MAR-2-05 R:C:S 558732 DEC
Mr. Matthew Chang
Assistant Vice President
ITOCHU International Trading
335 Madison Avenue
New York, New York 10017
RE: Country of origin marking for sunglasses; Substantial transformation;
HRL 734663; HRL 728504; HRL 709266; C.S.D. 80-43 (HRL 710338)
HRL 734474; HRL 731902; HRL 709551
Dear Mr. Chang:
This is in response to your letter dated September 2, 1994, on behalf of your
company, ITOCHU International Trading (a division of ITOCHU International
Incorporated), requesting a ruling on the country of origin marking requirements for
prescription eyeglass frames.
FACTS:
ITOCHU International Incorporated and Marchon/Marcolin intend to import
metal eyeglass frames. When imported, the prescription eyeglass frames will contain
clear plastic "demo" lenses. Prescription lenses will be made in the United States and
will replace the plastic lenses. You indicated in your submission that the goods will be
manufactured in Japan and Malaysia. Masunaga Optical Manufacturing Company, Ltd.
of Japan and Kooki Masunaga Malaysia Sdn. Bhd. P.T. of Malaysia will manufacture
the eyeglass frames. You state that of the total cost of each frame, approximately 60%
will be for processing in Malaysia, and approximately 40% will be for the processing
undertaken in Japan. The raw materials, which are all of Japanese origin, represent
about 25% of the total price.
Your Exhibits B and C detail the processing of the various component parts of
the eyeglass frames and the countries in which this processing occurs. The
bridge, brace, temple, and endpiece will be swaged in Japan. You describe
swaging as the forming of the metal pieces used in the production of eyeglass frames.
The temple will be pressed and buffed in Japan. The endpiece will be pressed and
attached in Japan. After the materials are sent to Malaysia, various processes will be
undertaken to produce the finished eyeglass frames. The bridge and brace will be bent
using heat, pressed, and cut. In addition, the memory treatment which allows the
bridge, brace, and temple to resume its normal shape after bending will be applied in
Malaysia. The temple will also be cut, soldered and electroplated in Malaysia. The
bridge, brace, and front eyewire will be welded together. The endpiece and temple will
be cut, soldered, and electroplated in Malaysia. The tube will also be cut by a blow
torch and glued by induction soldering in Malaysia.
Reproduced below is part of your Exhibit B summarizing the various processes
performed on some of the components of the eyeglass frames.
Part Material Processing in Processing in
Japan Malaysia
1. Bridge Nickel-Titanium Swaging Bending Press
2. Brace " " "
3. Temple " Swaging, Bend Press, Nickel Plating,
Buffing Memory Treatment,
Cutting
4. Endpiece Nickel-Chromium Swaging, Pressing, Cutting
Cutting
5. Front Eyewire " Bending Attaching
ISSUE:
What are the country of origin marking requirements applicable to the finished
prescription eyeglass frames that are manufactured as described above?
LAW AND ANALYSIS:
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 United States
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 United States 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, 302
(1940).
Part 134 of the Customs Regulations implements the country of origin marking
requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), mandates that the
ultimate purchaser in the United States must be able to find the marking easily and
read it without strain.
"Country of origin" is defined in section 134.1(b), Customs Regulations, as
the country of manufacture, production, or growth of
any article of foreign origin entering the United
States. Further work or material added to an article
in another country must effect a substantial transforma-
tion in order to render such other country the "country
of origin" within the meaning of this part.
A substantial transformation is said to have occurred when an article emerges from a
manufacturing process with a name, character, or use which differs from the original
material subjected to the process. Torrington Co. v. United States, 764 F.2d 1563,
1568 (Fed. Cir. 1985), citing Texas Instruments, Inc. v. United States, 631 F.2d 778,
782 (C.C.P.A. 1982), and Anheuser-Busch Brewing Ass'n v. United States, 207 U.S.
556 (1908).
Customs has previously ruled on the marking consequences of various levels of
processing performed to eyeglass frame components. In Headquarters Ruling Letter
(HRL) 734663, dated September 4, 1992, eyewear fronts and temples were imported in
a partially finished condition from various suppliers worldwide. Upon arrival in the
United States, the components were colored and assembled into frames. Other minor
pieces were also added. Customs decided that the color treatment and subsequent
assembly of the partially finished frames did not amount to a substantial transformation
of the product. See, HRL 728504, dated October 15, 1985 (the mere assembly of
imported frames did not constitute a substantial transformation and the country of origin
marking was required on the imported fronts and temples) and HRL 709266, dated July
11, 1978 (assembly of eyeglass frames did not constitute a substantial transformation).
In C.S.D. 80-43 (HRL 710338, dated July 17, 1979), Customs determined that
eyeglass frame components imported from Italy that were subjected to a multi-step
processing operation including cleaning, trimming, machining, engraving, milling,
attachment of hinges, drilling of holes, heating and reshaping, assembly, and a multi-step dyeing process to color the frames underwent a substantial transformation. Citing
the fact that the fronts and temples could not be used in their condition as imported
except by a producer of frames, and that the components must undergo substantial
adjustment to accommodate lenses and fit the human face, Customs determined that a
substantial transformation of the components took place. The processor was deemed
the ultimate purchaser of the components.
