Kristen S. Smith, Esq.
Deborah Stern, Esq.
Sandler, Travis & Rosenberg, P.A.
Attorneys at Law
1300 Pennsylvania Avenue, N.W., Suite 400
Washington, DC 20004-30652
RE: THE COUNTRY OF ORIGIN MARKING OF A WOODEN HEADBOARD
Dear Ms. Smith and Ms. Stern:
This is in response to your letter received by the National Import Specialist Division on July 30, 2012, requesting a ruling on the country of origin of a finished headboard that has undergone processing operations in Taiwan using unfinished wood pieces of Chinese origin. This ruling request is written on behalf of your client Meubles Foliot Incorporated (Foliot). Illustrative literature was received depicting the processing operations undertaken in Taiwan.
As provided by Counsel, the processing operations are as follows: (1) the Taiwan manufacturer imports wooden pieces from China which have been cut roughly to size; (2) in Taiwan, the wood pieces are unpacked and inspected; (3) after inspection, the unfinished posts are sanded; (4) mortises and pin holes are cut and drilled into the posts; (5) The posts are then sanded again; (6) next, bunk pin holes are drilled into the posts and the posts undergo several more sanding operations; (7) metal pins are then inserted into the posts; (8) the headboard rails are tenoned; (9) the tenons are then masked to protect the wood; (10) both the posts and rails are stained and lacquered; (11) after finishing operations are complete, the post and rails are assembled and then glued together; (12) the bunk pin holes are also tested to ensure that they are the correct size; and (13) after assembly, the headboards are inspected, labeled and packed.
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 its 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.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940).
Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 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 [the marking laws and regulations].” A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See Texas Instruments, Inc. v. United States, 69 C.C.P.A. 142, 681 F.2d 778 (1982).
In Carlson Furniture Industries v. United States, 65 Cust. Ct. 474 (1970), the U.S. Customs Court ruled that U.S. operations on imported chair parts constituted a substantial transformation, resulting in the creation of a new article of commerce. After importation, the importer assembled, fitted, and glued the wooden parts together, inserted steel pins into the key joints, cut the legs to length and leveled them, and in some instances, upholstered the chairs and fitted the legs with glides and casters. The court determined that the importer had to perform additional work on the imported chair parts and add materials to create a functional article of commerce. The court found that the operations were substantial in nature, and more than the mere assembly of the parts together.
We are of the opinion that the headboard is more than the mere assembly of the parts together of Chinese origin. The assembling of the good in Taiwan from unfinished wood pieces of Chinese origin involves a significant amount of time and effort in the fabricating of these foreign wooden components, for example, the mortises and pin holes cut and drilled into the posts, and the tenoned headboard rails. Furthermore, the staining and lacquering of the posts and rails are undertaken in Taiwan prior to the assembling of the components that form the headboard. Under the described assembly processes, we find that the foreign components, specifically that of the unfinished wood pieces of Chinese origin, lose their individuals identities and become integral parts of a new article, that of the headboard. Accordingly the country of origin of the headboard is Taiwan.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at (646) 733-3036.
Thomas J. Russo
National Commodity Specialist Division