MAR-2-05 R:C:S 558957 MLR
Mr. Claude Pulicicchio
Computer Power, Inc.
124 West Main Street
High Bridge, New Jersey 08829
RE: Country of origin marking of innovative energy saving
device; retrofit kit; assembly; packaging; substantial
transformation; Guam; Saipan
Dear Mr. Pulicicchio:
This is in reference to your letters dated December 19
and 22, 1994, requesting a ruling regarding the country of origin
marking for a retrofit kit imported from Guam or Saipan, composed
of foreign and U.S. components. Drawings and brochures were
submitted with your request.
FACTS:
Computer Power plans to import a retrofit kit from Guam or
Saipan, which is used to upgrade exit signs to create innovative
energy saving devices. These devices use light-emitting diodes
(LEDs). The kit is made from the following U.S. and foreign
parts:
Description Source
Retro printed circuit board assemblies Mostly foreign
Two Sets of Plastic Housings « U.S.
« Foreign
Two 8 inch lengths of double-sided tape U.S.
Polyester plastic diffuser U.S.
Printed User's Manual U.S.
Four 3 x 6 inch aluminum foil reflective tape U.S.
Two Plastic cable mounts Initially U.S.
Two Plastic bags (5 and 12 inch) Initially U.S.
Decorative box U.S.
Two Cable/socket adapters Foreign
Two Labels U.S.
In a telephone conversation with a member of my staff, you
indicated that the printed circuit board assembly is inserted
into the plastic housing and the sides of the housing are glued
in place. The double sided tape and labels are then taped to the
housings. The plastic housing and printed circuit board assembly
is referred to as a LED stick. Two LED sticks, one set of cable
adapters, two cable mounts, one diffuser, and four sheets of
reflective tape with the instruction manual are then placed in a
box for shipment to the U.S. You propose to mark these articles
"Made in the U.S.A."
ISSUE:
Whether the retrofit kit is a product of Guam (or Saipan)
for country of origin marking purposes.
LAW AND ANALYSIS:
As we indicated to you in a telephone conversation, the
determination as to whether an article may be marked "Made in the
U.S.A.", is under the jurisdiction of the Federal Trade
Commission, Division of Enforcement, located at 6th &
Pennsylvania Avenue, N.W., Washington, D.C. 20508, and we
suggested that you contact them for their approval.
However, for purposes of the U.S. Customs Service, 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 imported into the U.S. 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 the ultimate purchaser in the U.S. 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.
Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and the exceptions of
19 U.S.C. 1304. Section 134.1(b), Customs Regulations {19 CFR
134.1(b)}, defines "country of origin" as the country of
manufacture, production or growth of any article of foreign
origin entering the U.S. Customs has previously ruled that
products of Guam are excepted from country of origin marking
requirements under 19 CFR 134.32(1), as products of possessions
of the U.S. However, in order to render a country the "country
of origin" within the meaning of the marking laws and
regulations, further work or material added to an article in
another country must effect a substantial transformation
In determining whether the combining of parts or materials
constitutes a substantial transformation, the issue is the extent
of operations performed and whether the parts lose their identity
and become an integral part of the new article. Belcrest Linens
v. United States, 573 F. Supp. 1149 (CIT 1983), aff'd, 741 F.2d
1368 (Fed. Cir. 1984). Assembly operations which are minimal or
simple, as opposed to complex or meaningful, will generally not
result in a substantial transformation. See C.S.D. 85-25.
However, the issue of whether a substantial transformation occurs
is determined on a case-by-case basis.
First, in this case, we must determine whether the insertion
of the printed circuit board assembly into the plastic housing,
and gluing the sides of the housing in place to create a LED
stick constitutes a substantial transformation. In Headquarters
Ruling Letter (HRL) 555660 dated September 15, 1991, Customs held
that the production of an LED assembly by inserting an LED into a
plastic housing, attaching LED leads to conducting wires, inserting
the wires into an insulating tube, and affixing pins and terminals
to the lead wires did not result in a substantial transformation.
