Mr. Mark Conti
Lawee, Inc
3083 Walnut Avenue
Long Beach, California 90807

RE: Country of origin marking requirements for bicycles made with components from several different countries; bicycles frames; component marking; assembly; 19 CFR 134.46; HQ 733266; HQ 734478

Dear Mr. Conti:

This is in response to a letter dated September 2, 1993, submitted by Lawee, Inc. regarding the country of origin marking for bicycles imported from Taiwan. We regret the delay in responding. A sample bicycle accompanied your submission. You request that the bicycle be returned to your company. The sample will be returned provided that you arrange and pay for the shipping. A copy of a trademark registration with the United States Patents and Trademarks Office was also submitted.


Lawee, Inc. imports bicycles from Taiwan. The bicycles are sold in the United States under the name Univega. The sample bicycle is known as the SHOCKBLOCK model. The bicycle is made with many different components and subassemblies. The bicycle tubes and frames are manufactured in Taiwan. The other components of the bicycle are made in several different countries. For example, the rims are made in France; the seat (saddle) is made in Italy; the shock rear is made in Italy. Other significant components such as the crank, pedals, gears, brakes, etc. could be made in other countries.

All the components are put together into a finished bicycle in Taiwan. Certain components are partially disassembled for ease of shipping so that the bicycles can be put in a box. The bicycles are shipped in boxes marked "UNIVEGA BICYCLE", "MADE IN

TAIWAN ROC" to Lawee's warehouse facilities in Long Beach, California. The bicycles are to sold only through retail stores that specialize in selling bicycles. They are not sold in department or general toy stores. The retail stores reassemble and test the bicycles for the in store showroom display and ultimate sale to the consumer. It is not intended that the consumer will reassemble the bicycles.

The sample bicycle is marked on the down tube near the crank with a decal which reads "Made in Taiwan." Lawee has indicated that the "Made in Taiwan" decal has been moved to the tube just above the fork so that it will be more visible. Other components of the bicycle have country of origin markings on them as well. These markings are put on the components by their manufacturers and are not removed when the bicycle is assembled together in Taiwan. In particular, the rims are marked "Made in France". On the sample the shock rear has a marking "Made in USA". Lawee has indicated that on all new shipments, this marking has been removed by its employees. Although the seat (saddle) has a "Taiwan" marking on the plastic mold, it and the seat tube also has the marking "Concept USA", which is a represented to be a registered trade mark.


What is the country of origin of the finished bicycles which are assembled in Taiwan and contains components from several countries?

How must the bicycle be marked under the country of origin marking law, if the individual bicycle components are marked with their own country of origin?


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. 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 (1940).

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 "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. In such circumstances, the imported article is excepted from marking. The outermost containers of the imported article shall be marked. (See 19 CFR 134.35).

The first question that must be addressed is what is the country of origin of the finished bicycle. Bicycles can be complex machines, containing many different components and subassemblies. Generally, these components must be assembled together to make the finished bicycle. 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 a new article. Belcrest Linens v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed.Cir. 105, 741 F.2d 1369 (1984). Assembly operation which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, C.S.D. 80-111, 85-25, 89-118, 90-51 and 90- 57.

In HQ 734478 (June 14, 1993), we ruled that bicycle frames imported from Taiwan, which were subsequently acid washed, painted and assembled with other components to make bicycles were not substantially transformed. In the ruling, we noted that the bicycle frame is the most costly component and is one of the essential components of the bicycle (if not the most essential component) imparting to the bicycle its overall shape, size and character. In this case the tubing for the bicycle frame is made in Taiwan, and the tubes are welded together to make the frames in Taiwan. In addition, all the other components of the bicycles are assembled together in Taiwan to make the finished bicycle. Because the bicycle is assembled in Taiwan and one of the bicycle's most significant components, the frame, is made in Taiwan, we find that the country of origin of the bicycle is Taiwan. Although the other components come from several different countries, when they assembled together in the Taiwan they each lose their separate identity and become an integral

part of a new article of commerce, a bicycle. Accordingly, the bicycle must be marked to indicate that its country of origin is Taiwan.

Although the sample bicycle is marked on one of the tubes of the frame with "Made in Taiwan", we note that several of the components are also marked with their own country of origin. For example, the rims are marked with a decal which reads "Made in France". In HQ 733266 (August 15, 1990), a case in which components for an engine were individually marked with their own country of origin, we stated that the prominent display of country names such as the U.S.A. and Canada on engine components was likely to cause confusion as to the correct country of origin of the finished engines. Therefore, we indicated that the marking on the engine would be unacceptable unless there was a prominent marking which clearly displayed the country of origin of the engine and also specified that the country names on the components referred only to the components. We required a marking which would clarify the meaning of the country names on the components, such as "Engine Made in Brazil; country of origin of components as marked."

We believe that the same analysis would apply to the bicycles in this case. The prominent display of country names, other than Taiwan on the components, could be very confusing and misleading to the ultimate purchasers of the bicycles. If these markings on the components are not visible after the final assembly of the bicycle by the retailer then the problem is resolved and no further marking would be needed. However, if the marking on the components remains visible after final assembly by the retailer, then an additional marking clarifying the origin of the bicycle would be necessary. One alternative would be to put an additional marking on each part, stating that the country name on the component refers only to the country of origin of that particular part, such as "Rim Made in France." However, this solution may be impractical if there are numerous components on the bicycle which have country names on them. Another approach would be to have one central marking for the bicycle, explaining that the country names on the components parts refers only to the origin of the component parts. For example, "Bicycle made in Taiwan; origin of other components as marked". This marking could be permanently embossed on to the frame, but if that proves to be too burdensome, we believe that putting this marking on a hang tag which is prominently and securely affixed to the bicycle would be acceptable. In any case, the frame should also be conspicuously and permanently marked "Made in Taiwan" as the sample bike presently is marked.

A remaining issue is the applicability of 19 CFR 134.46 to the facts of this case. 19 CFR 134.46 requires that when the name of a city or locality in the U.S. or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. The purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the actual origin of the imported goods. Although the country of origin of the finished bicycle is different than the country of origin of the component parts and some parts are marked with their own country of origin, we find if the bicycle is conspicuously marked with a phrase such as "Bicycle Made in Taiwan - country of origin of components parts as marked" or a similar phrase that there is little chance of confusion regarding the origin of the bicycle and its components because the ultimate purchaser would be informed regarding the origin of bicycle and that the country references on the components refer only to the only origin of the components. Considering the difficulty of requiring an additional marking on or near each component that has a country reference on it, we conclude that the requirements of 19 CFR 134.46 would be satisfied by this central country of origin marking. The prominence of the markings on the components parts is to be taken into account in determining whether the required the country of origin marking on the bicycle is sufficiently conspicuous. See HQ 733266 (August 15, 1990). HOLDING:

The country of origin of the finished bicycle is Taiwan. If the country of origin markings on the components are still visible after the assembly of the bicycle, an additional conspicuous marking clarifying that the bicycle is made in Taiwan and that the country references on the components refer only to origin of the components will be necessary. This additional marking can be permanently embossed onto the bicycle or included on a hang tag securely attached to the bicycle. This method of marking satisfies the requirements of 19 CFR 134.46.


John Durant, Director