MAR-05 CO:R:C:V 735576 RSD
Mr. Anthony Martorano
Director, Materials Management
Longines Wittnauer Watch Company
New Rochelle, New York 10802
RE: Country of origin marking for watch dials which will be
incorporated in a finished watch; watch movements;
misleading markings; substantial transformation; 19 CFR
134.35;
Dear Mr. Martorano:
This is response to your letter dated April 20, 1994,
concerning the country of origin marking of imported watch dials
which will be incorporated into a finished watch in Puerto Rico.
We have also received a letter from Longines Wittnauer's facility
in Puerto Rico in which samples of a watch dial, a watch movement,
and a finished watch were enclosed. As requested, these samples
will be returned to Longines Wittnauer facility in Puerto Rico
under a separate cover.
FACTS:
The Longines-Wittnauer Watch Company (Longines) manufactures
and sells watches. It has watch manufacturing facilities in Puerto
Rico and the U.S. Virgin Islands. To manufacture the watches in
question, Longines uses watch movements made in Switzerland and
dials made in Taiwan. Although you indicate in your letter that
the dials are made in Taiwan, the sample watch dial is marked on
the back with the country name "Thailand". The dials are also
marked in the front with the word "Swiss". The dials are assembled
onto the movements as part of the process of making the finished
watches. The Swiss watch movement will be encased by Longines at
its facility in Puerto Rico to make a finished watch. When the
watch is complete, the Thailand or Taiwan marking printed on the
back of the dial will not be visible. The word "Swiss" on the
front of the dial remains visible on the finished watch.
You write that Longines is having some difficulty in clearing
shipments of watch dials from Taiwan through Customs in Anchorage,
Alaska because the word "Taiwan" is printed on the back of the
dials and the word "Swiss" is on the front of the dials.
ISSUE:
Does it violate the country of origin marking law if the word
"Taiwan" or "Thailand" is printed on the back of watch dials which
will be assembled onto Swiss made watch movements, if those country
references will not be visible after the watch is completed and the
watch is marked "SWISS" to indicate that its country of origin is
Switzerland?
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 a 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). C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements
the country of origin marking requirements and exceptions of 19
U.S.C. 1304. As provided in section 134.41(b), Customs Regulations
(19 CFR 134.41(b)), the country of origin marking is considered
conspicuous if the ultimate purchaser in the U.S, is able to find
the marking easily and read it without strain.
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 the marking laws and
regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27
C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in
manufacture which results in an article having a name, character,
or use differing from that of the constituent article will be
considered substantially transformed. In such circumstances, the
imported article is excepted from marking. The outermost
containers of the imported articles shall be marked. (See 19 CFR
134.35).
For country of origin marking purposes under 19 U.S.C. 1304,
Customs considers the country of origin of watches to be the
country of manufacture of the watch movements. See HQ 731546
(October 27, 1988). Customs has also ruled that when unassembled
parts of a watch movement from one country are assembled in a
second country, the country of assembly is the country of origin
for marking purposes under 19 U.S.C. 1304. See HQ 708386 (May 2,
1978).
In this case the imported watch dials have two country of
origin markings. The first marking, printed on the back of the
dials, "Taiwan" or "Thailand", refers to the country where the dial
is made. The second marking, "Swiss", refers to the country of
origin of the movement on which the dial will be assembled. Under
Customs policy regarding watches, the country of origin of the
finished watch is the country where the movement is made, i.e.
Switzerland. Therefore, the imported watch dials will be
substantially transformed when they are combined with the Swiss
movements.
Although the dials are marked with their own country of
origin, which is different than that of the finished watches, we
find that in this situation, these markings do not present a
problem because they do not violate 19 U.S.C. 1304. We first
assume for the purpose of this ruling that these markings
accurately reflect the origin of the watch dials. Significantly,
the Taiwan or Thailand markings are on the back of dials and will
not be visible once the watch is fully assembled. Since the origin
marking regarding the dial is concealed on the completed watch,
there is no chance that the ultimate purchaser of the watch will
be misled as to the origin of the watch by this marking. It is
also proper to have the word "Swiss" on the front of the watch dial
so that the origin of the fully assembled watch can be indicated.
We note that this scenario is acceptable only if the Customs
officials at the port of entry are satisfied that the dials will
be assembled exclusively onto Swiss made movements and will not be
resold separately.
You should also be advised that Customs is in process of
preparing a Federal Register notice which will outline proposed
standards and the appropriate methods for conspicuous and legible
country of origin marking on watches.
This ruling does not address the special marking requirements
for watches indicated in U.S. Note 4 of Chapter 91 of the
Harmonized Tariff Schedule of the United States (HTSUSA) 19 U.S.C.
1202.
HOLDING:
Having two origin markings on the watch dials, one concerning
the origin of the dials and another concerning the origin of the
finished watch, does not violate 19 U.S.C. 1304, so long as the
country of origin the dial is on the back and will not be visible
to the ultimate purchaser on the finished watch, and the finished
watch is otherwise marked with its correct country of origin.
Sincerely,
John Durant, Director