MAR-2-05 CO:R:V:C 732057 RSD

Horst F. Biernath
Bimex, Incorporated
3617 Shallowford Road
Atlanta, Georgia 30340-1073

RE: Country of origin marking requirement of a knife blade for a rotary fabric cutting instrument

Dear Mr. Biernath:

This is in reply to your letter dated December 16, 1988, supplemented by your letter of February 8, 1990, requesting a ruling on whether an imported circular knife blade for a rotary fabric cutting instrument must be marked with its country of origin. We regret the delay in responding.


You plan to import circular steel knife blades from Taiwan in the sizes of 45mm Diameter .3mm thick 8mm bore and 28mm Diameter .3mm thick 5mm bore. Your customer, Salem, a U.S. manufacturer, assembles the knife blades in rotary cutting instruments which are used to cut fabric. The importation of the knife blades is planned in bulk, but blister packing of one or two blades per pack is possible. The knife blades will be branded with the assembler's name on one side. The box will be marked "Made in Taiwan." You ask if the branding "Made in Taiwan" can be left off the knife blades so that the assembler can advertise its product as "Made in the USA." You indicate that the sales price of the complete assembly is $11.95 and the cost of the knife blade represents approximately 6% of the cost of the finished product. A sample of a circular knife blade and a copy of a brochure explaining the use of the rotary cutting instrument was submitted.


Does the circular knife blade for a rotary cutting instrument have to be marked with the 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 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. Accordingly, the manufacturer or processor who converts or combines constituent materials into different articles will be considered the ultimate purchaser of the constituent materials. If the manufacturer is the ultimate purchaser, the imported article is excepted from marking (see section 134.35, Customs Regulations).

In determining whether there is a substantial transformation, the fundamental question in this case is whether the circular knife blade loses its identity when it is assembled in the rotary fabric cutting instrument. In HQ 731432 (June 6, 1988), we pointed out six factors to be considered in determining whether an imported article loses its identity when it is combined with a domestic article:

1) whether the article is completely finished;

2) the extent of the manufacturing process of combining the article with its counterparts as compared with the manufacturing of the subject article;

3) whether the article is permanently attached to its counterparts;

4) the overall importance of the article to the finished product; see Uniroyal, Inc. v. United States, 3 CIT 220, 542 F.Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed Cir, 1983) (no substantial transformation occurred where an imported footwear upper, the essence of the finished article, was combined with a domestically produced sole);

5) whether the article is functionally necessary to the operation of the finished article, or whether it is an accessory which retains its independent function; and,

6) whether the article remains visible after the combining.

These factors are not exclusive and there may be other factors relevant to a particular case and no one factor is determinative. See HQ 728801 (February 26, 1986).

Applying these factors to this case and to this product, we find that the circular knife blade is a finished product. The process of attaching the blade to the handle of the rotary cutting instrument does not appear to be an extensive process when compared to the amount of processing involved in producing the blade itself. You have informed a member of my staff in a telephone conversation that when the blade becomes dull, it can be easily replaced. We assume that the purpose of blister packing one or two blade per pack is for the replacement market as opposed to the bulk packing for the manufacturer. The knife blade is absolutely necessary to the operation of the rotary cutting instrument, and remains visible after the combining.

You contend that because the knife blade represents only about 6 % of the value of the rotary cutting instrument, it should not have to be marked. However, the relative value of the imported item to the finished good is only one factor to be considered and may be outweighed by other factors. In HQ 719118 (April 20, 1982), we found that a calendar which was combined with a plastic holding device would still have to be marked even though the calendar represented only about 8 % of the value of the finished product because it was an essential element of the final product.

Likewise here, the circular knife blade is a critical element of the finished product. We find it also significant that the blade is easily replaceable and when the blade is sold as a replacement part it will have to be marked with the country of origin. In considering the factors mentioned above, we find that the knife blade does not lose its separate identity when it is assembled with the handle of the rotary cutting instrument.

Section 134.14(a), Customs Regulations (19 CFR 134.14(a)), requires that when an imported article is of a kind which is usually combined with another article after importation but before delivery to an ultimate purchaser and the name indicating the country of origin of the article appears in a place on the article so that the name will be visible after such combining, the marking shall include, in addition to the name of the country of origin, words or symbols which shall clearly show that the origin indicated is that of the imported article only and not that of any other article with which the imported article may be combined after importation. Therefore, to indicate to the ultimate purchaser that only the blade is of foreign origin, the blade should be marked "Blade Made in Taiwan."

You have also requested a ruling on the proper tariff classification number for the knife blade under the Harmonized Tariff Schedule of the United States. By copy of this letter, we have referred this request to our General Classification Branch so that they can review the matter and issue you a ruling on the classification of this product.


Assembling the circular knife blade with the handle of a rotary cutting instrument is not a substantial transformation. Because it does not lose its separate identity, the circular knife blade must be marked "Blade Made in Taiwan" in accordance with 19 U.S.C. 1304 and 19 CFR Part 134.


Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch