CLA-2 CO:R:C:S 557387 RAH

District director
U.S. Customs Service
Lincoln Juarez Bridge, Building #2
P.O. Box 3130
Laredo, Texas 78044-3130

RE: Internal Advice No. 33/93; eligibility of glass face plates for duty-free treatment under the GSP

Dear Sir:

This is in response to your memorandum of April 16, 1993, regarding a request for internal advice from Brenco, Inc. on behalf of Corning Glass Works, concerning the eligibility of certain glass face plates for duty-free treatment under the Generalized System of Preferences (GSP).

FACTS:

Raw rolled glass profiles of Korean-origin are shipped to Mexico to be made into face plates for cathode ray tubes. In Mexico, the glass profile undergoes four different processes. First, the glass is surface ground and edge worked using "diamond grindless" on both sides of the glass profile. Secondly, both sides of the glass profile and edges are ground on a "Hoffman machine." Next, one side of the glass panel is polished using a "Lapmaster machine." Finally, the panel is finished on a "Speedfam machine" to make "Antiglare".

After processing in Mexico, the glass is described as a 14" FTM Glass Face Plate for television tube-antiglare. The panel is then exported to the U.S. where it is used to manufacture cathode ray tubes for television receivers.

The importer contends that the processing in Mexico substantially transforms the Korean glass plates into a product of Mexico.

ISSUE.

Whether the processing of Korean glass plates in Mexico by grinding, polishing and finishing constitutes a substantial transformation of the glass into a product of Mexico for purposes of the GSP.

LAW AND ANALYSIS:

Under the GSP, eligible products which are the growth, product, or manufacture of a designated beneficiary developing country (BDC), may enter the U.S. duty-free if such products are imported directly into the U.S. and the sum of 1) the cost or value of the materials produced in the BDC, plus 2) the direct costs involved in processing the eligible article in the BDC, is equivalent to at least 35 percent of the appraised value of the article upon its entry into the U.S. 19 U.S.C. 2463(b).

Mexico is designated BDCs. See General Note 3(c)(ii)(A), HTSUS. Therefore, the glass plates will receive duty-free treatment if they are considered to be the "product of" Mexico, they are classified under a GSP-eligible provision, the 35 percent GSP value-content minimum is met, and the goods are "imported directly" into the United States.

Merchandise is considered the "product of" a BDC if it either is wholly the growth, product or manufacture of a BDC or has been substantially transformed there into a new or different article of commerce. 19 U.S.C. 2463(b)(2). A substantial transformation occurs "when an article emerges from a manufacturing process with a new name, character, or use which differs from that of the original material subjected to the process." The Torrington Company v. United States, 764 F.2d 1563, 1568 (Fed. Cir. 1985).

Under the facts presented, the importer has not shown that the underlying chemical, physical and mechanical properties or structure of the glass plates imported into Mexico will be changed by the grinding and polishing operations in that country. Although the article does have a somewhat different appearance, it is only a change in its surface. The articles remains a glass face plate. The form, shape and character of the glass plates were determined in Korea and the product was substantially completed when it left that country. We further find that the cosmetic changes are not considered significant in light of the predetermined qualities and specifications of the glass. Accordingly, the glass plates will not be entitled to duty-free treatment under the GSP when imported into the U.S. from Mexico.

Moreover, for marking purposes Korea is the country of origin. However, there is insufficient information to determine if the article is substantially transformed in the U.S. into a product of this country.

HOLDING: Grinding and polishing glass plates does not constitute a substantial transformation of the glass for purposes of the GSP. Therefore, the plates will not qualify for duty-free treatment under the GSP.

Sincerely,

John Durant, Director
Commercial Rulings Division