MAR-2-05 CO:R:C:S 735595 DEC
Ms. Lori J. Levy
Sharretts, Paley, Carter & Blauvelt, P.C.
Sixty-seven Broad Street
New York, New York 10004
RE: Country of origin marking for cast bronze figurines;
Painting;
Substantial transformation; HRL 729308; T.D. 89-21; HRL
732964;
19 C.F.R. 134.32(m)
Dear Madam:
This is in response to your letter dated March 9, 1994,
concerning the proposed country of origin markings for United
States purchased cast bronze figurines.
FACTS:
Goebel Incorporated of Pennington, New Jersey plans to
manufacture various cast bronze figurines in the United States.
The figurines will be subject to a priming process before export
to Korea where they will be painted. Upon completion of the
painting process, the figurines will be shipped back to the
United States to be packaged for retail sale.
ISSUE:
Whether the painting of cast bronze figurines in Korea
constitutes a substantial transformation of the imported articles
for purposes of the country of origin requirements of 19 U.S.C.
1304?
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 United States 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 United
States 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, 302 (1940).
Part 134 of the Customs Regulations implements the country
of origin marking requirements and exceptions of 19 U.S.C. 1304.
Section 134.41(b), mandates that the ultimate purchaser in the
United States must be able to find the marking easily and read it
without strain.
Section 134.1(d), Customs Regulations, provides that the
"ultimate purchaser" of an imported article is generally the last
person in the U.S. to receive the article in the form in which it
was imported. In addition, that section provides that a
manufacturer may be the ultimate purchaser of an article if he
subjects it to a process which results in a substantial
transformation of the article.
"Country of origin" is defined in section 134.1(b), Customs
Regulations, as
the country of manufacture, production, or growth of
any article of foreign origin entering the United
States. Further work or material added to an article
in another country must effect a substantial
transforma-
tion in order to render such other country the "country
of origin" within the meaning of this part.
A substantial transformation is said to have occurred when an
article emerges from a manufacturing process with a name,
character, or use which differs from the original material
subjected to the process. Torrington Co. v. United States, 764
F.2d 1563, 1568 (Fed. Cir. 1985), citing Texas Instruments, Inc.
v. United States, 631 F.2d 778, 782 (CCPA 1982), and Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556 (1908).
In this case, the only issue for consideration is whether
the painting of the bronze figurines in Korea effects a
substantial transformation. Counsel has correctly cited
substantial precedent supporting a finding that painting under
similar circumstances does not constitute a substantial
transformation. In Headquarters Ruling Letter 729308, dated
August 12, 1988 (C.S.D. 88-23), Customs concluded that the
painting of earrings in Canada did not result in a substantial
transformation. In another case, Customs concluded that imported
ceramic "bisque ware" was not substantially transformed by a
domestic hand painting operation. Headquarters Ruling Letter
732964, dated August 3, 1990.
In Treasury Decision 89-21, 23 Cust. Bull. 157 (1989), which
Customs issued as a result of Madison Galleries, Ltd., v. United
States, 688 F. Supp., 1544 (CIT 1988), aff'd, 870 F.2d 627 (Fed.
Cir. 1989), Customs stated that the mere decoration of a
porcelain article does not constitute a substantial
transformation. Despite the Court of International Trade's
finding with respect to that particular article, Customs does not
regard Madison Galleries as establishing a rule of law for
country of origin marking purposes. In T.D. 89-21, Customs
stated that
[t]he court's conclusion that the mere decoration of
porcelainware constitutes a substantial transformation
runs counter to a substantial line of administrative
rulings issued by this agency. However, because this
secondary determination was unnecessary to an
adjudication of the essential issue of the case i.e.,
whether the porcelainware was entitled to duty-free
entry under GSP, it is considered dicta . . . The
Customs
Service continues to adhere to its position that the
mere
decoration of porcelainware does not constitute a
substantial transformation.
Based on the above determinations, we are of the opinion
that the painting of the bronze figurines in Korea does not
change the name, character, or use of the figurines in question.
Section 134.32(m), Customs Regulations, provides that products of
the United States that are exported and returned are excepted
from the marking requirements.
HOLDING:
The painting of the United States made bronze figurines in
Korea does not constitute a substantial transformation.
Accordingly, the United States made figurines are excepted from
marking pursuant to 19 C.F.R. 134.32(m).
Sincerely,
John Durant
Director, Commercial Rulings
Division