MAR-2-05 CO:R:C:V 735125 RSD

Mr. Peter E. Schwartz, President
Apogee Golf, Inc.
10 Commerce Park North-Unit 9
Bedford, New Hampshire 03110

RE: Country of origin marking of imported golf club heads with a trademark or trade name containing the words "American" which will be assembled with the shafts to make the finish golf clubs in the U.S.; substantial transformation; trade name; ultimate purchaser; 19 CFR 134.47; 19 CFR 134.46; 19 CFR 134.36(b); HQ 734327; HQ 734785; HQ 734249

Dear Mr. Schwartz:

This is in response to your letter dated April 16, 1993, concerning the country of origin marking requirements for imported golf club heads that will be assembled in the United States with a domestic shaft and grip to make a finished golf club. The Boston District of Customs advised you to seek a ruling in this matter. You have submitted two sample golf club heads. In addition, you faxed a copy of a trademark registration that was filed with the U.S. Patent and Trademark Office.


Apogee Golf, Inc., located in Bedford, New Hampshire, makes and sells golf clubs. It is importing golf club heads from China and Taiwan. The golf club heads will be assembled with U.S. made shafts and grips in the U.S. to make finished golf clubs. One of the sample golf club heads, known as the "Black Thunder" has the phrase "BY AMERICAN GOLF DESIGN" etched into the bottom of the club head. An adhesive label marked with the phrase "MADE IN TAIWAN REPUBLIC OF CHINA" has been placed over the American golf design logo. The second club head has the phrase "AMERICAN GOLF DESIGN" etched on the bottom. It also has the word "AMERICAN" next to a red sideways triangle etched on the top of the club. An adhesive label with the marking "MADE IN CHINA" covers the word American.

Presently, each head imported into the United States is placed in its own individual plastic bag which is marked with the country of origin of the head on the bag. You ask whether the club heads need to be individually marked with their country of origin, and if so whether your present method of marking the club heads is acceptable. You also want to know if the country of origin marking has to be permanently etched into the heads or if using stickers to mark the country of origin of the heads would be acceptable. You report that the "Black Thunder" heads represent less than 50 percent of the cost of making the finished golf clubs. The other heads represent less than 24 or 28 percent of the cost of the finished golf clubs. The word "AMERICAN" with the sideways triangle is a trademark registered with the U.S. Patent and Trademark Office, and is the property of your company. You also sent us a corporate resolution which states that American Golf Design Inc. assigned the right and title to the trademarks "AMERICAN GOLF DESIGN" and "American" to your company, Apogee Golf, Inc.


Are the imported golf club heads substantially transformed when they are assembled with the U.S. made shafts and grips in the U.S. to make the finished golf clubs?

Does the presence of the word American when used as part of a trademark or a trade name on the clubs exclude them from being excepted from the country of origin marking requirements under 19 U.S.C. 1304? 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.

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

1. Substantial Transformation

As provided at 19 CFR 134.1(b), the country of origin of an article is the country in which it was manufactured, produced, or grown. Further work or material added in another country must effect a substantial transformation in order to render such other country the country of origin. A substantial transformation is said to occur when, after processing, an article emerges having a new name, character, or use. A manufacturer in the U.S. who converts or combines the imported article into a different article will be considered the ultimate purchaser of the imported article within the meaning of 19 U.S.C. 1304, and the article is excepted from country of origin marking. The outermost container of the imported article must be marked in accordance with the requirements of 19 U.S.C. 1304 and Part 134, Customs Regulations. See 19 CFR 134.35.

Here, the issue is whether the assembly of golf clubs from imported club heads effects a substantial transformation of the imported heads, such that your company is the ultimate purchaser of the heads and the imported heads may be excepted from country of origin marking. Customs previously has addressed this very question and answered in the affirmative. In ORR 824-70 (August 24, 1970), we ruled that a manufacturer who purchased imported golf club heads, whether finished or unfinished, and assembled them with shafts and grips of U.S. origin into finished golf clubs, was the ultimate purchaser of the imported heads. Provided Customs officials are satisfied that the imported heads will be used by an original equipment manufacturer, they may be excepted from individual country of origin marking. To the same effect were HQ 728213 (July 3, 1985) and HQ 734136 (June 17, 1991). In each case either the head or the shaft was of U.S. origin. A different conclusion was reached in HQ 734256 (July 1, 1992), where both of the major components of the club, i.e., the head and the shaft, were of foreign origin.

