MAR-2-05 RR:CR:SM 560615 RSD
Sidney H. Kuflik, Esq.
Lamb & Lerch
233 Broadway
51st Floor
New York, New York 10279
RE: Country of origin marking for brass balancing valve bodies
imported from Canada; 19 U.S.C. 1304; 19 CFR 134.1; NAFTA
Marking Rules; 19 CFR Part 102; 19 CFR 134.35(b); simple
assembly
Dear Mr. Kuflik:
This is in response to your letter dated August 14, 1997, on
behalf of Taco, Inc. (hereinafter Taco) requesting a ruling on
the country of origin marking requirements for brass balancing
valve bodies imported from Canada that will be used to make a
brass balancing valve in the United States. A copy of a brochure
explaining the product was enclosed along with your letter. Your
request for confidentiality of the cost information bracketed in
your ruling request has been granted.
FACTS:
You state in your letter that Taco is involved in pump
manufacturing and the pump resale business. Taco manufactures a
brass balancing valve in the United States known as the "Taco
Accu-Flo". There are 13 separate components in the "Taco Accu-Flo", of which 12 are made in the United States. The 13th
component, the valve body, is produced in Canada, and it is the
most expensive of the components.
To make the valve bodies, brass rods originating in the
United States are shipped to Canada. In Canada, the brass rods
are forged and machined into the valve bodies. The valve bodies
are then shipped to Taco in the United States. Taco combines the
valve body with the 12 other components to produce the finished
brass valve known as the Taco Accu-Flo. You have provided a list
of the 13 components and their respective costs. The components
are as follows:
1. Valve body
2. "O" ring
3. Plug, Head Hex socket
4. Stem
5. Indicator
6. Stop, Memory
7. Nameplate
8. Bushing, Seat
9. Seat
10. Ball
11. Valve
12. Plug, Pipe
13. Screw Cap
You request a binding ruling on the marking requirements for
the imported brass valve bodies produced in Canada.
Specifically, you contend that the imported valve bodies are
excepted from country of origin marking pursuant to section
134.35 Customs Regulations
(19 CFR 134.35).
ISSUE:
What are the country of origin marking requirements for the
brass valve body made in Canada and used in the U.S. to make a
finished brass valve?
LAW AND ANALYSIS:
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, every
article of foreign origin (or its container) 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. Part 134, Customs Regulations (19 CFR Part 134),
implements the country of origin marking requirements and
exceptions of 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 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
this part;
however for a good of a NAFTA country, the NAFTA
Marking
Rules will determine the country of origin. (Emphasis
added).
Pursuant to section 134.35(b), Customs Regulations (19 CFR
134.35(b)), goods of a NAFTA country are excepted from marking
if they are to be processed in the U.S. in a manner that would
result in the good becoming a good of the U.S. under the NAFTA
Marking Rules. That is, if an article undergoes processing after
its importation so as to become a good of the U.S., it will not
have to be marked. Furthermore, if such a good is processed by
the importer or on its behalf, its outermost container is
excepted from marking as well. Id.
The country of origin marking requirements for a "good of a
NAFTA country" are determined in accordance with Annex 311 of the
North American Free Trade Agreement ("NAFTA"), as implemented by
section 207 of the North American Free Trade Agreement
Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (December 8,
1993). Section 134.1(g), Customs Regulations (19 CFR 134.1(g)),
defines a "good of a NAFTA country" as an article for which the
country of origin is Canada, Mexico, or the U.S. as determined
under the NAFTA Marking Rules set out at Part 102, Customs
Regulations (19 CFR Part 102).
Section 102.11, Customs Regulations (19 CFR 102.11), sets
forth the required hierarchy for determining whether a good is a
good of a NAFTA country for marking purposes. That section
states that the country of origin of a good is the country in
which:
(1)The good is wholly obtained or produced;
(2)The good is produced exclusively from domestic
materials; or
(3)Each foreign material incorporated in that good
undergoes an
applicable change in tariff classification set out in
section 102.20
and satisfies any other applicable requirements of that
section, and
all other applicable requirements of these rules are
satisfied.
"Foreign material" is defined in section 102.1(e), Customs
Regulations (19 CFR 102.1(e)), as "a material whose country of
origin as determined under these rules is not the same country as
the country in which the good is produced."
