, in the
Customs Bulletin, volume 30, Number 29/30.
EFFECTIVE DATE: This decision is effective for merchandise
entered or withdrawn for warehouse for consumption (on or after
30 days after the date of publication in the Customs Bulletin). FOR FURTHER INFORMATION CONTACT: Anthony Tonucci, Special
Classification and Marking Branch, (202-482-7073).
SUPPLEMENTAL INFORMATION:
Background
On July 24, 1996, Customs published a notice in the Customs
Bulletin, Volume 30, Number 29/30, proposing to modify a New York
ruling letter (NY) 810816, issued June 1, 1995, which held that
pursuant to section 102.14, interim Regulations (19 CFR 102.14),
the country of origin of imported golf club sets assembled in
Canada from U.S. origin stainless steel heads and rubber grips
and Japanese origin stainless steel shafts is Canada, and thus
marking the outside carton with the words "Assembled in Canada"
was an acceptable country of origin marking for the imported golf
club sets. No comments were received in response to this notice.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C.
1625(c)(1), as amended by section 623 of Title VI (Customs
Modernization) of the North American Free Trade Agreement
("NAFTA") Implementation Act (Pub. L. 103-182, 107 Stat. 2057
(1993), this notice advises interested parties that Customs is
modifying NY 810816 to reflect that pursuant to section
102.11(d)(2)(i), Customs Regulations (102.11(d)(2)(i)), the
country of origin of the imported golf club sets is "Canada", rather than pursuant to section 102.14, as erroneously held in NY
810816. It remains Customs' position that the imported golf club
sets are of Canadian origin and marking their retail container
"Assembled in Canada" is an acceptable country of origin marking
for the imported golf club sets. NY 810816 is set forth in
"Attachment A". Headquarter's Ruling Letter 559431 modifying NY
810816 is set forth in Attachment B to this document.
Dated:
John Durant, Director
Tariff Classification
Appeals Division
Attachments
HQ 559431
September 3, 1996
Mar-2 RR:TC:SM 559431 AT
Mr. Daniel Murphy
Operations Manager
DiMarco Golf
4500 Dixie Rd., Unit 12 A
Mississauga Canada L4W1V7
RE: Modification of NY 810816 concerning country of origin
marking requirements of imported golf clubs assembled in
Canada from U.S. and Japanese origin components; Article
509; NAFTA Marking Rules; section 102.11 of the interim
regulations
Dear Mr. Murphy:
This letter is to inform you that Customs is reconsidering
your original submission dated May 16, 1996, submitted to the
National Import Specialist, New York Office, requesting a ruling
concerning the country of origin marking requirements for
imported golf clubs which are assembled in Canada from U.S. and
Japanese components.
FACTS:
According to your May 16, 1996 submission, DiMarco Golf
imports golf clubs into the U.S. which are assembled in Canada
from U.S. and Japanese components. You state that all of the
components (stainless steel heads, rubber golf club grips,
ferrules and two sided grip tape) are of U.S. origin, except the
stainless steel shafts which are of Japanese origin. These
components are assembled in Canada into 8 piece golf club sets
consisting of 7 irons (3,4,5,6,7,8, and 9) and a pitching wedge.
You submit that the assembly operation performed in Canada to
make the golf clubs consists of the following steps:
1. Cutting the stainless steel shaft.
2. Applying the ferrule to the shaft.
3. Epoxying the head to the shaft.
4. Applying the grip to the shaft.
5. Packaging the golf club sets ready for shipment.
6. Marking the carton "Assembled in Canada".
You inquired as to whether marking the outside carton in
which the golf club sets were packaged with the words "Assembled
in Canada" would be an acceptable country of origin marking for
the imported golf club sets. In NY 810816 dated June 1, 1995,
our New York office ruled that pursuant to section 102.14,
interim Customs Regulations (19 CFR 102.14), the country of
origin of the imported golf club sets is Canada, and thus marking
the outside carton with the words "Assembled in Canada" was an
acceptable country of origin marking for the imported golf club
sets. We have determined, for the reasons set forth below, that
our New York office erred in their analysis and conclusion that
the country of origin of the imported golf club sets is "Canada"
pursuant to section 102.14 of the interim regulations. Thus,
modification of that ruling is required.
ISSUE:
What are the country of origin marking requirements of the
imported golf club sets which are assembled in Canada with U.S.
components and Japanese-origin stainless steel heads in the
manner described above?
