MAR-2-05 CO:R:C:V 734214 GRV

Ms. Shirley Harvey
Customs Manager
Browning
3005 Arnold Tenbrook Road
Arnold, Missouri 63010-9406

RE: Country of origin marking of fishing rods (without reels) made in Taiwan and assembled in China. Ultimate purchaser; 19 CFR 134.1(d); foreign processing (assembly); substantial transformation; Belcrest Linens; C.S.D. 80-111; C.S.D. 85-25; T.D. 67-173

Dear Ms. Harvey:

This is in response to your letters of June 12, and October 30 and 31, 1991, requesting a ruling regarding the country of origin marking of fishing rods (without reels) made in Taiwan and assembled in China. Photographs showing the various component parts and the assembled fishing rods were submitted.

FACTS:

Fishing rods (without reels), assembled in China from component parts manufactured in Taiwan, are imported by your company. The component parts of the fishing rods consist of a fishing rod--a composite of approximately 40% graphite and 60% fiberglass, foregrip, reel seat, butt grip, and line guides, which can range in number from 5-11, depending on the style fishing rod. These components parts comprise approximately 85% of the total value of the finished fishing rods.

In China, the parts are assembled together: the foregrip, reel seat and butt grip are glued onto the rod, and, the line guide components are thread wrapped onto the rod and the thread is epoxy encapsulated. The assembled fishing rods then have various information, including the country of origin, silk- screened onto the rods, and are packaged for export to the U.S. The rods are enclosed in a plastic bag, and six rods are packaged in an inner carton, with sixty rods packaged in a master carton. Although most fishing rod sales are in quantities of six or multiple units of six, individual rods are sold, and the plastic bag is usually removed by distributors to display the fishing rod. You request a ruling as to the country of origin of the imported products and also what the marking should indicate.

The photographs submitted admit to the assembly of the fishing, but do not show any legible country of origin marking.

In a telephone conversation with a member of my staff on October 30, 1991, another representative of your company (Kent Heitz) stated that there was no desire to indicate more than the country of origin. Thus, you asked us to disregard other marking issues, such as "assembled in China," which would raise a marking issue under 19 CFR 134.46.

ISSUE:

Whether the imported fishing rods must be marked to indicate their country of origin, as required by 19 U.S.C. 1304.

LAW AND ANALYSIS:

The marking statute, 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) 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 pur- chaser the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The primary purpose of the country of origin marking statute is to "mark the goods so that at the time of purchase the ulti- mate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influ- ence his will." United States v. Friedlaender & Co., 27 CCPA 297, 302, C.A.D. 104 (1940).

The "ultimate purchaser" is defined generally as the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d). If an article is to be sold at retail in its imported form, the purchaser at retail is the "ultimate purchaser." 19 CFR 134.1(3).

The country of origin for marking purposes is defined at 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean 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 trans- formation in order to render such other country the "country of origin" within the meaning of Part 134. A substantial transfor- mation occurs when articles lose their identity and become new articles having a new name, character, or use. Koru North America v. United States, 12 CIT 1120, 701 F.Supp. 229 (1988). The question of when a substantial transformation occurs for marking purposes is a question of fact; to be determined on a case-by-case basis. Uniroyal Inc. v. United States, 3 CIT 220, 542 F.Supp. 1026 (1982), aff'd, 1 Fed.Cir. 21, 702 F.2d 1022 (1983).

In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed.Cir. 105, 741 F.2d 1368 (1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, C.S.D.s 80-111, 85-25, 89-110, 89-118, 89-129 and 90-97.

In T.D. 67-173, 1 Cust.Bull. 366 (1967), we considered whether the domestic assembly of imported parts to make fishing rods and reels constituted a substantial transformation and found that it did not, stating that the assembly of all or substan- tially all of the components imported did not result in the manufacture of a new and different article. Accordingly, we stated that one of the parts, such as the main reel housing, should be marked to indicate the country of origin, so that the marking remains legible and conspicuous after the reels were assembled. See also, C.S.D. 80-111 (foreign fan components not substantially transformed by domestic, 20-step, assembly-line operations, as the identity of the foreign components was not lost or physically altered, no skilled labor or specialized equipment was required, and the assembly costs were relatively low).

In this case, we do not find that the assembly in China of foreign fishing rod components constitutes a substantial trans- formation of the Taiwanese components. The extent of operations performed is simple--requiring only three assembly operations (gluing, tying/binding, and epoxy encapsulation), which add only 15% to the total value of the finished fishing rods--and the component parts do not lose their identity--no change to the physical dimensions of the components occurs. Accordingly, the imported fishing rods must be legibly and conspicuously marked to indicate their country of origin: "Taiwan." You have stated that the country of origin is silk-screened onto the rods, which accords with designation in T.D. 67-173 that one of the main parts of the fishing rods be marked. However, as no sample marking was submitted, we cannot rule as to whether the print size you elect to denote the country of origin marking is sufficient to be considered conspicuous within the meaning of 19 U.S.C. 1304.

HOLDING:

The imported fishing rods must be marked to indicate that Taiwan is their country of origin, as required by 19 U.S.C. 1304, as the foreign (China) assembly operation is a minor operation which does not substantially transform the Taiwanese component parts. Accordingly, you are advised to check with the Customs officials at the port you intend to import these fishing rod components through to ensure that the country of origin marking method you employ meets the conspicuous marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.

Sincerely,

John Durant, Director
Commercial Rulings Division