MAR-2-05 CO:R:C:V 734214 GRV
Ms. Shirley Harvey
Customs Manager
Browning
3005 Arnold Tenbrook Road
Arnold, Missouri 63010-9406
RE: Country of origin marking of fishing rods (without
reels) made in Taiwan and assembled in China. Ultimate
purchaser; 19 CFR 134.1(d); foreign processing
(assembly); substantial transformation; Belcrest
Linens; C.S.D. 80-111; C.S.D. 85-25; T.D. 67-173
Dear Ms. Harvey:
This is in response to your letters of June 12, and October
30 and 31, 1991, requesting a ruling regarding the country of
origin marking of fishing rods (without reels) made in Taiwan and
assembled in China. Photographs showing the various component
parts and the assembled fishing rods were submitted.
FACTS:
Fishing rods (without reels), assembled in China from
component parts manufactured in Taiwan, are imported by your
company. The component parts of the fishing rods consist of a
fishing rod--a composite of approximately 40% graphite and 60%
fiberglass, foregrip, reel seat, butt grip, and line guides,
which can range in number from 5-11, depending on the style
fishing rod. These components parts comprise approximately 85%
of the total value of the finished fishing rods.
In China, the parts are assembled together: the foregrip,
reel seat and butt grip are glued onto the rod, and, the line
guide components are thread wrapped onto the rod and the thread
is epoxy encapsulated. The assembled fishing rods then have
various information, including the country of origin, silk-
screened onto the rods, and are packaged for export to the U.S.
The rods are enclosed in a plastic bag, and six rods are packaged
in an inner carton, with sixty rods packaged in a master carton.
Although most fishing rod sales are in quantities of six or
multiple units of six, individual rods are sold, and the plastic
bag is usually removed by distributors to display the fishing
rod.
You request a ruling as to the country of origin of the
imported products and also what the marking should indicate.
The photographs submitted admit to the assembly of the
fishing, but do not show any legible country of origin marking.
In a telephone conversation with a member of my staff on
October 30, 1991, another representative of your company (Kent
Heitz) stated that there was no desire to indicate more than the
country of origin. Thus, you asked us to disregard other marking
issues, such as "assembled in China," which would raise a marking
issue under 19 CFR 134.46.
ISSUE:
Whether the imported fishing rods must be marked to indicate
their country of origin, as required by 19 U.S.C. 1304.
LAW AND ANALYSIS:
The marking statute, 304 of the Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, 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 its container)
will permit in such a manner as to indicate to the ultimate pur-
chaser 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.
The primary purpose of the country of origin marking statute
is to "mark the goods so that at the time of purchase the ulti-
mate purchaser may, by knowing where the goods were produced, be
able to buy or refuse to buy them, if such marking should influ-
ence his will." United States v. Friedlaender & Co., 27 CCPA
297, 302, C.A.D. 104 (1940).
The "ultimate purchaser" is defined generally as the last
person in the U.S. who will receive the article in the form in
which it was imported. 19 CFR 134.1(d). If an article is to be
sold at retail in its imported form, the purchaser at retail is
the "ultimate purchaser." 19 CFR 134.1(3).
The country of origin for marking purposes is defined at
134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the
country of manufacture, production, or growth of any article of
foreign origin entering the U.S. Further work or material added
to an article in another country must effect a substantial trans-
formation in order to render such other country the "country of
origin" within the meaning of Part 134. A substantial transfor-
mation occurs when articles lose their identity and become new
articles having a new name, character, or use. Koru North
America v. United States, 12 CIT 1120, 701 F.Supp. 229 (1988).
The question of when a substantial transformation occurs for
marking purposes is a question of fact; to be determined on a
case-by-case basis. Uniroyal Inc. v. United States, 3 CIT 220,
542 F.Supp. 1026 (1982), aff'd, 1 Fed.Cir. 21, 702 F.2d 1022
(1983).
In determining whether the combining of parts or materials
constitutes a substantial transformation, the issue is the extent
of operations performed and whether the parts lose their identity
and become an integral part of the new article. Belcrest Linens
v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2
Fed.Cir. 105, 741 F.2d 1368 (1984). Assembly operations which
are minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See,
C.S.D.s 80-111, 85-25, 89-110, 89-118, 89-129 and 90-97.
In T.D. 67-173, 1 Cust.Bull. 366 (1967), we considered
whether the domestic assembly of imported parts to make fishing
rods and reels constituted a substantial transformation and found
that it did not, stating that the assembly of all or substan-
tially all of the components imported did not result in the
manufacture of a new and different article. Accordingly, we
stated that one of the parts, such as the main reel housing,
should be marked to indicate the country of origin, so that the
marking remains legible and conspicuous after the reels were
assembled. See also, C.S.D. 80-111 (foreign fan components not
substantially transformed by domestic, 20-step, assembly-line
operations, as the identity of the foreign components was not
lost or physically altered, no skilled labor or specialized
equipment was required, and the assembly costs were relatively
low).
In this case, we do not find that the assembly in China of
foreign fishing rod components constitutes a substantial trans-
formation of the Taiwanese components. The extent of operations
performed is simple--requiring only three assembly operations
(gluing, tying/binding, and epoxy encapsulation), which add only
15% to the total value of the finished fishing rods--and the
component parts do not lose their identity--no change to the
physical dimensions of the components occurs. Accordingly, the
imported fishing rods must be legibly and conspicuously marked to
indicate their country of origin: "Taiwan." You have stated
that the country of origin is silk-screened onto the rods, which
accords with designation in T.D. 67-173 that one of the main
parts of the fishing rods be marked. However, as no sample
marking was submitted, we cannot rule as to whether the print
size you elect to denote the country of origin marking is
sufficient to be considered conspicuous within the meaning of 19
U.S.C. 1304.
HOLDING:
The imported fishing rods must be marked to indicate that
Taiwan is their country of origin, as required by 19 U.S.C. 1304,
as the foreign (China) assembly operation is a minor operation
which does not substantially transform the Taiwanese component
parts. Accordingly, you are advised to check with the Customs
officials at the port you intend to import these fishing rod
components through to ensure that the country of origin marking
method you employ meets the conspicuous marking requirements of
19 U.S.C. 1304 and 19 CFR Part 134.
Sincerely,
John Durant, Director
Commercial Rulings Division