OT:RR:CTF:FTM H318556 MD
Ms. Jennifer Diaz
Diaz Trade Law
12700 Biscayne Boulevard, Suite 301
North Miami, Florida 33181
Re: Country of Origin Marking of Electrical Wire Cables
Dear Ms. Diaz,
This is in response to your correspondence, dated May 4, 2021, requesting a binding ruling, on behalf of Repwire LLC ("Repwire" or "Importer"), concerning the country of origin marking of certain electrical wire cables that will be ultimately imported from the Republic of Korea ("South Korea"). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division ("NCSD") for review. Our ruling is set forth below.
FACTS:
The electrical wire cables at-issue in this ruling were previously discussed in two New York Ruling Letters ("NY"), NY N318134, dated March 25, 2021; and NY N318824, dated April 21, 2021. In both NY N318134 and NY N318824, there were five types of electrical wire cables being discussed: "MHF Cables," "SER Cables," "URD Cables," "USE Cables," and "XHHV Cables." According to both NY N318134 and NY N318824, "the manufacturing process for all five cables is virtually identical." This manufacturing process is described as follows. First, "[a]luminum wire [...] is imported into Korea where it is stranded and layed out." This aluminum wire is either of Indian (as was the case in NY N318134) or Australian (as was the case in NY N318824) origin. The aluminum wires are then insulated by a "compound [which] originates from Korea." Afterwards, "[t]he cables are then cut to the desired length and wound on reels prior to [export] to the [United States]."
Regarding the country of origin of the electrical wire cables, both NY N318134 and NY N318824 ultimately held that "the [] originating aluminum wires impart the essential functional component of the finished items." Further, both NY N318134 and NY N318824 note that the "wires are not substantially transformed by the operations performed in Korea into a new and different article of commerce with a name, character, and use distinct from the individual components." As such, the NY rulings concluded that the country of origin of the electrical wire cables was dependent on the origin of the aluminum wires - either India in NY N318134 or Australia in NY N318824.
In your ruling request, you note that "South Korea's customs authorities have taken issue with marking that the cables are of Indian or Australian origin because the cable manufacturing process does occur in South Korea." Furthermore, you enumerate Repwire's "intent[] to move forward with importing the cables from South Korea adhering to CBP's binding ruling that the subject merchandise should be marked according to the country that the aluminum wire is sourced (i.e., India or Australia)" prior to the objections of the Korean authorities. With no dispute into the country of origin of the products at-issue, this ruling will solely address the proposed marking for the electrical wire cables.
ISSUE:
Whether the proposed marking of the electrical wire cables satisfies the country of origin marking requirements set forth in 19 U.S.C. 1304 and 19 C.F.R. Part 134.
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 its 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940) (emphases added).
Part 134, U.S. Customs and Border Protection ("CBP") Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b) defines "country of origin" as:
[T]he 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 transformation in order to render such other country the "country of origin" within the meaning of [the marking regulations]...
A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. M.B.I. Merchandise Industries, Inc. v. United States, 16 C.I.T. 495, 502 (1992) (citing United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267, 270 (C.A.D. 98) (1940)). The question of whether a substantial transformation occurs for marking purposes is a question of fact, to be determined on a case-by-case basis. National Hand Tool Corp. v. United States, 16 C.I.T. 308, 311 (1992) (quoting Uniroyal Inc. United States, 3 C.I.T. 220 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983)).
As discussed above, CBP determined in NY N318134, dated March 25, 2021; and NY N318824, dated April 21, 2021, that the electrical wire cables are products of either India or Australia, dependent on which of the two countries the aluminum wire used to manufacture the product was made. This is because "the [] originating aluminum wires impart the essential functional component of the finished items." Acknowledging these determinations, Repwire "intended to move forward with importing the cables from South Korea adhering to CBP's binding ruling that the subject merchandise should be marked according to the country that the aluminum wire is sourced (i.e., India or Australia)."
However, you state that "South Korea's customs authorities have taken issue with marking that the cables are of Indian or Australian origin because the cable manufacturing process does occur in South Korea." In voicing their concern, the Korean customs authorities suggested "the markings 'Made with Aluminum from India' and 'Made with Aluminum from Australia'" for the subject merchandise. In turn, you suggested a number of alternative markings, which include:
Made with Aluminum from India or Made with Aluminum from Australia
Cables Made in South Korea with Aluminum from India or Cables Made in South Korea with Aluminum from Australia
Cables Made in South Korea with Aluminum Wire from India or Cables Made in South Korea with Aluminum Wire from Australia
Cable Made in South Korea with Indian Wire or Cables Made in South Korea with Australian Wire
Upon review, we find that each of the above markings would not satisfy requirements of 19 U.S.C. 1304. CBP's rulings in NY N318134 and NY N318824 were explicit; the electrical wire cables are products of either India or Australia. CBP reached this conclusion through a substantial transformation analysis; finding that the aluminum wire imparts the essential character of the finished electrical wire cables, that these aluminum wires are either products of India or Australia, and that the further processing of the aluminum wires into the finished electrical wire cables does not substantially transform them. As a result, the electrical wire cables retain the country of origin of where the aluminum wires they were constructed from were sourced - either India or Australia - and must be marked as such to satisfy 19 U.S.C. 1304.
