MAR-2-05 CO:R:C:V 732999 NL

Peggy Chaplin, Esq.,
Ober, Kaler, Grimes & Shriver
1600 Maryland National Bank Bldg.
10 Light Street
Baltimore, Maryland 21202

RE: Country of Origin Marking of Automotive Hinge Parts

Dear Ms. Chaplin:

This is in response to your letter of December 22, 1989, requesting a ruling that an exception from country of origin marking applies to parts of automotive hinges which are imported into the U.S. and incorporated into finished vehicles.

FACTS:

Your client (the buyer), will purchase halves of door hinges manufactured abroad under a direct contract with the manufacturer seller. After importation the buyer will assemble the halves into completed hinges by means of U.S.-origin pins. The hinges will, in turn, be incorporated into a vehicle for sale to the U.S. government and other customers.

For a previous shipment the buyer requested that the hinge parts be excepted from country of origin marking on the basis of section 134.32(h), Customs Regulations (19 CFR 134.32(h)), which provides that an article may be excepted from individual country of origin marking if the ultimate purchaser must necessarily know the country of origin of an article by reason of the circumstances of its importation. Customs officials granted the request on the basis of letters submitted by the buyer stating that it was the ultimate purchaser of the hinge halves and stating that it knew by reason of its contract that the seller was supplying articles originating in the country of manufacture.

You are now requesting on behalf of your client a binding ruling covering prospective transactions that the hinge parts may be excepted from individual country of origin marking. Invoices, purchase orders, technical drawings and other correspondence have been submitted, together with a sample of the marking which will be used on the containers of the imported hinge parts.

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ISSUE:

May imported hinge parts be excepted from country of origin marking when assembled into completed hinges and incorporated into vehicles?

LAW & 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.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Section 134.35, Customs Regulations (19 CFR 134.35), provides that a manufacturer who converts or combines an imported article into a different article will be considered the ultimate purchaser of the imported article, and the article will be excepted from country of origin marking. For this exception to apply, the conversion or combining must constitute a substantial transformation within the principle of United States v. Gibson- Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98). It is your position that the buyer is the ultimate purchaser of the hinge parts because it substantially transforms them into finished hinges. You urge that since the buyer is the ultimate purchaser, the hinge parts may be excepted from country of origin marking pursuant to 19 CFR 134.32(h), or pursuant to 19 CFR 134.32(d), which provides for an exception from country of origin marking when the marking of an article's container will reasonably indicate its country of origin.

We are unable to agree with your contention that the hinge halves are substantially transformed into a new article with a different name, character or use by being connected together with a pin. In our view, such processing constitutes a mere assembly of parts which are intended to fit together as a complete article; in this case a hinge.

However, the incorporation of the hinges into the finished vehicle is a substantial transformation within the meaning of 19 CFR 134.35, such that the buyer is the ultimate purchaser of the hinge halves. Customs has previously ruled on numerous occasions that the incorporation of components into finished machines substantially transforms the components. For example, in HQ 730837 (June 10, 1988), we ruled that the parts which constitute

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a typewriter are substantially transformed when the typewriter is produced. In HQ 731076 (November 1, 1988), we ruled that components from Japan, Taiwan and the U.S. lose their separate identities when incorporated into cars and are substantially transformed. We stated that the manufacture of an automobile was more than a mere assembly operation. Finally, in HQ 730025 (January 12, 1987), we ruled that a casting imported into the U.S. to be used in the production of a door exit device could be excepted from individual country of origin marking pursuant to 19 CFR 134.35. We found that the U.S. producer of the device was the ultimate purchaser of the casting which, when combined with numerous other components, lost its separate identity and was substantially transformed.

In this case we find, pursuant to 19 CFR 134.35, that the hinge parts, when incorporated into the vehicle, are substantially transformed, and that the buyer of the hinge parts is the ultimate purchaser. We also find that the hinge parts may be excepted from individual country of origin marking pursuant to 19 CFR 134.132(h), as an article for which the ultimate purchaser, must necessarily know the country of origin of the hinges by reason of its contract with the producer.

HOLDING:

Imported hinge parts purchased under a direct contract with the foreign manufacturer may be excepted from individual country of origin marking pursuant to 19 CFR 134.32(h), provided Customs officials at the port of entry are satisfied that the articles will be used only in the manner described above and will not be otherwise sold.

Sincerely,

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

cc: District Director,
Chicago, Ill.