MAR-2-05 CO:R:C:S 735537 DEC
Ms. Lisa Levaggi Borter
Adduci, Mastriani, Schaumberg & Schill
330 Madison Avenue - 39th Floor
New York, New York 10017
RE: Country of origin marking for Serengeti sunglasses;
Substantial
transformation; HRL 733654; HRL 733655; HRL 731757; 19
C.F.R.
134.35(a)
Dear Madam:
This is in response to your letter dated January 10, 1994,
on behalf of your client, Serengeti Eyewear, a division of
Corning Incorporated, requesting a ruling on the country of
origin marking requirements for sunglasses.
FACTS:
Serengeti Eyewear ("Serengeti"), a division of Corning
Incorporated, has submitted various samples of sunglasses and
sunglass lenses. Serengeti requests a country of origin ruling
with respect to four variations of production scenarios. The
first scenario will entail United States lens blanks that will be
exported to Japan for further processing and assembly into
frames. While the lenses are in Japan, they will be ground and
polished. In addition, the lenses will undergo a proprietary
firing process and finishing operations which include cutting,
edging, tempering, and vacuum coating with an anti-reflective
substance. The lenses will be inserted into frames which are
made in either Japan, France, Italy, or Hong Kong prior to being
imported into the United States.
The second scenario will entail United States made glass
"fronts" (lens blanks that have been ground, polished, and fired)
that will be sent to France to be manufactured into Strata
polarizing lenses through a series of processes involving
cutting, edging, tempering and vacuum coating with an anti-reflective substance. These lenses will be inserted into
Japanese frames in France and then imported into the United
States.
The third scenario will involve the assembly of finished
sunglasses in the United States from imported components. United
States lens blanks will be sent to Japan for grinding, polishing,
and a proprietary firing process. The lenses will be returned to
the United States for finishing operations which include cutting,
edging, tempering, and vacuum coating. Finally, the lenses will
be inserted into their respective frames which will be products
of France, Italy, or Hong Kong.
The fourth scenario will entail the completion of the
sunglasses in the United States. The frames will be the product
of either France, Italy, or Hong Kong and imported into the
United States for assembly into finished sunglasses. The United
States manufactured lens blanks will be sent to Japan for
grinding and polishing. Once returned to the United States, the
lenses will undergo the proprietary firing process as well as the
cutting, edging, tempering, and vacuum coating operations.
Finally, the lenses will be inserted into the various imported
frames.
ISSUE:
1. What are the proper country of origin marking
requirements for the finished sunglasses that are assembled
abroad (first and second scenarios)?
2. What are the country of origin marking requirements for
imported lenses and frames which are to be assembled in the
United States into finished sunglasses (third and fourth
scenarios)?
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 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.
Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the Customs Regulations implements the country
of origin marking requirements and exceptions of 19 U.S.C. 1304.
Section 134.41(b), mandates that the ultimate purchaser in the
United States must be able to find the marking easily and read it
without strain.
Section 134.1(d), Customs Regulations, provides that the
"ultimate purchaser" of an imported article is generally the last
person in the U.S. to receive the article in the form in which it
was imported. In addition, that section provides that a
manufacturer may be the ultimate purchaser of an imported United
States article if he subjects it to a process which results in a
substantial transformation of the article.
"Country of origin" is defined in section 134.1(b), Customs
Regulations, 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
transforma-
tion in order to render such other country the "country
of origin" within the meaning of this part.
A substantial transformation is said to have occurred when an
article emerges from a manufacturing process with a name,
character, or use which differs from the original material
subjected to the process. Torrington Co. v. United States, 764
F.2d 1563, 1568 (Fed. Cir. 1985), citing Texas Instruments, Inc.
v. United States, 631 F.2d 778, 782 (C.C.P.A. 1982), and
Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556
(1908).
Customs has previously determined that unlike prescription
eyewear where ultimate purchasers make a separate purchasing
decision regarding the frames alone, purchasers of over-the-counter sunglasses make their decision while inspecting frames
and lenses already combined. Headquarters Ruling Letter ("HRL")
731757, dated February 23, 1990. Customs has ruled that the
insertion of U.S.-origin non-prescription lenses into sunglass
frames that were assembled in Mexico from U.S. components
constitutes a substantial transformation. The frames which were
combined with the lenses in the United States are known as
sunglasses. This finished article is a new article of commerce
with a different name, a very specific use, and a change in
character from the frames alone. HRL 733654, dated October 29,
1990.
The first process that Serengeti presents, involving United
States sunglass lens blanks which are to be shipped to Japan for
further processing and inserted into sunglass frames, constitutes
a substantial transformation. Consequently, the country of
origin of these articles will be Japan and when imported they
must be marked accordingly.
Similarly, the second process Serengeti presents entails the
insertion of United States finished sunglass lenses into sunglass
frames in France after further processing of the lens fronts (the
lenses that have been ground, polished, and fired). In this
case, the country of origin of these articles will be France, and
therefore, when imported, they must be marked accordingly.
The third situation which Serengeti presents involves United
States manufactured lens blanks being sent to Japan to be
grounded, polished, and fired. The lenses are then to be
returned to the United States for further processing and assembly
into frames from France, Hong Kong, or Italy. Similarly, the
fourth situation presented involves United States manufactured
lens blanks being sent to Japan to be grounded and polished. The
lenses are then to be returned to the United States for firing,
further processing, and assembly into frames imported from
various countries.
Section 134.35, Customs Regulations (19 C.F.R. 134.35(a)),
states that
the manufacturer or processor in the United States who
converts or combines the imported article into the dif-
ferent article will be considered the "ultimate
purchas-
er" of the imported article within the contemplation of
section 304(a), Tariff Act of 1930, as amended (19
U.S.C.
1304(a)), and the article shall be excepted from
marking.
The outermost containers of the imported articles shall
be
marked in accord with this part.
Customs has concluded that the combining of non-prescription
sunglass lenses and frames after further processing of either the
lenses or frames results in a substantial transformation. See
HRL 731757, HRL 733654, and HRL 733655, dated November 1, 1990.
Therefore, Serengeti, who will assemble the lenses and frames in
the United States, will be the ultimate purchaser of the sunglass
component parts. Consequently, section 134.35(a) is applicable
and the lenses and frames would be excepted from individual
country of origin marking. The outermost containers of the
imported components must be properly marked with their respective
countries of origin.
HOLDING:
1. The sunglasses will undergo a substantial transformation
in the country in which the lenses are further processed and
inserted into the frames. Therefore, in regard to the first
scenario, the finished sunglasses must be marked to indicate
Japan as the country of origin, while in the second scenario, the
glasses must be marked to indicate France as the country of
origin.
2. Since the imported lenses and frames described in the
third and forth scenarios will undergo a substantial
transformation in the United States, Serengeti will be the
ultimate purchaser and the articles are excepted from country of
origin marking. Customs will require that the outermost
containers in which these component parts are imported to be
marked with their respective country of origin.
Sincerely,
John Durant
Director, Commercial Rulings Division