MAR-2-05 CO:R:C:V 731963 KG
Howard Shube
Shube's Manufacturing, Inc.
2010 Ridgecrest Drive, S.E.
Albuquerque, New Mexico 87108
RE: Country of origin marking requirements for silver jewelry
Dear Mr. Shube:
This is in response to your letter of December 2, 1988,
requesting a ruling on the country of origin marking requirements
for silver jewelry. We regret the delay in responding to your
inquiry.
FACTS:
You propose to import silver earrings and rings from
Thailand and have the items hand-faceted in the U.S. Hand-
faceting is a process where a worker using a high-speed rotating
wheel which is tipped with a very small diamond, takes each
individual piece and cuts away small pieces of the silver in
order to create individual facets in the silver. This process
gives a jewel-like luster to each individual facet. Each piece
has between 10 and 40 or more individually cut facets. The
pieces are then lacquered with a clear acrylic lacquer to
preserve their finish.
You have submitted examples of 4 styles of rings both before
and after the rings are hand-faceted.
ISSUE:
Whether silver jewelry imported from Thailand and hand-
faceted in the U.S. is required pursuant to 19 U.S.C. 1304 to be
marked with its 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. The term "country of origin" as used in 19 CFR Part
134 is defined in 19 CFR 134.1(b), Customs Regulations (19 CFR
134.1(b)), as the country of manufacture, production, or growth
of any article of foreign origin entering the U.S. 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.
A substantial transformation occurs when articles lose their
identity and become new articles having a new name, character or
use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270
(1940). Ruling HQ 555105 (October 31, 1988), cited in your
letter, discusses whether the faceting operation for pewter
satisfies the "further processing" requirement imposed under item
806.30, Tariff Schedules of the United States (now subheading
9802.00.60, Harmonized Tariff Schedule of the United States) for
tariff classification purposes and does not address the question
of whether or not the faceting satisfies the substantial
transformation test enunciated in U.S. v. Gibson-Thomsen Co.
Satisfaction of a statutory requirement imposed for tariff
purposes is not a determinative factor in considering whether or
not an imported article has been substantially transformed. Only
an examination of the imported article and its manufacturing
process to ascertain whether the imported article has been
substantially transformed into a new article having a new name,
character or use will determine whether or not the article has
been substantially transformed for the purposes of country of
origin marking.
Based upon our examination of the samples, we are of the
opinion that the hand-faceting process does not result in a
change of name or use of the jewelry. The rings, in their
imported condition, are wearable by a retail consumer without any
further processing and have the same use as the hand-faceted
ring. Therefore, the hand-faceting process must change the
character of the imported article to render a substantial
transformation. In Koru North America v. U.S., 12 CIT ___, 701
F. Supp. 229 (CIT 1988), the Court of International Trade held
that fish processed into frozen fish fillets were substantially
transformed. The Court looked closely at the character of the
fish both before and after processing. Important factors
considered were: the appearance and shape of both products; sale
in separate markets; an increase in shelf life and a difference
in tariff classification.
The hand-faceted ring does have a different appearance and a
slightly different shape than the imported ring of the same
style. However, the style of the ring does not change and as
stated above, the imported ring is wearable and could be sold in
the same market as the hand-faceted ring. Further, there is no
change in character apart from the cosmetic change in appearance.
There was not enough information submitted about the silver
content of the rings to determine the tariff classification of
the imported article or the hand-faceted article.
The cosmetic difference in appearance in and of itself is
not significant enough to substantiate a finding of a change in
character upon which to base a finding of substantial
transformation. After careful consideration of the facts, we are
of the opinion that the imported ring is not substantially
transformed by the hand-faceting process. Therefore, the
importer is required by 19 U.S.C. 1304 and 19 CFR Part 134 to
mark the rings to indicate that the country of origin is
Thailand.
HOLDING:
The imported rings are not substantially transformed by the
hand-faceting process which merely changes the cosmetic
appearance of the rings. The importer is required by 19 U.S.C.
1304 and 19 CFR Part 134 to mark the rings to indicate that the
country of origin is Thailand.
Sincerely,
John Durant
Director,
Commercial Rulings Division