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 printers.


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?


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 his will."

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 was required. 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. HOLDING:

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.


John Durant