MAR-2-05 CO:R:C:V 734213 RSD

Mr. Bill Yates
General Manager
Interactive Information Systems
52 Marway Circle
Rochester, N.Y. 14624

RE: Country of origin marking requirements for an imported computer monitor made into a touchscreen monitor; substantial transformation, computer devices, electronics, circuits; 19 CFR 134.35

Dear Mr. Yates:

This is in response to your letter dated June 10, 1991, requesting a ruling on the country of origin marking requirements for an imported computer monitor which your company will convert into a touchscreen monitor for a blood analyzer. We have received your supplemental submission dated August 26, 1991, further explaining the product and the operations involved in converting the monitor.


Inter-ad Inc., makes a device called a touchscreen monitor. The touchscreen monitor allows the user to input information directly into a computer by touching the monitor's screen. It is sold exclusively to one company who uses it as the standard interface device for a piece of medical equipment, a blood analyzer, which they manufacture and sell worldwide.

The touchscreen monitor basically consists of two major parts (1) a touchscreen made in the U.S. by Elographics costing about $400 and (2) a monitor made in Korea by Samsung Electronics, costing about $100. The product also contains other minor parts and cables which are all made in the U.S. and cost a total of approximately $150.

The first step in converting the imported computer monitor into a touchscreen monitor is to test the monitor with a test pattern from a test computer. The monitor is then disassembled and the electronics are disconnected from the cathode ray tube (CRT) by unplugging all six cables connecting the CRT to the monitor circuit board. The video cable is also removed. The light emitting diode (LED) is unplugged from the monitor circuit board. The International Electrotechnical Commission (IEC) power plug is then installed. The CRT is then carefully lifted out.

The bucket, swivel base, and front plastic bezel are prepared for painting. These pieces are then sent to the paint finisher. The transorb board is then installed. The touchscreen is then placed on the monitor and tested by running a calibration program made by Elographics. The touchscreen is then adhered to the CRT by placing pressure sensitive double-sided foam tape around the inside perimeter of the touchscreen to form a sealed gasket. The touchscreen is aligned by using an assembly fixture. The touchscreen is placed onto the face of the CRT and pressure is applied around the perimeter of the touchscreen.

The monitor is then reassembled. First, the LED is reinstalled to the front of the bezel with a small zinc screw. The CRT is reattached to the bezel. The monitor circuit board is then put back into place and loosely secured by using screws and washers. The video cable is reattached. The (electrical magnetic interference) EMI shield is then taped and installed. The back bucket is replaced. The touchscreen cable is connected to the black strain relief plate. The unit is then tested and readied for shipment. The anti-swivel base is assembled. The unit is packed and carton sealed.

When the unit is completed, it sells for between $1,000 and $1,200 dollars. You indicate that after the processing is completed, the monitor can no longer function in a regular computer system without an adapter because of the installation of the power plug and the cutting of the cables.


Is the imported computer monitor substantially transformed by the processing described above which converts it into a touchscreen monitor?


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 its 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; C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 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 the marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed. (See 19 CFR 134.35). In such circumstances, the imported article is excepted from marking. The outermost containers of the imported articles shall be marked.

In HQ 734097, November 25, 1991, Customs ruled that imported terminal video shells (computer terminal housings that contain video electronics, but no logic boards), were substantially transformed in the U.S. when they were processed by the installation of certain key components, such as terminal logic boards, to make them into dumb terminals for certain computer systems. We indicated that the addition of the logic boards creates a new article. In this case, the imported monitors are more complex than the shells, but still undergo a significant amount of processing. The domestic processing results in an article that has a different name, character, and use. The article will be known not simply as a computer monitor but as a touchscreen monitor. The touchscreen monitor's commercial identity differs dramatically from that of the plain computer monitor. Most significantly, the touchscreen monitor has a different use. As imported, the monitor is merely capable of displaying information. However, after the domestic processing, the touchscreen monitor is more than a device which will display information. It will serve as an interface device in which information can directly be input for the blood analyzer unit. We find that this touchscreen capability is not just a simple enhancement of the monitor, but rather a significant change in its very nature because it can be used for new applications that it previously could not be used. For example, in this case, the monitor can now function as part of the blood analyzer unit. In addition, the processing involves the combining of the imported monitor with important domestic parts such as the touchscreen and the cables. Significantly, these domestic parts have a value more than five times greater than the monitor. Moreover, we have been advised by the Office of Scientific and Laboratory Services and the National Import Specialist that the domestic processing is complex requiring skill and expertise in changing the wiring and the circuitry of the monitor.

Accordingly, we find that the imported computer monitors are substantially transformed by the domestic processing done by Inter-ad to convert them into touchscreen monitors. In accordance with 19 CFR 134.35, Inter-ad is the ultimate purchaser of the imported monitors.


The imported computer monitors are substantially transformed when they are processed by Inter-ad into touchscreen monitors and in accordance with 19 CFR 134.35, Inter-ad, Inc. is the ultimate purchaser of the imported monitors. The monitors are excepted from individual marking provided the cartons in which Inter-ad Inc. receives them are properly marked with the country of origin and Customs officials at the port of entry are satisfied that the monitors will be used by Inter-ad, Inc. only in the manner set forth above.


John Durant, Director
Commercial Rulings Division