MAR-2-05 CO:R:C:V 733979 NL

Peter J. Koenig, Esq.,
Ablondi & Foster, P.C.
1130 Connecticut Avenue, N.W.,
Suite 500
Washington, D.C. 20036

RE: Steel Cores for Brake Shoe Assemblies; Substantial Transformation; Ultimate Purchaser; Forgings; 19 CFR 134.35.

Dear Mr. Koenig:

This is in reply to your letter of December 4, 1990, in which you request a ruling concerning the country of origin marking requirements applicable to certain parts of automotive brake shoe assemblies.


Your client, Friction, Inc. ("Friction"), imports steel cores which are used exclusively in the manufacture of brake shoe assemblies. The cores are not separately sold. The manufacture consists of cleaning and painting the core, bonding an asbsestos brake lining to it in a bonding oven using dry cement, and smooth finishing the brake shoe assembly. In some cases additional brake hardware may be affixed to the assembly. Samples of the steel core and brake shoe assembly were submitted.

It is urged that the importer is the ultimate purchaser of the steel cores within the meaning of 19 CFR 134.35., because he effects a substantial transformation of the imported steel cores by using them in the manufacture of brake shoe assemblies. It is stated that the manufacture of the assembly costs considerably more than the manufacture of the core, and that the price of the assembly exceeds the price of the core by a similar margin. The cost of painting equipment and bonding ovens is over $100,000.


Does the manufacture of the brake shoe assemblies substantially transform the steel cores such that Friction is their ultimate purchaser?


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. -2-

1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of its country of origin.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirement and exceptions of 19 U.S.C. 1304. In general, the ultimate purchaser is the last person in the U.S. to receive the article in the form in which it was imported. If an imported article is used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the article to a process which results in a substantial transformation of the article. See, 19 CFR 134.1(d). A substantial transformation is said to occur if, after processing, a new article emerges having a new name, character, or use. See, 19 CFR 134.35. The imported article which is so transformed is excepted from country of origin marking, although the outermost containers of the imported article must be marked in accordance with the marking requirements. Id.

In this case it is our opinion that the steel cores are substantially transformed by their use in brake assemblies. In their imported state the steel cores are plainly unfinished and lack essential components of brake shoe assemblies, namely the asbestos linings. Compared with the manufacture of the cores, the process which results in the finished brake assembly is extensive and costly. The steel core is permanently attached to the friction lining, and is of secondary importance to the lining. The steel core has no independent function, but rather loses its separate identity by incorporation in the brake shoe assembly. This finding is reinforced by the relative costs to manufacture and prices of the cores and assemblies. Finally, it is noted that the core is never sold separately, but only as part of a brake shoe assembly.


Imported steel cores are substantially transformed by incorporation in brake shoe assemblies. The importer of steel cores who does such manufacturing is their ultimate purchaser, and the cores are excepted from country of origin marking. At importation the outermost containers of the cores must be marked in accordance with 19 CFR 134.35.


John Durant
Director, Commercial
Rulings Division