MAR-2-05 CO:R:C:V 734382 RSD
Mr. Walter T. Chung
General Manager
PJ Company
2410 S. Sequoia Drive
Compton, California 90220
RE: Country of origin marking of imported wheels used in making
industrial casters, combining, 19 CFR 134.35
Dear Mr. Chung:
This is in response to your letter dated September 21, 1991,
forwarded to Customs headquarters by the National Import
Specialist, New York Seaport, and received by our office on
October 17, 1991, concerning the country of origin marking
requirements for imported plastic wheels used in making
industrial casters. We have received a sample of a wheel and the
finished caster for our consideration.
FACTS:
PJ Company imports plastic wheels from Taiwan and combines
them with various other articles to make industrial casters. The
sample wheel measures about 6 inches in diameter. PJ company
imports yokes for the casters from Korea. All other components
of the casters such as the bearing, grease, plastic components
(bushing and retainer washers), and zerk bolts are purchased from
domestic suppliers. These items are assembled together with the
wheels by PJ Company to make the finished casters. The cost of
the imported wheel is approximately 20 percent of the finished
caster. The casters are sold to companies for use as parts of
material handling equipment such as hand trucks, dollies, wagons,
and carts.
ISSUE:
Are the imported wheels substantially transformed when they
are assembled with other parts to make casters?
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.
Congressional intent in enacting 19 U.S.C. 1304 was 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." United States v.
Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. Section 134.35, Customs Regulations (19 CFR
134.35), provides that an article used in the U.S. in manufacture
which results in an article having a name, character, or use
differing from that of the imported article will be within the
principle of the decision of U.S. v. Gibson-Thomsen Co. Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940). Under this principle, the
manufacturer or processor in the U.S. who substantially
transforms the imported article into an article with a new name,
character, or use will be considered the "ultimate purchaser" of
the imported article within the contemplation of section 304(a),
Tariff Act of 1930, as amended (19 U.S.C. 1304(a)), and the
article shall be excepted from marking. The outermost containers
of the imported articles shall be marked in accord with this
part.
In HQ 731432 (June 6, 1988), Customs set forth some factors
to be considered in determining whether imported goods combined
in the U.S. with domestic products were substantially transformed
for country of origin marking purposes. The following six
factors were considered:
1) whether the article is completely finished;
2) the extent of the manufacturing process of combining the
imported article with the domestic article as compared with the
manufacturing of the imported article;
3) whether the article is permanently attached to its
counterparts
4) the overall importance of the article to the finished
product;
5) whether the article is functionally necessary to the
operation of the finished article or whether it is an accessory
which retains its independent function; and
6) whether the article remains visible after the combining.
These factors are not exclusive and there may be other
factors relevant to a particular case and no one factor is
determinative. See, HQ 728801 (February 26, 1986).
Applying these factors to this case, we note that the wheels
are completely finished when they are imported. Although no
specific information was presented regarding the manufacturing
process involved in assembling the wheel onto the casters, it
does not appear that the process is exceptionally complex or
requires a great deal of skill. The wheel is permanently
attached to the casters. The wheel is essential to the function
of the caster. The wheel remains visible after the combining.
Assessing the factors noted above, we find that the wheel
does not lose its separate identity when it is assembled with the
other parts to form a finished caster. The wheel is probably
the most significant component of a completed caster, which in
our opinion provides its essential character. The wheel is the
dominant component of the casters, which contributes the most to
their function of permitting non-mechanical carts to roll. The
buyers of casters are likely to be concerned about the wheels
they would be buying. Assembly of the caster in no way changes
the characteristics of the wheel, and the wheel is clearly
recognizable both before and after the assembly. Although the
wheel only accounts for about 20 percent of the value of the
finished caster, this fact is not determinative. See HQ 734246,
October 21, 1991. In addition, such cost figures may not be
particularly helpful because the costs of producing goods in
Taiwan are usually going to be significantly lower than costs of
producing similar goods in the U.S. Accordingly, the wheel is
not substantially transformed when it is combined with the other
parts to form the finished caster. The purchaser of the caster
is the ultimate purchaser of the wheels. Therefore, the wheels
must individually marked to indicate their country of origin.
Because the wheels are combined with other articles before
delivery to the ultimate purchaser, the wheel should be marked in
a manner which clearly shows that the origin indicated is that of
the wheel alone (e.g. "Wheel Made in Taiwan"). See 19 CFR
134.14.
HOLDING:
The wheels are not substantially transformed when they are
assembled with the other parts to makes casters. The buyers of
the casters are the ultimate purchasers of the wheels. The
wheels must be individually marked to indicate their country of
origin in accordance with the requirements of 19 CFR 134.14.
Sincerely,
John Durant, Director
Commercial Rulings Division