MAR-2-05 CO:R:V:C 733301 RSD

Mr. Jack Alsup
Alsup & Alsup, Inc.
P.O. Box 1251
Del Rio, Texas 78841

RE: Country of origin marking requirements of kitchen knives and carving forks; 19 CFR 134.43; sharpening not a substantial transformation: wooden block-separate article requires marking

Dear Mr. Alsup:

This is in response to your recent letter requesting a ruling on the country of origin marking requirements of kitchen knives and carving forks.

FACTS:

Your client, Gerber Legendary Blades, imports kitchen knives and forks from Mexico. You have presented different factual situations regarding the importation of these products and ask several questions regarding the proper country of origin marking pertaining to each. Two sample sets of knives were submitted. In addition, two photographs of kitchen knife sets and their packaging were submitted.

ISSUE:

What are the country of origin marking requirements for kitchen knives and forks and the packaging in the situations described below?

LAW AND ANALYSIS:

Section 304 of the 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., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b) defines country of origin as 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 within the meaning of this part. A substantial transformation occurs when article lose their identity and become new articles having a new name, character or use. United States v. Gibson-Thomsen co., 27 C.C.P.A. 267 at 270 (C.A.D 98) (1940), National Juice Products Association v. United States, 12 CIT , 701 F.Supp. 229 (CIT 1988). 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. 19 CFR 134.43 requires that certain specified articles, including knives, be marked legibly and conspicuously by die stamping, cast-in-the mold lettering, etching (acid or electrolytic), engraving, or by means of metal plates which bear the prescribed marking and which are securely attached to the article in a conspicuous place by welding, screws, or rivets.

In the first situation presented, the knives and forks are made in the U.S. and the packaging for retail is done in Mexico. In general, U.S articles sent aboard for processing are not subject to the requirements of 19 U.S.C. 1304 upon their return unless the processing results in a substantial transformation. HQ 730949, July 18, 1988. Since packaging alone is not a substantial transformation, neither the knives nor the forks need to be marked with their country of origin. Assuming the retail packaging is a disposable container, it is not required to be marked to indicate its own country of origin. 19 CFR 134.24. You should be advised that Customs does not have the authority to approve the marking "Made in the U.S.A." Approval of a "Made in the U.S.A." marking is within the jurisdiction of the Federal Trade Commission. The address is Federal Trade Commission, Division of Enforcement, 6th & Pennsylvania Avenue, NW, Washington, D.C. 20508.

In the second situation, the knives are made in the U.S. and are sent to Mexico for sharpening and packaging and are returned to the U.S. Sharpening the knives without any other processing is not a substantial transformation because it is a finishing operation that does not change the name, character or use of the knives. Accordingly, the knives are not subject to the requirements of 19 U.S.C. 1304. However, as noted marking the product or the package "Made in the U.S.A." must be approved by the Federal Trade Commission. There is no requirement that the package be marked to indicate the country of origin of the sharpening or the packaging.

The third situation involves knives of U.S. or foreign origin and wooden storage blocks of U.S. and foreign origin, which will be exported to Mexico. In Mexico, the knife blades are placed in slots in the wooden block, and then the block and knives are shrink wrapped in clear plastic. The wrapping is not intended to be removed until after the ultimate purchaser receives the block and knives. The unit is then placed in a retail box and shipped to the U.S. If the boxes are properly marked with the country of origin, the articles themselves are excepted from marking under 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d), which provides an exception from marking articles if marking the container will reasonably indicate the origin of the article. Although 19 CFR 134.43 specifically requires that knives be marked legibly and conspicuously by designated methods, we have previously ruled that the requirements of 19 CFR 134.43 are not applicable if the imported articles are excepted from individual country of origin marking in accordance with 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d). See HQ 732437, October 4, 1989. If the containers are sold without normally being opened by the ultimate purchaser in accordance with 19 CFR 134.24(d)(2), the containers should be marked to indicate the country of origin of its contents. You also ask if the country of origin of the wooden storage block must be indicated. Because the storage block is a separate article distinct from the knives, if the country of origin of the wooden storage block is different than that of the knives, the country of origin of the block must be clearly indicated.

In the fourth situation, U.S. made knife blade blanks and wooden or plastic handles and rivets will be shipped to Mexico for assembly, sharpening the blade, and packaging for shipment to the U.S. Although no information was submitted describing the assembly process, we assume it is a relatively simple operation. Assuming also that the blades, handles and other component parts are all from the U.S., it appears that the assembly of the parts into a finished knife plus sharpening the blade, a minor finishing operation, does not constitute a substantial transformation. However, if the assembled knives are entitled to a duty exemption under the special program for American-made articles assembled abroad, subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), in accordance with 19 CFR 10.22, the assembled knives would be considered products of the country of assembly, Mexico. If the finished knife is made of entirely American-made materials, the U.S. origin of the material may be disclosed by using a legend "Assembled in Mexico from U.S. Components" or a similar phrase. 19 CFR 10.22.

In the final situation presented, some knives of U.S. and foreign origin will bulk packed. An opaque plastic sleeve is placed over the blade, and knives are placed in a shipping carton. The knives are shipped to retailers who normally display them individually without packaging to the ultimate purchaser. If the knives are displayed and not packaged, in accordance with 19 CFR 134.43, the knives of foreign origin must be marked on the blade legibly and conspicuously by die stamping, cast-in-the mold lettering, etching (acid or electrolytic), engraving, or by means of metal plates which bear the prescribed marking and which are securely attached to the article in a conspicuous place by welding, screws or rivets. Assuming that the knives are sold to the ultimate purchaser outside of the bulk package and the bulk package is disposed of before it reaches the ultimate purchaser, then the bulk package does not have to be marked with the country of origin of the contents.

HOLDING:

The knives and forks and the packaging should be marked with country of origin in accordance with the above discussion.


Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch