CLA-2 OT:RR:CTF:TCM H086295 DSR
Susan Byrne
Tiffany & Co.
15 Sylvan Way
Parsippany, NJ 07054
RE: Country of origin marking requirements for certain crystal articles
Dear Ms. Byrne:
This letter pertains to your correspondence of October 29, 2009, on behalf of your client Tiffany & Co. (Tiffany), in which you requested a binding ruling on the country of origin marking requirements for four types of crystal articles produced in Slovenia and Germany.
FACTS:
Tiffany intends to import articles of leaded crystal from Germany. You have submitted photographs of the articles that are described as the (1) Wave Cut Vase; (2) Wave Cut Cylinder Vase; (3) Wave Cut Bowl; and (4) Wave Cut Centerpiece. The “blanks” of the articles are blown to shape in Slovenia. The blanks are then shipped to Germany where they are cut to design, ground and finished, resulting in the products pictured in your submission. The production costs of the articles rise as a result of the processes that occur in Germany, to wit: (1) Wave Cut Vase – from $78.46 to $ 216.07; (2) Wave Cut Cylinder Vase – from $62.47 to $168.95; (3) Wave Cut Bowl – from $78.43 to $203.59; and (4) Wave Cut Centerpiece from $81.61 to $216.05. The finished products are then shipped from Germany to the United States for retail sale.
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 its 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940). Part 134, U.S. Customs and Border Protection (CBP) Regulations (19 C.F.R. §134) implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. Section 134.1(b), CBP Regulations (19 C.F.R. §134.1(b)), defines “country of origin” as:
[T]he 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 transformation in order to render such other country the “country of origin” within the meaning of [the marking regulations]…
A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., C.C.P.A. 267, 270 (C.A.D. 98) (1940)) The question of whether a substantial transformation occurs for marking purposes is a question of fact; to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. United States, 3 C.I.T. 220, 542 F.Supp. 1026 (1982), aff’d, 1 Fed.Cir. 21, 702 F.2d 1022 (1983)).
Applying these principles to the present case, we first note that when a blank is produced in one country, and merely cut or engraved for decorative purposes in a second country, then the first country is typically considered the country of origin, because the blank usually has the same name, character or use the completed article, and the decorative nature of the resultant changes that occur in the second country are not extensive enough to be deemed substantial transformations. See HQ H004649 (March 20, 2007); HQ 556060 (August 27, 1991); HQ 733036 (April 9, 1990); HQ 731963 (July 26, 1989); HQ 047663 (March 21, 1977); HQ 043004 (January 7, 1976); HQ 045106 (April 2, 1976); see also National Hand Tool, supra.
However, in those instances where the processes that occur in a second (or third, fourth, etc.) country are of an extensive nature, a different result occurs. For instance, in HQ 734387 (June 8, 1992), CBP considered the country of origin of a lead crystal stemware (made of a bowl, stem and foot) that was given its shape in continental Europe and sent to Ireland for further processing. The importer considered the crystal stemware shaped in continental Europe a blank even though the final stemware dimensions of the blank were fixed. In Ireland, the stemware underwent an extensive labor-intensive and exacting process, entailing considerable expertise in the art of hand-cutting crystal to provide a decorative outward appearance. The process in Ireland included ink marking the stemware with the appropriate grid pattern, having a team of glass cutters variously cut the pattern on the blank, performing various finishing operations – washing and acid polishing and dipping the cut piece, which produced a glossy finish and finally inspecting and packaging the finished consumer product (hand cut lead crystal stemware) for export to the United States. The finished stemware value was substantially higher than the blank. CBP held that the imported glassware blanks were substantially transformed functionally into formal, elegant stemware by the extensive hand cutting operation performed in Ireland. See also HQ 734653 (June 16, 1992) and HQ 734653 (October 22, 1992); compare HQ 733036 (April 9, 1990) (no substantial transformation where hand cuts on crystal were not labor intensive, time-consuming or intricate).
Here, although the basic forms of the articles existed before being shipped to Germany, the articles did not exhibit the unique designs and elegant visual appeal that makes them especially attractive to consumers until after undergoing extensive cutting and shaping in Germany. The “blank” articles are completely uncut and unadorned at the time of their importation into Germany, and the processes in Germany radically alter the appearance of the articles. In addition, the processes that occur in Germany add substantial value to the finished articles. See National Juice Products Association v. United States, 10 CIT 48, 628 F. Supp. 978 (1986) (increased values of between one and eight percent were not found to be significant); compare Ferrostaal Metals Corp. v. United States, 11 C.I.T. 470 (1987) (added value between 57% and 80% deemed significant).
Thus, we find that the articles emerged from the processes of hand cutting, grinding, and finishing as ornate and highly crafted articles very distinct in character from the original articles. The articles have lost their identities as mere crystal wares, and have become elegantly distinctive items of significantly higher value that have been purchased for their functional appearance, in addition to their utilitarian uses. Therefore, under the “name, character, or use” test described above, we find that the process described above effects a “substantial transformation” on the original crystal blanks that is sufficient to render Germany as the country of origin of the crystal articles imported into the U.S.
HOLDING:
Based on the information provided, the Wave Cut Vase, Wave Cut Cylinder Vase, Wave Cut Bowl and Wave Cut Centerpiece articles blown to shape in Slovenia are substantially transformed when they are cut, ground and finished in Germany. Accordingly, the articles must be individually marked to reflect Germany as their country of origin, in accordance with 19 CFR § 134.11. This ruling is limited to the merchandise and facts provided in the ruling request of October 29, 2009.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed with a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch