MAR-2-05 CO:R:C:V 732350 KG
Donald J. Unger
Barnes, Richardson & Colburn
200 East Randolph Drive
Chicago, Illinois 60601
RE: Country of origin marking of transducers for hearing aids
Dear Mr. Unger:
This is in response to your letter of April 24, 1989,
requesting a ruling regarding the country of origin marking of
imported transducers for hearing aids.
FACTS:
Your client ("the importer") imports transducers from the
United Kingdom, Malaysia and Taiwan mainly to be incorporated
into hearing aids. A transducer is a device used to convert
energy from one form to another. In this case, the term
"transducer" refers to microphones and receivers. The importer
sells at least 90% of the transducers to hearing aid
manufacturers who utilize them in the production of hearing aids.
The remaining transducers are sold to other original equipment
manufacturers who make a variety of different products. The
manufacturing processes involved in the production of these
various products are not described in your letter and therefore,
are not the subject of this ruling.
Hearing aids consist of the following components: a
faceplate or subassembly structure on which the components are
mounted; a microphone; a receiver; a signal processing circuit; a
shell; and various mounting and connecting wires. The microphone
allows sounds to be received by the hearing aid and converted to
electrical energy. The receiver reconverts the processed
electrical energy into sound which is then emitted by the hearing
aid. Before a hearing aid is produced, an ear impression and
case history are provided to the manufacturer.
The production process includes an impression that is made
to create a model of the concha or ear canal entrance. This
model is used to prepare the actual shell for the custom fit
hearing aid product. The audiogram which represents the hearing
capability of the client is provided to the manufacturer. With
the case history and other tests, the amount of amplification or
acoustic correction to be provided at each frequency by the
hearing aid is defined. This information is compared with the
hearing aid manufacturer's list of hearing aid circuit designs to
select the closest components to fit the product design. This
will include the proper microphone, volume control, circuit
board, and receiver, and can include special features which are
different and unique at each hearing aid original equipment
manufacturer.
Appropriate parts are collected and assembled, usually onto
a faceplate. This faceplate is typically a thin plastic disc
which may already contain the battery holder and contacts. Most
manufacturers construct the subassembly faceplate with the
microphone and receiver attached using very small wires.
Once the microphone, receiver and circuit have been attached
to the faceplate subassembly, it can then be 'married' to the
earmold shell. The shell is cemented to the faceplate and excess
faceplate material is removed. The circuit, microphone, and
receiver are all contained within the cemented shell.
Appropriate finish processing is done to the shell to complete
the hearing aid.
ISSUE:
Whether the transducers are required to be individually
marked with the country of origin.
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 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. Pursuant to section 134.35, Customs Regulations (19
CFR 134.35),"an article used in the U.S. in manufacture which
results in an article having a name, character, or use differing
from that of the imported article will be within the principle of
the decision in the case of United States v. Gibson-Thomsen Co.,
Inc., 27 C.C.P.A. 267 (C.A.D. 98). Under this principle, the
manufacturer or processor in the U.S. who converts or combines
the imported article into the different article will be
considered the 'ultimate purchaser' of the imported article
within the contemplation of section 304(a), Tariff Act of 1930,
as amended(19 U.S.C. 1304(a)), and the article shall be excepted
from marking. The outermost containers of the imported articles
shall be marked in accord with this part."
The principle of Gibson-Thomsen Co. is known as substantial
transformation. In The Diamond Match Company v. United States,
49 C.C.P.A. 52 (1962), the court interpreted Gibson-Thomsen Co.,
and determined that imported spatulas used 86% of the time by
ice-cream manufacturers who insert the sticks into frozen
confectionary are substantially transformed into a new article.
The imported spatulas used by the ice-cream manufacturers were
held to be excepted from individual country of origin marking. A
major factor considered was that the imported spatulas were used
by the ice cream manufacturers solely as component parts in the
confections and after such use, clearly lost their independent
identity. The sticks were firmly set into the mixture and could
not be removed without destroying the product. Therefore, the
stick "forms an integral part of the product without which it
could not function as ice-cream-on-a-stick." The process
described in your letter is very similar to Diamond Match in that
the transducers are firmly attached to the faceplate and form an
integral part of the hearing aid and lose their independent
identity or ability to be used in another capacity. The
transducers could not be removed from the completed hearing aid
without destroying the hearing aid.
In a similar case, Customs held in ruling HQ 730952 (May
18,1988), that parts and subassemblies imported to make plug-in
adapters were excepted from individual marking pursuant to 19 CFR
134.35 and it was only required that the outermost containers of
the parts and subassemblies be marked because the component parts
and subassemblies lost their separate identity and merged into a
new and different article of commerce with a new name, character
and use, i.e., a plug-in adapter.
The transducers used by hearing aid manufacturers lose their
separate identity; the transducers are merged into a new and
different article of commerce with a new name, character and use,
i.e., a hearing aid. Because the transducers are substantially
transformed into hearing aids, the transducers are excepted from
individual country of origin marking pursuant to 19 CFR 134.35.
HOLDING:
Transducers used by hearing aid manufacturers to make
hearing aids are substantially transformed and therefore, are
excepted from individual country of origin marking pursuant to 19
CFR 134.35. However, pursuant to 19 U.S.C. 1304(b) and 19 CFR
134.22 at the time of importation the outermost container in
which the transducers reach the ultimate purchaser must be marked
to indicate the country of origin of the transducers.
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch