MAR-2-05 CO:R:C:V 733655 KG
Anthony D. Padgett, Esq.
Thelen, Marrin, Johnson & Bridges
805 15th Street, N.W.
Washington, D.C. 20005-3000
RE: Country of origin marking of imported non-prescription
sunglasses; eyeglasses; substantial transformation
Dear Mr. Padgett:
This is in response to your letters of November 30, 1989,
February 5, June 12, and August 3, 1990, requesting a country of
origin ruling on behalf of your client regarding imported
sunglasses. In HQ 555595 (May 21, 1990), addressed to Mr. John
Mayo McKeown, Customs ruled on the applicability of subheading
9802.00.80 of the Harmonized Tariff Schedule of the United States
("HTSUS") to these items. You also requested a ruling on two
other styles of sunglasses which will be addressed in separate
letters. We regret the delay in responding to your inquiry.
FACTS:
You have submitted samples of sunglass components. The
components are leather-wrapped wire frame temples and fronts
which are made in the U.S. The leather which is wrapped around
the components originates in Canada. The leather, the temples,
the fronts and acetone are shipped from the U.S. to Mexico for
further processing.
Your client has contracted with a Mexican company to perform
processing according to your client's specifications. Your
client is in direct contact with the Mexican company. The
following operations will be performed in Mexico: the leather,
which is already folded and stitched on one end when exported to
Mexico on rolls, is cut to length and width; glue is placed on
the reverse side of the leather and activated with acetone; the
leather is glued onto the plastic portion of the temple and any
excess is removed by cutting. The fronts are also covered with
leather in a similar manner. Finally, the lower part of the
leather-wrapped temple is bent to fit around the wearer's ear.
In a second scenario, this bending is done in the U.S.
rather than in Mexico. The leather-wrapped temples and frames
are then shipped back to the U.S. for assembly and insertion of
non-prescription U.S.-made lenses.
ISSUE:
What is the proper country of origin marking of the imported
non-prescription sunglass frames under either scenario?
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. 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 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.
Section 134.35, Customs Regulations (19 CFR 134.35), states
that the manufacturer or processor in the U.S. who converts or
combines the imported article into a different article having a
new name, character or use will be considered the ultimate
purchaser of the imported article within the contemplation of
section 304(a) of the Tariff Act of 1930, as amended, and the
article shall be excepted from marking. The outermost
containers of the imported articles shall be marked.
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), National Juice Products Association v. United States, 10
CIT 48, 628 F.Supp. 978 (CIT 1986), Koru North America v. United
States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988).
Section 10.22, Customs Regulations (19 CFR 10.22), states
that assembled articles entitled to the duty exemption under
HTSUS subheading 9802.00.80 are considered products of the
country of assembly for the purposes of country of origin
marking. If an imported assembled article is made entirely of
American-made materials, the United States origin of the material
may be disclosed by using a legend such as "Assembled in ____
from material of U.S. origin," or a similar phrase.
Treasury Decision 74-38, dated January 14, 1974, addressed
the issue of what method should be used to mark sunglass frames
but did not describe the factual settings in which marking would
be required.
I. Leather-wrapped temples which are bent to fit the
wearer's ear in Mexico
Customs ruled in HQ 555595 (May 21, 1990), that the leather-
wrapped temples which are bent to fit around the wearer's ear
are not entitled to the partial duty exemption under HTSUS
subheading 9802.00.80. Therefore, 19 CFR 10.22 is not
applicable to these components.
In this scenario, the wire temples which are exported to
Mexico already have their final shape and would be useable
sunglass components except for the bending. Samples of bent and
unbent temples were submitted; the physical appearance of the
bent and unbent temples is not significantly different. Further,
no evidence was submitted that the bending is a complex, costly
or time-consuming procedure which requires any great deal of
skill. The bending appears to be a very simple processing which
could be done at a rapid pace by unskilled laborers.
Essentially, the bending operation appears to be a mere finishing
operation. The temples do not undergo a change in name or use as
a result of the bending. The only change in character that
occurs is the bending, which is not a fundamental change in
character. The bending of the temples does not constitute a
substantial transformation.
The leather-wrapping process performed in Mexico is merely
decorative and does not change the name, character or use of the
sunglass components. In HQ 729308 (August 12, 1988), Customs
ruled that U.S.-made earrings exported to Canada to be painted a
solid color were not substantially transformed. This ruling was
based in part, on the fact that the painting was a minor
finishing operation which leaves the fundamental identity of the
earrings intact. In this case, the components are not even
assembled into sunglass frames; assembly occurs in the U.S.
These sunglass components are not substantially transformed in
Mexico. Since these sunglass components are neither entitled to
the partial duty exemption under HTSUS subheading 9802.00.80
nor substantially transformed in Mexico, they would be excepted
from marking in accordance with 19 CFR 134.32(m).
II. Leather-wrapped wire fronts and temples which are bent to
fit the wearer's ear in the U.S.
HQ 555595 suggests that the process of applying the leather
to the wire temples and fronts would be an acceptable assembly
operation under 19 CFR 10.16(a). Although the leather is a
product of Canada, the wire fronts and temples are products of
the U.S. Therefore, the wire-wrapped temples which are bent to
fit the wearer's ear in the U.S. and the fronts may be entitled
to the partial duty exemption under HTSUS subheading 9802.00.80.
If the wire-wrapped temples which are bent to fit the wearer's
ear in the U.S. and the fronts are entitled to the partial duty
exemption under HTSUS subheading 9802.00.80, pursuant to 19 CFR
10.22, Mexico would be considered the country of origin of these
temples and fronts.
In HQ 733654 (October 29, 1990), Customs concluded that non-
prescription sunglass components which were shipped to the U.S.
for assembly of the frame and the insertion of U.S.-made lenses,
were substantially transformed when assembled into sunglasses in
the U.S. This fact pattern is identical to that case and we
conclude that the wire-wrapped temples which are bent in the U.S.
and the fronts are considered substantially transformed in the
U.S. In accordance with 19 CFR 134.35, the U.S. manufacturer is
the ultimate purchaser of the imported sunglass components.
An exception from marking is provided in 19 U.S.C.
1304(a)(3)(H) and 19 CFR 134.32(h) where an ultimate purchaser,
by reason of the character of the article or by reason of the
circumstances of its importation, must necessarily know the
country of origin of the article even though it is not marked to
indicate its origin. In ruling HQ 730243 (March 5, 1987),
Customs required that the importer must be the ultimate purchaser
of the imported article and have direct contact with the foreign
supplier to qualify for the 19 U.S.C. 1304 (a)(3)(H) exemption.
In this case, the U.S. manufacturer has a contractual
relationship directly with the Mexican supplier whereby the U.S.
manufacturer sends the temples and fronts to Mexico for
processing under its supervision according to its specifications
and re-imports the sunglass components. The U.S. manufacturer in
this case deals directly with the Mexican company that is
processing the sunglass components. Therefore, the sunglass
components are entitled to the exemption from marking set forth
at 19 U.S.C. 1304(a)(3)(H) and 19 CFR 134.32(h).
HOLDING:
The leather-wrapped temples which are bent to fit the
wearer's ear in Mexico are exempt from country of origin marking
pursuant to 19 CFR 134.32(m).
The leather-wrapped fronts and temples which are bent to
fit the wearer's ear in the U.S. are excepted from country of
origin marking requirements under 19 U.S.C. 1304(a)(3)(H) and 19
CFR 134.32(h).
Sincerely,
Marvin M. Amernick
Chief, Value, Special Programs
and Admissibility Branch
cc: District Director
Laredo, Texas