be considered the ultimate
purchaser of the imported article, and the article will be
excepted from country of origin marking. For this exception to
apply, the conversion or combining must constitute a substantial
transformation within the principle of United States v. Gibson-
Thomsen Co., Inc., 27 CCPA 267, (C.A.D. 98) (1940). In HQ 732999
(January 25, 1990), Customs determined that a U.S. manufacturer
who assembles imported automotive door hinge parts and then
incorporates the finished hinges into a vehicle is the ultimate
purchaser of the imported hinge parts. The articles were
substantially transformed as a result of the combining
operations in which they lost their separate identities;
therefore, the imported parts were excepted from individual
country of origin marking. The U.S. manufacturer stated in a
letter submitted to Customs officials that it was the ultimate
purchaser and knew by reason of its contract with the seller the
country of origin of the foreign parts. We, therefore, held that
the imported hinge parts purchased under a direct contract with
the foreign manufacturer were excepted from marking pursuant to
19 CFR 134.32(h), provided Customs officials at the port of entry
were satisfied that the articles would be used only in the
manufacture of finished door hinges and vehicles and not
otherwise sold.
In this case, we find that the imported electrical boxes and
hinges used by the original equipment manufacturer of mobile
homes and recreational vehicles, lose their separate identity as
a result of the manufacture of the mobile homes and recreational
vehicles. The importer/manufacturer is, therefore, the ultimate
purchaser of the imported articles. We also find that the
electrical boxes and covers may be excepted from individual
country of origin marking pursuant to 19 CFR 134.32(h), since the
ultimate purchaser must necessarily know the country of origin of
those articles in order to manufacture mobile homes and
recreational vehicles that conform to Canadian standards and pass
U.S. on-site inspection by Canadian officials. As noted above,
in order to conform to Canadian standards, the U.S. manufacturer
must purchase and use Canadian electrical outlet boxes and
covers.
We do not have sufficient information to determine if the
one-time $50,000 cost to modify existing dies, in conjunction
with other factors relevant to the manufacturing of the
electrical boxes and covers in Canada is prohibitively expensive,
for purposes of 19 CFR 134.32(c). As stated in your submission,
re-tooling to mark the companion articles addressed in HQ 729075
was accomplished.
Finally, we do not have sufficient information to determine,
for purposes of 19 CFR 134.32(g), if the U.S. manufacturing
operations would necessarily obliterate, destroy or permanently
conceal any marking on the electrical boxes or covers.
HOLDING:
Electrical boxes and covers manufactured in Canada and used
in the U.S. in the production of mobile homes and recreational
vehicles to be sold only in Canada may be excepted from
individual country of origin marking pursuant to 19 CFR
134.32(h), provided Customs officials at the port of entry are
satisfied that the articles will be used only in the manner
described above and will not be resold. Statements from the
ultimate purchasers, or other evidence satisfactory to Customs
officials at the port of entry, that the imported unmarked
electrical boxes and covers are to be used only in the
manufacture of vehicles for sale in Canada should be submitted.
Sincerely,
Marvin M. Amernick, Chief
Value, Special Programs and
Admissibility Branch
cc: District Director
Champlain, NY