None of the above marking proposals indicate that the country of origin of the products is either India or Australia; thus, they are not acceptable. The first set, which simply refers to the origin of the aluminum is not acceptable as it does not refer to where the final product was made. Although the aluminum wires impart the essential character that is retained by the electrical wire cables, merely marking the origin of these wires does not explicitly inform the consumer of where the electrical wire cables were made. The remaining sets are not acceptable for their inclusion of a simple and incorrect phrase - Made in South Korea. As discussed above, as well as in NY N318134 and NY N318824, the electrical wire cables are not products of South Korea. Rather, the electrical wire cables are products of either India or Australia. As such, to mark them a "made" in any country other than India or Australia is not acceptable as such marking does not indicate the country of origin of imported products in accordance with 19 U.S.C. 1304.
In support of your proposed marking, you cite to a number of CBP rulings, and the markings contained therein. Specifically, you elaborate on NY N018311, dated November 2, 2007, which concerned the country of origin marking of imported toner cartridges; and HQ 733729, dated January 2, 1991, which concerned the country of origin marking of flavored teas. In NY N018311, CBP found that the proposed marking of imported toner cartridges to indicate the toner is "Made in Japan" and the finished cartridge is "Made in China", was unacceptable because such marking failed to clearly identify the country of origin of the finished good. In response, CBP noted that it "would not object to wording that the toner is of Japanese origin" so long as this was alongside the "Made in China" marking. This was because, although the manufacturing process contained certain Japanese components, including toner, these components were then combined with Chinese-origin components on the Chinese mainland - resulting in a substantial transformation of the Japanese components into a finished toner cartridge of Chinese origin. In HQ 733729, CBP noted that the marking of a tin containing teas as "'packed in Singapore... from teas grown and flavo[]red in Sri Lanka' [was] an acceptable marking of origin." In doing so, CBP rejected a marking "[f]rom teas grown in Sri Lanka/Product of Singapore." You assert that both of these allowed markings support your proposed markings. We disagree.
19 U.S.C. 1304 requires "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 its 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." Both NY N018311 and HQ 733729 abide by this. In NY N018311, there was found to be a substantial transformation of Japanese components - toner ink - into a product of Chinese origin - a toner cartridge. As such, CBP required that the final product be marked as "Made in China." In doing so, CBP did not object to a marking of the toner contained within the finished cartridge as Japanese, so long as it appeared alongside the approved "Made in China" mark. In HQ 733729, CBP rejected a proposed mark reading "[f]rom leaves grown in Sri Lanka/Product of Singapore" because the term "product of' (referring to packing in Singapore) "is reserved under 19 C.F.R. Part 134 for designations of origin, and as stated above, the country of origin of the teas is Sri Lanka."
Here, the country of origin of the electrical wire cables is either India or Australia. As such, the electrical wire cables must be marked to indicate clearly and explicitly the countries of origin as either India or Australia. None of the proposed marks contain either phrase indicating proper origin. Instead, they read "Made in South Korea." As noted in HQ 733729, "this marking fails to clearly indicate the [electrical wire cables'] country of origin to the ultimate purchaser in the U.S. as required under 19 U.S.C. 1304." As such, to comply with the marking requirements, the words "Made in" cannot be followed by a reference to South Korea, since South Korea is not the country of origin of electrical cable wires for marking purposes. Moreover, if the name "South Korea" remains on the article, the words "Made in" or "Product of" or words of similar meaning must appear in reference to the name "India" or "Australia" so as to clearly indicate the country of origin of the electrical wire cables.
Concerning non-origin references, section 134.46 requires that, in instances where the name of any city or locality in the United States, or the name of any foreign country or locality other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, and those words or name may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. See 19 C.F.R. 134.46. The requirements of 19 C.F.R. 134.46 are designed to alleviate the possibility of misleading an ultimate purchaser with regard to the country of origin of an imported article, if such article or its container includes language which may suggest a U.S. origin (or other foreign locality not the correct country of origin).
Acceptable marking alternatives include "Made in India, Further Processed in South Korea" and "Made in Australia, Further Processed in South Korea." Such markings would conform with 19 U.S.C. 1304 and 19 C.F.R. 134.46, indicating the proper country of origin of the electrical wire cables (India or Australia) while further processed in South Korea. See HQ 563045, dated August 9, 2005 (stating that CBP would not object to an indication that the cells are made in Japan, and further processed in China, such that the proposed marking would be acceptable); see also HQ 561878, dated March 22, 2002 (CBP found that textile bows could be marked either "Made in Taiwan, Finished in China," or "Product of Taiwan, Tied in China," to conform with 19 U.S.C. 1304 and 19 C.F.R. 134.46. Such marking indicated that the product was of Taiwanese origin, while also allowing the importer to disclose the Chinese processing performed on the bows).
HOLDING:
Accordingly, your proposed country of origin marking is not in compliance with the requirements set forth in 19 U.S.C. 1304 and 19 C.F.R. Part 134. We reiterate that the electrical wire cables must be marked as "Made in India" and/or "Made in Australia" - as these are the countries of origin of the electrical wire cables. Acceptable marking alternatives, while incorporate the requisite "Made in India" and/or "Made in Australia" marks are "Made in India, Further Processed in South Korea" and "Made in Australia, Further Processed in South Korea."
Sincerely,
Yuliya A. Gulis, Chief
Food, Textiles and Marking Branch
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