In HRL 731902, dated October 11, 1989, Customs again addressed whether
eyeglass frames underwent a substantial transformation. In that case, nickel-silver wire
from Germany or Japan that is twisted and soldered to form unfinished components for
eyeglass frames and temples in Korea were sent to Italy. In Italy, the individual
components were inspected and excess solder removed. The components were
shaped according to style specifications. The fronts and temples were partially
assembled at this point so that they would fit onto a loom for cleaning. Cleaning
involved the application of detergent, ultrasonic cleaning, an electrolyzing rinse and a
neutralizing rinse. Two layers of nickel plating were applied. The plating enhanced the
appearance of the frames, protected them from bruising, and also provided
anti-corrosive protection. One layer of gold plating was applied to further enhance the
aesthetic appeal of the frames, add more corrosion protection, and provide a base for
later painting. The frames were cleaned again and painted with either syringes or
spray guns. Painted, partially assembled frames were then silk screened with a
company name, frame size and frame color. Assembly of the frames was completed by
attachment of temple ends and nose pieces of Italian origin. Plastic demonstration
lenses, also of Italian origin, were inserted so ultimate purchasers of the frames will see
how they look with lenses. The frames were then folded around a backing card and
placed in a plastic bag. Customs concluded that the processing performed in Italy was
sufficiently similar to that described in C.S.D. 80-43 to warrant the same determination,
i.e., that the processing and manufacturing constitute a substantial transformation. The
fronts and temples as imported from Korea were not useable, and it was by virtue of the
Italian processing that the frames were made ready to accommodate lenses and fit the
human face. Additional support for this decision comes from the anti-corrosive
properties added by the plating in Italy, an essential step in preparing the frames for
their ultimate use.
In HRL 709551, dated November 13, 1978, Customs determined that imported
eyeglass fronts and temples were substantially transformed when they were cleaned,
shaped, electroplated, polished, subjected to acid baths, and joined with other
components such as nose pads and plastic ear tips. In that ruling, Customs stated that
the mere addition of nose pads and plastic ear tips by itself did not alter the character
of the imported merchandise. Nevertheless, we held that the physical alteration which
the imported eyeglass fronts and temples undergo as a result of the manufacturing
process performed constitutes a substantial transformation within the meaning of 19
U.S.C. 1304.
Customs further found that the manufacturing processes at issue in HRL 709551
involved a significant expenditure of cost, time and materials and required machining
and the use of special tools and skills. Customs also determined that the plating
processes involved were relatively complex and involved several distinct procedures
and materials which had the effect of altering the characteristics of the metal parts in
such a manner as to make them resistant to the tarnishing from perspiration. In
addition, as a result of the further manufacturing processes, the eyeglass fronts and
temples acquired the proper shape to be worn and to be capable of holding lenses.
Neither the fronts or temples have the proper shape to be worn over the ears and nose,
nor to hold lenses when imported, attributes we consider essential to eyeglass frames.
In HRL 734474, dated April 13, 1992, the following processes performed in the
U.S. on imported eyewear components were found to effect a substantial
transformation: (1) components were tumbled and polished (2) components were
cleaned and hand polished prior to initial plating (3) copper plating was applied as
primer coating (4) nickel/silver was applied as a secondary coating (5) substrate with
primer and secondary plating were removed and selected areas were masked by hand
for plating (6) gold or silver was applied to secondary plating and reviewed, where
necessary, for final gold or silver plating (7) plated components were cleaned and
selected areas were masked for epoxy decorating (8) epoxy paints were applied by
hand and temperature cured (where multi-color processes were used (three or four
colors), all steps involved in single-color application had to be repeated) (9)
components with gold and/or silver plating and epoxy decorations were coated with a
clear lacquer before assembly (10) nosepads were assembled to the bridge of the
frame fronts that have been measured and identified for size (11) temples were
measured for size and temple ear tips were applied to provide comfort to the wearer
(12) measured temple with ear tip were formed with two curves so as to hold the
complete frame to the patient's head (13) temples and fronts were assembled (14)
lenses for sunglasses or demo lenses were ground to specification and assembled (15)
assembled frames with lenses were hand adjusted and individually packaged.
The instant case is analogous to the above-cited cases that find a substantial
transformation. After the eyeglass frame components are imported into Malaysia, the
bridge and brace will be bent using heat, pressed, and cut. In addition, the memory
treatment which allows the bridge, brace, and temple to resume its normal shape after
bending will be applied in Malaysia. The temple will also be cut, soldered, and
electroplated in Malaysia. The bridge, brace, and front eyewire will be welded together.
The endpiece and the temple will be cut, soldered, and electroplated in Malaysia. The
tube will also be cut by a blow torch and glued by induction soldering in Malaysia.
Taken together, the totality of these operations results in a substantial transformation of
the components imported into Malaysia from Japan.
HOLDING:
Eyeglass frames produced in Malaysia as described above from Japanese
components are products of Malaysia. The marking of the frames are required to
indicate Malaysia as the country of origin to satisfy the requirements of 19 U.S.C. 1304.
A marking such as "Malaysia," "Made in Malaysia" or "Product of Malaysia" would be
acceptable. A reference to Japan as the country of assembly would not be appropriate
given the processing described above.
A copy of this ruling letter should be attached to the entry documents filed at the
time this merchandise is entered. If the documents have been filed without a copy, this
ruling should be brought to the attention of the Customs officer handling the transaction
Sincerely,
John Durant
Director, Commercial Rulings Division