Consistent with these rulings, we find that in this case, the addition of a major U.S. component - the shaft- in the U.S. to produce the completed "AMERICAN GOLF DESIGN" golf club effects a substantial transformation of the imported head. Therefore, your company is the ultimate purchaser of the golf club heads, and pursuant to 19 CFR 134.35 only the outermost containers of the imported heads must be marked to indicate their country of origin. The finished golf club is not required to be marked to indicate the origin of the head. Marking of the outermost containers in which the heads are imported and in which they reach your company would suffice to indicate the country of origin of the heads to the ultimate purchaser as provided at 19 CFR 134.32(d).

2. Application of section 134.36(b), Customs Regulations.

Under previous Customs policy, the presence of the trademark, AMERICAN with the sideways triangle, or the trade name "AMERICAN GOLF DESIGN" would have required that each head be marked in such a manner that the marking will survive processing and be visible to the purchaser of the article after it has been processed in the U.S. As provided under section 134.36(b), Customs Regulations (19 CFR 134.36(b), exceptions from marking "shall not apply to any article or retail container bearing any words, letters, names, or symbols described in sections 134.46 or 134.47 which imply that an article was made or produced in a country other than the actual country of origin." The logo "American Golf Design" which appears on the imported heads is within the class of words or letters so specified. Thus, the golf club heads would not have been eligible for the exceptions provided at 19 CFR 134.35 and 19 CFR 134.32(d).

Recently, however, Customs changed this policy so as to permit the ultimate purchaser to utilize his trademark on an imported article without triggering 19 CFR 134.36(b). In HQ 734327 (February 17, 1993), this office ruled that the trademark "Ray Ban USA" was not misleading to the ultimate purchaser of the imported frames upon which the mark appeared, as the ultimate purchaser (the importer) then substantially transformed the frames by inserting non-prescription lenses into them. We noted that in cases in which the ultimate purchaser is arranging the importation of articles with a trademark affixed, which he owns, there is no risk that the ultimate purchaser will be misled as to the actual country of origin of the imported article. If markings which appear on the substantially transformed articles are misleading to subsequent purchasers of these articles, there may exist other legal remedies beyond the scope of Section 304 of the Tariff Act. Thus, 19 CFR 134.36(b) did not apply to require that the imported frames be individually marked. Accord HQ 734785 (March 17, 1993) (imported fire hydrant castings not misleadingly marked with "Beaumont, Texas" when substantially transformed after importation; 19 CFR 134.36(b) not triggered); HQ 734249 (June 28, 1993), ("Pro USA" logo stamped on imported golf club heads does not trigger requirements of 19 CFR 134.36(b) provided the U.S. processing substantially transforms the heads.)

In this case the imported heads include trademarks owned by your company (the word "American" with a red sideways triangle and the "American Golf Design"). The corporate resolution indicates that your company has acquired the ownership of these trademarks. So long as the ultimate purchaser of the imported heads, your company, is advised of the country of origin of the imported head (e.g., receives the head in a properly marked container), the requirements of 19 CFR 134.36(b) are not triggered and there is no need to individually mark the head with its country of origin.

To be eligible for this exemption from the requirement of individual marking set forth in 19 CFR 134.36(b), the importer must satisfy Customs officials that in all instances the imported golf club heads will be substantially transformed by your company in the U.S.


The above described golf club heads are substantially transformed in the U.S. such that they are excepted from country of origin marking pursuant to 19 CFR 134.35. Marking of the outermost containers in which they reach the ultimate purchaser is sufficient.

The "AMERICAN" with a sideways triangle trademark, or the "AMERICAN GOLF DESIGN" trademark when used in the manner described above, is not misleading to the ultimate purchaser, Apogee Golf, and does not trigger the provisions of 19 CFR 134.36(b). Customs officials must be satisfied that the imported golf club heads will be used by the importer/ultimate purchaser exclusively in the manufacture of golf clubs as described above (i.e. combined with U.S. made shafts) and that they will imported in properly marked containers.


John Durant, Director,
Commercial Rulings Division