Accordingly, we find that the insertion of the printed circuit
board assembly into the plastic housing also does not result in a
substantial transformation.
Secondly, we must determine whether the packaging of the LED
sticks with the cable adapters, cable mounts, diffuser, and
sheets of reflective tape to create the retrofit kit constitutes
a substantial transformation. In HRL 732461 dated December 12,
1989, Customs considered an alarm system, consisting of a
siren/speaker alarm made in Mexico, two transmitter/receivers
made in Korea, and a LED arming light made in Taiwan, which were
packaged together in Mexico. It was found that packaging the
components together did not confer Mexican origin. In addition,
the importer claimed that since each component of the system was
marked with its country of origin, the container was not required
to be marked. Customs held that since the ultimate purchaser was
not likely to examine the components of the alarm system prior to
purchase, the container which would reach the ultimate purchaser
had to indicate the origins of the components of the alarm system
(i.e., the siren/speaker, transmitter/receivers, and LED arming
light), and a phrase on the container, such as "Alarm system
components from ____, _____, and _____" was sufficient.
In HRL 734560 dated July 20, 1992, telephone sets were
considered, which consisted of a base unit made in Canada or
Malaysia, a handset made in Canada or China, a handset cord made
in Canada or Mexico, a cord to connect the telephone to the jack
made in Mexico, and a transformer made in Taiwan. These items
were assembled and tested in either Canada or Malaysia. It was
determined that the assembly of these components into a telephone
was extremely simple, and that they were not substantially
transformed. Therefore, the carton in which the ultimate
purchaser received the telephone could be marked: "telephone base
made in (name of country); handset made in (name of country);
transformer made in (name of country); line cord made in (name of
country)."
Similarly, in this case, we find that packaging the LED
sticks with the cable adapters, cable mounts, diffuser, and
sheets of reflective tape to create the retrofit kit does not
result in a substantial transformation, and as in HRL 732461, it
is not likely that the ultimate purchaser of the retrofit kit will
remove the components to examine each of their country of origin.
Accordingly, upon importation into the U.S., each component of
foreign origin (i.e., not of U.S.-origin) must be individually
marked to indicate its country of origin. Furthermore, although
each foreign component is marked with its country of origin, since
the ultimate purchaser is not likely to open the container prior to
purchasing the kit, the container in which the ultimate purchaser
will receive the retrofit kit should be marked with the country of
origin of each component. A phrase such as "Contents from (country
of origin of imported components); See Marking on Each Article
Inside" would be appropriate. See HRL 732679 dated May 4, 1990.
On the other hand, each foreign component may be excepted from
individual marking pursuant to 19 CFR 134.32(d), if marking the
container will reasonably indicate the origin of the components.
Therefore, each foreign component need not be individually marked
if the container in which the ultimate purchaser receives the
retrofit kit lists each foreign component and its country of
origin, such as "Printed Circuit Board Assembly Made in _____,
Cable/socket adapters Made in ______, and Housing Made in ______."
See also 19 CFR 134.24(d)(2). We suggest that you contact the
Federal Trade Commission if you wish to mark a component "Made in
the U.S.A."
HOLDING:
On the basis of the information submitted, we find that the
components of the retrofit kit are not substantially transformed
by the simple combining and packaging operation performed in
either Guam or Saipan. Accordingly, each individual foreign
component of the retrofit kit is required to be marked with its
country of origin. In addition, the container must be marked to
indicate the countries of origin of the foreign components
contained in the retrofit kit; however, this marking does not
have to specifically list each component with its country of
origin if each component is individually marked with its country
of origin. In the alternative, if each foreign component is
excepted from marking pursuant to 19 CFR 134.32(d), the
container, in which the retrofit kit is sold to the ultimate
purchaser, should list each foreign component with its country of
origin. The approval of the marking "Made in the U.S.A." is
within the jurisdiction of the Federal Trade Commission.
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, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division