MAR-2-05 CO:R:C:V 735169 RC
Victoria Jacks, Vice President
Roatan International Corporation
20 West 38th Street
New York, New York 10018
RE: Country of Origin Marking for Mechanical Pencils; Assembly;
Combining; HQ 726001.
Dear Ms. Jacks:
This is in response to your letter of April 29, 1993,
requesting a ruling on the country of origin marking requirements
for mechanical pencils forwarded to us by Customs New York office.
Samples of the components were submitted for examination.
FACTS:
Roatan International Corporation imports clutch mechanisms
from Japan for assembly in the U.S. with U.S. components to produce
completed mechanical pencils. The U.S. parts comprise the (1)
plastic pencil barrel, (2) plastic erasure cup, (3) the erasure,
and (4) snap-on clip (nickel plated); all exterior portions of the
completed pencils. The assembly operation entails inserting clutch
mechanism into a pencil barrel, screwing in and attaching the
erasure accoutrements, and placing a cap over the pencil tip. The
imported clutch mechanism accounts for less than 50 percent of the
total cost of the completed pens.
ISSUE:
Whether the imported plastic pencil parts must be marked to
indicate their country of origin, as required by 19 U.S.C. 1304.
LAW AND ANALYSIS:
The marking statute, section 304, 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 purchaser
in the U.S. 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 "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). The "country of origin"
for marking purposes is defined by section 134.1(b), Customs
Regulations (19 CFR 134.1(b)), to mean the country of manufacture,
production, or growth. 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
marking purposes. An article used in manufacture resulting in a
new article having a different name, character, or use will be
considered substantially transformed. If the manufacturing process
is a minor one which leaves the identity of the imported article
intact, the consumer or user of the article, who obtains the
article after the processing, will be regarded as the "ultimate
purchaser." 19 CFR 134.1(d)(1) and (2).
The facts presented in the instant case are right on point
with the facts in Headquarters Ruling Letter (HRL) 726001 dated
September 11, 1984. There, Customs found that domestic assembly
of the foreign-manufactured clutch mechanism with the U.S.
components were substantially transformed, not required to be
marked. Likewise, here, we find that the domestic assembly of the
Japanese-manufactured clutch mechanism with the U.S. components
effects a substantial transformation in the U.S. Therefore, the
clutch mechanisms are not required to be marked "Japan".
HOLDING:
The shipping cartons containing the Japanese-manufactured
clutch mechanism are required to be marked to indicate the country
of origin, "Japan". However, the clutch mechanisms and the
finished pens do not need to be marked. If you wish to indicate
the U.S. origin of the pens, be advised that any articles labeled
"Made in USA" must comply with the requirements of the Federal
Trade Commission. We suggest that you direct any questions on this
aspect to the Federal Trade Commission.
Sincerely,
John Durant, Director