OT:RR:CTF:VS H304093 CMR
Mr. James K. Kearney
Womble Bond Dickinson (US) LLP
8065 Leesburg Pike, 4th Floor
Tysons Corner, VA 22182-2738
RE: Reconsideration of New York Ruling Letter (NY) N303559; Origin of string light sets
Dear Mr. Kearney:
It has come to our attention that an error was made in New York Ruling Letter (NY) N303559, dated April 19, 2019, which was issued to you in response to your request of behalf of your client, Everstar Merchandise Co., Ltd./Tomson Merchandise Co., Ltd. We are revoking NY N303559 effective the date of this letter.
FACTS:
The merchandise at issue consists of string light sets featuring miniature incandescent bulbs. In NY N303559, it states that “each item is comprised of the following components: a plug, a cord connector, fuses, electric wires, lead contacts, light bulbs, a color box, lamp holders/lamp husks and a UL label. . . . all of the components are purchased in China (made in China) except for the UL label which is from the United States, and the electric wires and packing materials (carton boxes) are from the Philippines.”
The assembly/manufacturing steps in the Philippines are set forth in NY N303559 as follows:
Plug assembly with common wire – assemble the metal and plastic components to make the plug and connect the plug to common wire.
End-connector assembly with common wire – Assemble the plastic and metal parts to make the end-connector and connect it to the common wire.
Common wire cutting and terminal mounting – Cut the wire spool into wire in specific length using the wire cutting machine and mount the metal terminals to the cut wires.
Bulb and lamp holder assembling – Insert the bulbs into the lamp holders using the lamp assembly machine to make the lamps.
Light string connecting – Assemble the lamps with the lamp husks, terminals and wires in the light assembly machine to form the light string.
Light String assembling and twisting – Connect the light string to the common wire, plug and end connector to make the finished light string.
Testing, labeling, packing and inspection.
ISSUE:
What is the country of origin of the miniature incandescent bulb string lights assembled in the Philippines of components made in China.
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 an 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 markings on the imported goods the country of which the good is the product. "The evident purpose is to mark the goods so 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 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 “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 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 which differs from the original material subjected to the process. United States v. Gibson Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).
In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative.
In Headquarters Ruling Letter (HQ) 557796, dated June 3, 1994, this office considered the country of origin of Christmas tree light sets imported from Macau. As a part of the production of the light sets in Macau, the bulbs were formed from three-inch glass tubes, and the lamp bases and lamp supports (holders) were formed by injection molding. The components formed in Macau, along with the rest of the components (sourced from other countries) necessary to make the light sets (bulbs, bases, supports, long wire, short lengths of wire with contacts attached, unassembled plugs, prongs for the plugs, and control boxes were shipped to China for assembly.
In HQ 557796, we found that the assembly of the various components into the final article, i.e., light sets, did not substantially transform the various components, and thus, they remained “products of” the countries from which they originated. The assembly of the components in China to produce the finished light sets “did not create a new and different article of commerce with a distinct character and use that was not inherent in the components imported into China.” See HQ 557796.
Further, NY N299944, dated August 24, 2018, and NY N300781, dated September 28, 2018, each dealt with the country of origin determination of light sets. In NY N300781, similar to the facts in NY N303559, all of the components were purchased in China, with the exception of the UL label (United States) and the packing material, i.e., carton box (Cambodia). The components of the light sets were assembled in Cambodia. CBP held in NY N300781 that the assembly operations in Cambodia did not substantially transform the light components, and that the country of origin of the light sets was China. See NY N299944 for a similar fact pattern and holding.
In this case, as in HQ 557796, NY N300781, NY N299944, and, Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the components of the string light sets do not lose their individual identities as a result of the assembly process in the Philippines. The components of the string light sets have a pre-determined end-use as parts and components of the light sets when imported into the Philippines and do not undergo a change in use due to the assembly process in Philippines.
HOLDING:
The country of origin of the string light sets featuring miniature incandescent bulbs is China.
NY N303559, dated April 19, 2019, is hereby revoked. This revocation is not subject to the notice and comment provisions of 19 U.S.C. § 1625(c) because NY N303559 has been in effect for less than 60 days.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy of this ruling, it should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division