LAW AND ANALYSIS:
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, every
article of foreign origin (or its container) imported into the
U.S. 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 U.S. the English name of the country of origin
of the article. Part 134, Customs Regulations (19 CFR Part 134)
implements the country of origin marking requirements and
exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a "good of a
NAFTA country" are also determined in accordance with Annex 311
of the North American Free Trade Agreement ("NAFTA"), as
implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057)
(December 8, 1993). The rules currently used for determining the
country of origin of a good imported from a NAFTA country
("Marking Rules") are contained in Part 102, interim Customs
Regulations (19 CFR Part 102) [final rule published as T.D. 96-48
in the Federal Register on June 6, 1996, effective on August 5,
1996, 61 FR 28932].
Section 134.1(b) of the Customs Regulations 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 this part; however, for a good of a NAFTA
country, the NAFTA Marking Rules will determine the
country of origin. (Emphasis added).
Section 134.1(j) of the Customs Regulations provides that
the "NAFTA Marking Rules" are the rules promulgated for purposes
of determining whether a good is a good of a NAFTA country.
Section 134.1(g) of the Customs Regulations defines a "good of a
NAFTA country" as an article for which the country of origin is
Canada, Mexico or the United States as determined under the NAFTA
Marking Rules. Section 134.45(a)(2) of the Customs Regulations
provides that a "good of a NAFTA country" may be marked with the
name of the country of origin in English, French or Spanish.
In this case, the golf club sets are assembled in Canada
from U.S. and Japanese origin components. Thus, in order to
determine the appropriate marking requirements for the imported
golf club sets, we must determine under the NAFTA Marking Rules
the country of origin of the golf clubs which are assembled in
Canada in the manner described above.
Section 102.11 of the interim Customs Regulations (19 CFR
102.11), sets forth the required hierarchy for determining
country of origin of goods from NAFTA countries for marking
purposes. Section 102.11(a) of the interim Customs Regulations
states that "[t]he country of origin of a good is the country in
which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or (3) Each foreign material incorporated in that good
undergoes an applicable change in tariff classification
set out in section 102.20 and satisfies any other
applicable requirements of that section, and all other
requirements of these rules are satisfied."
"Foreign Material" is defined in section 102.1(e) of the interim
Customs regulations as "a material whose country of origin as
determined under these rules is not the same country as the
country in which the good is produced."
Since the individual golf clubs (7 irons and a pitching
wedge) which make up the imported golf club sets are assembled in
Canada from U.S. and Japanese components (foreign, as defined in
section 102.1(e) of the interim regulations) the golf clubs are
neither wholly obtained/produced nor produced exclusively from
domestic materials. Therefore, paragraphs (a)(1) and (a)(2) of
section 102.11 cannot be used to determine the country of origin
of the golf club sets. Thus, paragraph (a)(3) of section 102.11
is the applicable rule that next must be applied to determine the
origin of the finished article.
The three components (excluding fasteners) of the assembled
golf clubs, in this case, consists of the U.S. origin stainless
steel shaft and rubber grips, and the Japanese origin stainless
steel heads. The completely assembled golf clubs are classified
under subheading 9506.31, HTSUS. The stainless steel heads and
shafts and the rubber golf grips are classified as parts of golf
clubs under subheading 9506.39, HTSUS. The applicable change in
tariff classification set out in section 102.20(s), Section XX,
Chapters 94 through 96, 9506.31 of the interim regulations
provides:
9506.31 ..... A change to subheading 9506.31 from any other
subheading, except subheading 9506.39.
In this case, since the foreign stainless steel shafts and
heads and the rubber grips are classified under subheading
9506.39, HTSUS, they do not undergo the applicable change in
tariff classification set out in section 102.20(s), and, as a
result, section 102.11(b) of the hierarchial rules must be
applied next to determine the country of origin of the assembled
golf clubs. Section 102.11(b) of the interim Customs Regulations
provides that:
Except for a good that is specifically described in the
Harmonized System as a set, or is classified as a set
pursuant to General Rule of Interpretation 3, where the
country of origin cannot be determined under paragraph
(a), the country of origin of the good:
(1) Is the country or countries of origin of
the single material that imparts the
essential character of the good, or
(2) If the material that imparts the
essential character of the good is
fungible, has been commingled, and
direct physical identification of
the origin of the commingled material is
not practical, the country or countries
of origin may be determined on the basis
of an inventory management method
provided under the Appendix to part 181
of the Customs Regulations.
