MAR-2-05 CO:R:C:V 730949 LW
Ms. Gail T. Cumins
Sharretts, Paley, Carter,
& Blauvelt, P.C.
Eighty Broad Street
New York, NY 10004
RE: Country of origin marking requirements for low insertion
force jumpers
Dear Ms. Cumins:
This is in response to your letter of December 15, 1987,
requesting a ruling on behalf of your client, W.L. Gore &
Associates (the importer), concerning country of origin marking
requirements for low insertion force jumpers produced in the
U.S., exported to Mexico for cutting, and reimported for testing
and packaging.
FACTS:
Based on your letter, low insertion force jumpers are used
to transmit signals from one printed circuit board to another.
In the U.S. the flat laminated ribbon cables are processed in a
continuous run. The intended length of each cable is established
by a break in the conducting medium, leaving a section marked
only with a line. These continuous rolls of laminated cable are
shipped on plastic reels to a sub-contractor in Mexico.
In Mexico the reels of cable are unwound and the cable is
cut to its intended length at the predetermined point. The
remaining paper insert flap is cut away, exposing the conducting
medium. The cables are then returned to the U.S. for final
testing and packaging before delivery to U.S. customers. These
articles are sold for approximately thirty cents each, with the
processing in Mexico representing three cents of this value.
ISSUE:
What is the proper country of origin for marking purposes
of low insertion force jumpers which are manufactured in the U.S.
in a continuous roll, exported to Mexico to be cut to length as
marked and cut to expose the conducting medium, and returned to
the U.S.?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930 as amended (19
U.S.C.1304), requires that, unless excepted, every article of
foreign origin (or its container) imported into the United States
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
the English name of the country of origin of the article.
The term "foreign origin" is defined in section 134.1(c),
Customs Regulations (19 CFR 134.1(c)), as a "country of origin
other than the United States..." Country of origin as defined in
section 134.1(b), Customs Regulations (19 CFR 134.1(b)), means
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."
By definition, only merchandise which is of "foreign
origin" (i.e., of a country of origin other than the U.S.) is
subject to the requirements of 19 U.S.C. 1304. As provided in
section 134.32(m), Customs Regulations (19 CFR 134.32(m)), U.S.
products exported and returned are specifically excepted from
country of origin marking requirements. Since 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, if a U.S. product is sent abroad for
processing, it remains a product of the U.S. (and not subject to
the requirements of 19 U.S.C. 1304 upon its return) unless prior
to its return it is substantially transformed into an article of
foreign origin.
In order for a substantial transformation to be found, an
article having a new name, character, or use must emerge from the
processing. See United States v. Gibson-Thomsen Co. Inc. 27
C.C.P.A. 267, C.A.D. 98 (1940). In determining whether there has
been a sufficient change in character and use to effect a
substantial transformation, Customs has looked to whether the
processing done increases the value of the article or transforms
the article so that it is no longer the "essence" of the final
product. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F.
Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed. Cir 1983).
As you are aware, Customs has ruled with regard to
other articles exported and returned that if the process
performed in the foreign country is very minor, the articles
will be considered products of the U.S. While these prior
rulings are persuasive, they are not necessarily conclusive
as to low insertion force jumpers.
It is noted that the entire manufacturing process of the
jumpers takes place in the U.S. Upon exportation to Mexico the
articles are dedicated for use as low insertion force jumpers,
and can be identified as such. The minor process of cutting the
cables to length at a predetermined point, and cutting away the
remaining paper insert to expose the conducting medium does not
substantially transform the cables. Further, the value added to
the articles for the minor processing in Mexico is minimal.
HOLDING:
In view of the above considerations it is our opinion that
the processing in Mexico does not affect a substantial
transformation of the cables. Therefore, the cables remain a
product of the U.S. and are not subject to the requirements of 19
U.S.C. 1304.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch