Mar-2-05 CO:R:C:V 734907 AT
Jack Alsup, Esq.
Alsup & Alsup
Del Rio, Texas 78841
RE: Country of origin marking of imported foam bonded vinyl;
assembly of foreign vinyl with domestic foam; substantial
transformation; 19 CFR 134.35
Dear Mr. Alsup:
This is in response to your letter dated November 23, 1992,
on behalf of Douglas & Lomason Co. (D&L), requesting a ruling on
the country of origin of imported foam bonded vinyl. A sample
was submitted with your letter. We regret the delay in
responding.
FACTS:
You state that D&L will import rolls of vinyl made in Canada
measuring approximately 100 yds. X 54" into the U.S. In the
U.S., the vinyl will have foam, approximately 1/2" thick, bonded
to the entire backside of each roll producing the finished
product, foam bonded vinyl. The finished foam bonded vinyl will
then be exported to Mexico for use in the manufacture of
automobile seat covers. The cost of the imported vinyl is $6.00
per linear yard and the added cost, material and labor used in
the U.S. to produce the foam bonded vinyl is $2.15 per linear
yard.
You claim that occasionally, a roll of foam bonded vinyl
will be rejected in Mexico and will need to be returned to the
U.S. for replacement or credit from the vendor. Based on this,
you have requested a ruling as to the correct country of origin
of the foam bonded vinyl that is to be returned from Mexico.
ISSUE:
What is the country of origin of the foam bonded vinyl
imported from Mexico which is manufactured in the U.S. by bonding
Canadian manufactured vinyl with domestic foam.
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, C.A.D. 104 (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 134.1(b), Customs Regulations (19 CFR
134.1(b)) defines "country of origin" as 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
transformation in order to render such other country the "country
of origin" within the meaning of Part 134. A substantial
transformation occurs when an article loses its identity and
becomes a new article 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
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).
The country of origin of the foam bonded vinyl manufactured
in the U.S. by bonding Canadian manufactured vinyl with domestic
foam rests upon whether the Canadian vinyl is substantially
transformed in the U.S. as a result of the bonding operation.
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 Linen
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, 89-110, 89-129, 90-51. Although the foam bonded
vinyl consists of textile materials, the rules for determining
the country of origin for textile products set forth in section
12.130 are not applicable because the foam bonded material is
classified outside of section XI, HTSUS and it is not subject to
quota.
Customs has held that operations, such as cutting to length,
dyeing and gluing are merely finishing and assembly operations
which do not result in a substantial transformation of the
imported article. In HQ 728269 (July 29, 1985), Customs held
that operations performed on greeting cards, such as pressing
out, folding and gluing, were minor and did not constitute a
substantial transformation of the imported card.
Similarly, in this case, we find that the bonding operation
of gluing domestic foam to the imported vinyl in the U.S. does
not constitute a substantial transformation of the Canadian
vinyl. The operation is very simple and does not require a great
deal of skill or time. The bonding of foam to vinyl only
involves gluing the foam to the vinyl by means of an adhesive
material. The formation of the finished foam bonded vinyl is
made by this simple bonding operation. Furthermore, the vinyl
does not change in name, character or use as a result of the
bonding operation because the vinyl still has the appearance and
texture of vinyl after being bonded with the foam. Although the
foam bonded material can now be used in the manufacture of
automobile seats after the bonding process, it is the vinyl's
outward appearance not the foam's which is desired by the Mexican
manufacturer. Accordingly, the country of origin of the foam
bonded vinyl is Canada, the country of manufacture of the vinyl.
HOLDING:
The country of origin of foam bonded vinyl processed in the
manner described above is Canada.
Sincerely,
John Durant, Director
Commercial Rulings Division