MAR-2 OT:RR:NC:1:140
Mr. Arthur W. Bodek
GDLSK
599 Lexington Avenue, FL 36
New York, NY 10022-7648
RE: THE COUNTRY OF ORIGIN MARKING OF LIPSTICK
Dear Mr. Bodek:
This is in response to your letter dated October 22, 2018, requesting a ruling on the Country of Origin Marking for imported Lipstick on behalf of your client, Markwins Beauty Brands, Inc. A marked sample was not submitted with your letter for review.
You state that bulk lipstick mass, of US origin, will be sent to China for processing into retail packages. The lipstick mass will be heated and poured into individual lipstick tubes. The tubes and caps are manufactured in China. This ruling determination is based on the above processing being the only manufacturing processes performed in China to the bulk lipstick mass.
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. 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.
"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 transformation 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 that differs from the original material subjected to the process. In determining whether the assembly of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. By definition, only merchandise which is "of foreign origin”, i.e., of a country of origin other than that of the U.S., is subject to the requirements of 19 U.S.C. 1304. Customs has ruled that products of the U.S. which are exported for further processing and subsequently returned, are not subject to country of origin marking upon importation to the U.S. unless the further processing in the foreign country constituted a substantial transformation of the product. In this case, the U.S. origin bulk cosmetic mass and powder are sent to China, where they are measured, melted or poured, and compressed into individual tubes. The processing described (melting and pouring into tubes) does not affect any significant change in the character or use of the lipstick mass for purposes of establishing country of origin. Therefore, it is our determination that the foreign processes do not constitute a substantial transformation and the lipstick remains a product of the country of manufacture of the lipstick mass (USA). Accordingly, the imported cosmetics are not subject to the country of origin marking requirements of 19 U.S.C. 1304.
Section 134.24(d) provides that usual disposable containers imported full, and used as such, at the time of importation shall not be required to be marked to show the country of their origin, but shall be marked to indicate the origin of their contents, regardless of the fact that the contents are excepted from marking requirements. The lipstick in tubes, based on the processing described, is packaged in China, for export to the U.S., and is a non-reusable disposable container. Therefore, as a non-reusable disposable container, the lipstick in tubes is exempt from marking under 19 CFR 134.24(d).
Perfumery, cosmetic, and toiletry products are subject to the requirements of the Federal Food, Drug, and Cosmetic Act, which are administered by the U.S. Food and Drug Administration. You may contact them at U.S. Food and Drug Administration, Office of Cosmetics and Colors, 5100 Paint Branch Parkway, College Park, MD 20740-3835, telephone number 301 436-1130.With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
You asked whether the subject product would be subject to the additional China duties under the additional duties imposed upon Chinese goods under Section 301 of the Trade Act of 1974.
CBP has detailed information regarding the 301 additional duties posted online at https://www.cbp.gov/trade/programs-administration/entry-summary/section-301-trade-remedies.
Documents found on that site provide that:
“All Products Covered by Section 301 Duties
The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export.”
Therefore based on the lipstick mass being only melted and packaged for retail sale in tubes, the subject merchandise will not be subject to those additional duties upon importation into the United States.
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 Paul Hodgkiss at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division