MAR-2-05 CO:R:C:V 734136 AT
Mr. Raymond F. Martin
Spalding Sports Worldwide
425 Meadow Street
P.O.Box 901
Chicopee, MA 01021-0901
RE: Country of origin marking requirements of imported golf
club heads to be used in the manufacture of golf clubs.
Substantial transformation; ultimate purchaser; 19 U.S.C.
1304; 19 CFR 134.1(d); 19 CFR 134.35; 19 CFR 134.36(b); ORR
824-70; HQ 724901; HQ 733185; HQ 656214
Dear Mr. Martin:
This is in reply to your letter dated April 17, 1991, in
which you request a ruling on the country of origin marking
requirements of golf club heads that you intend to import to be
used in the manufacturing of finished golf clubs.
FACTS:
You intend to import golf club heads for manufacturing of
finished golf clubs. After receiving these golf club heads you
then assemble them with shafts and grips of U.S. origin, polish
and buff them up, to become a finished golf club. You state that
you do not ship these heads to anyone else and that they are used
only in your manufacturing process. Further, you state that when
a club head comes into the U.S. it is worth anywhere from $2.50
to $6.50 each. However, when the manufacturing process is
complete and it becomes a finished golf club with the added grip,
shaft, and labor it's worth $54 to $84 per golf club.
ISSUE:
What are the country of origin marking requirements of
imported golf club heads to be combined with a shaft and grip of
U.S. origin to form a completed golf club?
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 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 Court of
International Trade stated in Koru North America v. United
States, 701 F. Supp. 229 (1988): "In ascertaining what
constitutes the country of origin under the marking statute, a
court must look at the sense in which the term used in the
statute, giving reference to the purpose of the particular
legislation involved." The purpose of the marking statute is
outlined in United States v. Friedlaender & Co., 27 CCPA 297
(1940) at 302: "Congress intended 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."
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. Section 134.1(d), Customs Regulations (19 CFR
134.1(d)), defines the ultimate purchaser as "generally the last
person in the U.S. who will receive the article in the form in
which it was imported. If an imported article will be used in
manufacture, the manufacturer may be the ultimate purchaser if he
subjects the imported article to a process which results in a
substantial transformation of the article." Under the provisions
of 19 CFR 134.35 and 19 CFR 134.32(d), if the manufacturer is the
ultimate purchaser, the imported article is excepted from
individual marking provided the containers in which the article
is imported are marked and such containers will reach the
manufacturer intact.
A substantial transformation occurs when articles lose their
identity and become new articles having a new name, character or
use. United States v. Gibson-Thomsen Co., 27 CCPA 267 (1940);
National Juice Products Association v. United States, 10 CIT 48,
628 F.Supp. 978 (CIT 1986); Koru North America v. United States,
supra.
Customs ruled in ORR 824-70 (August 24, 1970), that a
manufacturer who purchased imported golf club heads, either
finished or unfinished, and assembled them with shafts and grips
of U.S. origin into finished golf club heads, was the ultimate
purchaser of the imported golf club heads. The ruling directed
that if the Regional Commissioner of Customs was satisfied that
the imported golf club heads were to be used by an original
equipment manufacturer, then the golf club heads were excepted
from individual marking. In HQ 728213 (July 3, 1985), Customs
reiterated this position. In HQ 724901 (April 9, 1984), Customs
advised that the ultimate purchaser of imported golf club grips
to be used in the manufacture of golf clubs was the golf club
manufacturer. Customs stated that golf club grips which are
imported by golf club manufacturers in the U.S. are substantially
transformed into new and different articles of commerce, i.e.,
golf clubs.
In HQ 733185 (April 11, 1990) Customs reiterated the
position that golf club grips imported by golf club manufacturers
or intended to be sold to golf club manufacturers would be
excepted from individual marking. However, Customs also found
that imported golf club grips that were to be used in the repair
or replacement of grips that were to be used in the repair or
purchased or received by the consumer must be individually
marked. Customs reasoned that the mere fitting of a replacement
grip onto a golf club shaft is a simple assembly not constituting
a substantial transformation.
As in ORR 824-70, in this case, the golf club heads are
imported by you, the manufacturer of the golf clubs, so that they
can be assembled with golf club grips and shafts of U.S. origin
forming a new and different article of commerce, i.e., a golf
club. The addition of major U.S. components in the U.S. to form
a completed golf club constitutes a substantial transformation of
the imported head. Therefore, you are the ultimate purchaser of
the golf club heads and pursuant to 19 CFR 134.35, only the
outermost container of the imported heads must be marked to
indicate the country of origin of the articles, provided the
district director at the port of entry is satisfied that the
imported golf club heads will only be used by you in your
manufacturing processing of finished golf clubs.
With regard to the subject imported golf club heads, it
should be noted that 19 CFR 134.46 provides that in any case in
which the words "United States," or "American," the letters
"U.S.A.," any variation of such words or letters, or the name of
any city or locality in the U.S. appear 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
in a comparable size the name of the country of origin preceded
by "Made In," or "Product of," or other words of similar meaning.
In addition, as provided in 19 CFR 134.36(b), an exception from
marking shall not apply to any article bearing any words
described in 19 CFR 134.46 which imply that an article was made
or produced in a country other than the actual country of origin.
In this regard, Customs has determined that an imported golf club
head bearing the U.S. address of the importer is not excepted
from individual country of origin marking. Accordingly, the golf
club heads that you import are excepted from individual marking
only if they bear no U.S. reference. If they do, the
requirements of 19 CFR 134.46 would apply.
HOLDING:
Imported golf club heads which are assembled with grips and
shafts of U.S. origin by you, the original manufacturer of golf
clubs are excepted from individual country of origin marking and
only the containers of such heads must be marked, pursuant to 19
CFR 134.35 and 19 CFR 134.32(d), provided that (1) the heads do
not bear the words "United States," or "American," the letters
"U.S.A.," any variation of such words or letters, or the name of
any city or locality in the U.S.; and (2) Customs officials at
the port of entry are satisfied that the articles will reach you,
the original manufacturer, in their original, unopened
containers.
Sincerely,
John Durant, Director
Commercial Rulings Division