MAR-2-05 CO:R:C:V 734050 KG
Mr. Robert G. Wallen
Geo. S. Bush & Co., Inc.
590 Subway Terminal Bldg.
417 South Hill Street
Los Angeles, California 90013
RE: Country of origin marking of imported computer printers
Dear Mr. Wallen:
This is in response to your letter of February 12, 1991,
requesting a country of origin ruling on behalf of Star Micronics
America Inc., regarding imported impact dot matrix computer
The computer printers involved in this case are comprised of
five units: head; mechanism; circuit; power source; and outer
case. The circuit, power source and outer case units are
assembled or molded in Japan. The head and mechanical units are
made in Japan but sent to China un-assembled. All five units are
shipped to China for final assembly.
The assembly operation done in China involves manual
assembly, using screwdrivers and screws, of the head and
mechanical units. Then the head, mechanical, circuit and power
source units are mounted to the outer case, using screwdrivers
and screws. Your client states that it is possible to master the
assembly skills with approximately one month of training. The
assembly process takes about 45 minutes per printer.
The cost of the Japanese parts is $78.25 and the cost of the
assembly in China is $3.79.
What is the country of origin of these computer printers
described above for the purposes of section 304 of the Tariff Act
of 1930, as amended?
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. The Court of
International Trade stated in Koru North America v. United
States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In
ascertaining what constitutes the country of origin under the
marking statute, a court must look at the sense in which the term
is used in the statute, giving reference to the purpose of the
particular legislation involved. The purpose of the marking
statute is outlined in United States v. Friedlaender & Co., 27
CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that:
"Congress intended 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
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), Customs Regulations (19 CFR
134.1(b)), defines the country of origin of an article 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 for country of origin marking purposes.
A substantial transformation occurs when articles 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
(1940), National Juice Products Association v. United States, 10
CIT 48, 628 F.Supp. 978 (CIT 1986), Koru North America v. United
States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988).
The conclusion as to whether or not a particular article is
substantially transformed is determined on a case-by-case basis.
For instance, Customs ruled in C.S.D. 80-111 (September 24,
1980), that the U.S. assembly of imported ceiling fan components
on an assembly line did not constitute a substantial
transformation. The ceiling fan motors are assembled in a 20-
step assembly line procedure. The manufacture of the fan blades
is a 5-step procedure. The assembly of the ceiling fans was not
considered a substantial transformation because the manufacturing
processes described were "basically assembly line procedures" not
requiring large amounts of skilled labor or specialized
equipment. The cost of the manufacturing processes relative to
the cost of the components appeared to be low.
On the other hand, the United States Customs Court held in
Carlson Furniture Industries v. United States, 65 Cust. Ct 474
(1970), that imported finished and unfinished chair parts
assembled in the U.S. into finished chairs was a substantial
transformation. After importation, the importer assembles, fits
and glues the wooden parts together, steel pins the key joints,
cuts to length and levels the legs, and in some instances,
upholsters the chair and fits the legs with glides and casters.
The court determined that the imported articles required the
importer to perform additional work on them and material would
have to be added to them to create a functional article of
commerce and that more than the mere assembly of parts together
This case is very similar to the ceiling fan case; all the
parts are made in Japan and merely assembled with a screwdriver
in China in a process with a low value relative to the cost of
the components. Most of the value of the finished printer is
derived from the Japanese parts. Unlike Carlson, no material is
added in the country of assembly and no significant additional
work is done in the country of assembly. It appears that the
Chinese processing involves a mere assembly. Based on these
considerations, we conclude that the assembly of the computer
printer does not constitute a substantial transformation.
Therefore, the country of origin of the computer printers would
be Japan, the country where all the parts that comprise the
finished article are made.
The assembly in China of the computer printer described
above does not constitute a substantial transformation.
Therefore, the country of origin of the imported computer
printers would be Japan, the country where all the parts that
comprise the printer are made.