MAR-2 RR:NC:MA:109 817080
Mr. Ronald E. Edelstein
P.O. Box 655474
Dallas, Texas 75265
RE: COUNTRY OF ORIGIN MARKING OF IMPORTED SEMICONDUCTOR DEVICES FROM THE PHILIPPINES
Dear Mr. Edelstein:
This is in response to your letter dated October 27, 1995 requesting a ruling on whether imported semiconductor devices are required to be individually marked with the country of origin if it is later to be processed in the U.S. by a U.S. manufacturer which in the example provided is your company, Texas Instruments.
A sample semiconductor and 3 point' examples of marking of the word Philippines' was submitted with your letter for review. The intent of your letter was to show that by virtue of the small size of the imported semiconductor devices and length of the word Philippines' it would be unacceptable, if not impossible, to mark the semiconductors. In your letter you request an exception of marking of individual semiconductor devices under provisions which provide that the imported semiconductor devices will be used in production by your company, Texas Instruments. You also note that those semiconductor devices imported by Texas Instrument for resale are sometimes sold in mass quantities in the packaging in which they are imported. Your letter states that Texas Instruments will also be responsible for country of origin marking of the immediate container for devices which are repackaged in the United States, prior to sale, if they are not sold in the imported marked packaging.
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. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See, 19 CFR 134.35.
In this case, the imported semiconductor devices are substantially transformed as a result of the U.S. processing, and therefore the U.S. manufacturer is the ultimate purchaser of the imported semiconductor devices and under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin "Philippines".
In the other issue raised in your letter, you state that the imported semiconductor devices are to be sold to another manufacturer or distributor in their imported form in lesser quantities than those packaged at importation. These semiconductor devices will be repackaged in the U.S. The manufacturer or distributor is the ultimate purchaser.
An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. However, since the semiconductor devices are not imported in their marked retail container (as sold to the manufacturer/ distributor), whether the subject articles are excepted from individual marking under 19 CFR 134.32(d) is for the district director to decide. In this regard section 134.34, Customs Regulations (19 CFR 134.34), provides that an exception may be authorized in the discretion of the district director under 19 CFR 134.32(d) for imported articles which are to be repacked after release from Customs custody under the following conditions: (1) The containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the U.S.; (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.
In this case, assuming that the district director is satisfied that the imported semiconductor devices will be repacked in the manner described above, and that the other conditions set forth in 19 CFR 134.34 are met, the district director may authorize an exception under 19 CFR 134.32(d), in which case marking of the imported semiconductor devices will not be required.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Phil Carabetta at 212-466-5673.
Sincerely,
Roger J. Silvestri
Director
National Commodity
Specialist Division