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