Although the imported articles are commonly referred to as "golf
club sets" they are not described in the Harmonized System as a
set, or are classified as a set pursuant to General Rule of
Interpretation 3. Thus, section 102.11(c) is not applicable, but
section 102.11(b) must be applied in determining the origin of
the golf clubs.
Applying section 102.11(b)(1), to the facts of this case, we
find that there is no single material that imparts the essential
character to the golf clubs. In our opinion, in this case, all
three components (stainless steel golf club shafts and heads and
the rubber golf club grips) are essential parts of the golf
clubs. Accordingly, since section 102.11(c) is not applicable,
section 102.11(d) of the hierarchial rules must be applied next
to determine the country of origin of the golf clubs.
Section 102.11(d) of the interim Customs regulations
provides that:
(d) Where the country of origin of the good cannot be determined under paragraph (a),(b) or (c) of this
section, the country of origin of the good shall be
determined as follows: (1) The last country in which the good
underwent production, other than by
simple assembly or minor processing, or
(2) If the good is produced by simple
assembly:
(i) The country in which the good is
assembled if the parts that merit
equal consideration as imparting
the essential character of the good
do not have the same country of
origin, or
(ii) The country of origin of the parts
assembled into the good that merit
equal consideration as imparting
the essential character of the good
if all those parts have the same
country of origin.
"Simple assembly" is defined in section 102.1(o) of the interim
Customs Regulations as:
the fitting together of five or fewer parts all of
which are foreign (excluding fasteners such as screws,
bolts, etc.) by bolting, gluing, soldering, sewing or
by other means without more than minor processing.
(Emphasis added).
Based on the facts in this case, the golf clubs are produced
in Canada as a result of "simple assembly" since there are only
three components (heads, shafts and grips) all of which
(excluding fasteners) are foreign and are fitted together by
gluing. On the other hand, since these components have different
countries of origin--the U.S. and Japan--section 102.11(d)(2)(i)
of the interim Customs Regulations, is the applicable rule for
determining the country of origin of the golf clubs. Applying
section 102.11(d)(2)(i) to the facts in this case, we find that
the country of origin of the imported golf club sets is Canada-- the country in which the goods are assembled. Accordingly, the
individual golf clubs or their retail containers in which the
golf club sets are sold to the ultimate purchaser in the U.S.,
must be marked to indicate Canada as the country of origin of the
golf club sets in accordance with the marking requirements of 19
U.S.C. 1304.
We note that while it appears that the golf clubs which are
assembled from U.S. origin stainless steel heads and rubber grips
are eligible for a partial duty exemption under 9802.00.80, HTSUS
and that the country of origin marking requirements of 19 CFR
10.22 apply, please note that in T.D. 96-48 published at 61 F.R.
28932, 28955 (June 6, 1996) Customs has removed 19 CFR 10.22.
Also, section 102.14 has been removed pursuant to T.D. 96-48 as
well. These regulatory amendments will be effective for goods
entered, or withdrawn from warehouse, for consumption on or after
August 5, 1996.
However, pursuant to section 134.43(e), Customs Regulations
(19 CFR 134.43(e)), also amended by T.D. 96-48 and effective on
August 5, 1996, marking the retail containers in which the
imported golf club sets are sold to the ultimate purchaser in the
U.S. with the words, "Assembled in Canada", is an acceptable
country of origin marking since Canada--the country of final
assembly--is the country of origin of the golf club sets.
HOLDING:
Pursuant to 19 CFR 102.11(d)(2)(i) the country of origin of
imported golf club sets which are assembled in Canada from U.S.
origin stainless steel heads and rubber grips and Japanese-origin
stainless steel shafts in the manner described above, is Canada.
New York ruling 810816 is hereby modified in accordance with this
ruling.
Pursuant to 19 CFR 134.43(e), marking the retail containers
in which the golf club sets are sold to the ultimate purchaser in
the U.S. with the words "Assembled in Canada" is an acceptable
country of origin marking for the imported golf club sets under
19 U.S.C. 1304, for those that are entered, or withdrawn from
warehouse, for consumption on or after August 5, 1996.
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 without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division