First, we must determine the country of origin of the
imported valve bodies, which you indicate are processed in Canada
from U.S. made rods of brass. Because the brass valve bodies are
made with U.S. materials, they are neither wholly obtained or
produced, nor produced in Canada exclusively from domestic
materials as those terms are defined under section 102.1, Customs
Regulations (19 CFR 102.1). Accordingly, section 102.11(a)(3),
Customs Regulations (19 CFR 102.11(a)(3)), is the applicable
rule that must be applied to determine the origin of the valve
bodies.
Pursuant to section 102.11(a)(3), the country of origin of
a good is the country in which each foreign material incorporated
in that good undergoes an applicable change in tariff
classification set out in section 102.20, Customs Regulations (19
CFR 102.20). Section 102.20
sets forth the specific tariff classification changes and/or
other operations which are specifically required for the country
of origin to be determined on the basis of operations performed
on the foreign materials contained in a good.
You state that the valve bodies are classified in subheading
8481.90, HTSUS. We will assume for the purposes of this ruling
that this classification is correct. The applicable rule under
19 CFR 102.20(o) section XVI, Chapters 84 through 85 is as
follows:
8481.90 --- A change to subheading 8481.90 from any
other heading
You further indicate that the rods of brass, which are
processed into the valve bodies, would be classified under
subheading 7407.21, HTSUS. Therefore, the brass rods undergo the
applicable tariff shift under 19 CFR 102.20, when they are
processed in Canada to make the valve body. Accordingly, the
valve bodies are a product of Canada.
Next, we determine the country of origin of the finished
valves. Since the valve bodies are made in Canada, the finished
valves are neither wholly obtained or produced, nor produced
exclusively from domestic materials as those terms are defined
under section 102.1, Customs Regulations (19 CFR 102.1).
Accordingly, in determining the country of origin of the valves,
section 102.11(a)(3), Customs Regulations (19 CFR 102.11(a)(3)),
is the rule that must be applied.
You also state that the finished brass valve is classifiable
under subheading 8481.30.10, HTSUS as
Tap, cocks, valves and similar
appliances, for pipes, boiler shells,
tanks, vats or the like including
pressure-reducing valves and
thermostatically controlled valves;
parts thereof.
As previously noted, the valve bodies are classifiable under
subheading 8481.90.10 HTSUS.
For the finished valves classified in subheading 8481.30.10
HTSUS, the applicable change in tariff classification set out in
section 102.20(o), Section XVI, Chapters 84 through 85, provides:
A change to subheading 8481.10 through
8481.80 from any other heading, or from
subheading 8481.90 except when resulting from
a simple assembly.
Accordingly, under the above rule, there are two alternative
bases by which an article may undergo a tariff shift. In
applying the first part of the rule, we note that the imported
valve bodies do not undergo the applicable tariff shift because
they do not change headings at the four digit
level, since both the valve bodies and the finished valves are
classified under heading 8481, HTSUS. However, the valve bodies
classified in subheading 8481.90 will meet the alternative
provision in the tariff shift rule if the finished valves are
produced other than by a simple assembly.
19 CFR 102.1(o) defines simple assembly as follows:
Simple assembly means the fitting together of
five or fewer parts all which are foreign
(excluding fasteners such as screws, bolts,
etc.) by bolting, gluing, soldering, sewing
or by other means without more than minor
processing.
The production of the finished valves does not fall within
this definition of a simple assembly because it involves 13
parts, of which 12 are of United States origin. Therefore the
alternative test of the tariff shift rule is satisfied because
the valve bodies change classification in the United States from
subheading 8481.90 to subheading 8481.30.10 through processing
other than a simple assembly. Accordingly, the country of origin
of the finished valve is the United States.
Under 19 CFR134.35(b), because the valve body is a good of a
NAFTA country, which is processed in the United States in a
manner which results in the good becoming a good of the United
States under the NAFTA marking rules, it is excepted from the
country of origin marking
requirements of 19 U.S.C. 1304. In addition, because the
importer, Taco, will process the valve bodies into the valves,
the outermost containers in which the valve bodies are imported
also do not have to be marked.
HOLDING:
Based on the information provided, the country of origin of
the finished valve, assembled in the U.S. with a valve body
produced in Canada and various U.S. components, is the United
States. Therefore, in accordance with 19 CFR 134.35(b), the
finished valve bodies and the outermost containers in which the
valve bodies are imported are excepted from marking.
A copy of this ruling letter should be attached to the entry
documents filed at the time the goods are entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division