OT:RR:NC:N3:140
Ms. Kayla Owens
Stein Shostak Shostak Pollack & O'Hara
865 S. Figueroa Street, Suite 1388
Los Angeles, CA 90017
RE: The country of origin of prepared lipliner, eyebrow pencil, gel eyeliner, foundation, lipstick, primer, and remover.
Dear Ms. Owens:
In your letter dated April 01, 2019, you requested a country of origin ruling determination on various cosmetic products on behalf of Elegant Best Investment Limited (“Elegant Best”). You provided additional information and pictures, which our office requested, on April 25, 2019.
The merchandise under consideration is prepared lipliner, eyebrow pencil, gel eyeliner, foundation, primer, and remover. We note that you also had indicated lipstick (lip glossy) in one document. However, no information was received for that product. This ruling will not apply to lipstick. You may resubmit a separate request if you still require a review for “lip glossy”.
The marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. 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 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 USC 1304.
The "country of origin" is defined in 19 CFR 134.1(b) 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.
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
You noted that CBP issued a ruling to Elegant Best in February 2019, with respect to the country of origin of various cosmetic products that are processed in Korea, and put into retail containers and packaging in China, before exportation to the United States. See N302864 (2/27/19). In that ruling, it was determined that the goods, (in that scenario), remained products of South Korea, because the processing and packaging in China did not result in a new product having a distinctive name, character and use. You have requested our opinion on the correct Country of Origin for marking purposes on additional products, which undergo processing in South Korea and China similar to the prior ruling. The products under review and associated processing are described below.
Whereas we cannot issue a blanket determination on all articles which may undergo a similar process, we can look at the specific products and the manufacturing process that you have indicated in your request. You also provided images of the finished products upon our request.
The following is a summary of the articles and processing which are relevant to the instant issue.
Products under review are lipliner, eyebrow pencil, gel eyeliner, foundation, primer and remover. All products under review are used in either the application or removal of various makeup products. All retail packaging, including the plastic and metal tubing, brush components, and bottles are sourced from China. The flowcharts submitted as Exhibit A and B are representative of the processing that these products undergo in Korea and China.
Processing in Korea:
The processing in Korea consists of weighing the raw material, melting, mixing, grinding, color checking, inspection and storage of the bulk product. The bulk material which has been mixed and prepared in South Korea is then shipped to China.
You state that no additional ingredients are added to the products in China. There are two processes which occur in China that are the subject of this request. The first process is the hot filling process for (1) lipliner; (2) eyebrow pencil; (3) gel eyeliner; and (4) foundation (two possible production steps). The second process is the filling process for lipstick (called lip glossy in process documents), foundation, primer and remover.
You note that the foundation may retain the mold as part of its packaging. In China, a warm mold is filled with the bulk material using an automated filling machine and then cooled. You also indicate that a hot filing process is used to fill “mechanism pencils” for the eyebrow pencil, gel eyeliner, and lipliner. After inspection, the products are packed, labeled and packaged for exportation.
This process in China is similar to the process described in NY N301371 (11/2/18). In that ruling, Customs determined that bulk lipstick mass of U.S. origin that was shipped to China for processing into retail packages (through heating and pouring into individual lipstick tubes) did not undergo a substantial transformation; therefore, the lipstick remained a product of the United States. You note that NY N036535 (9/15/08) also found that similar processes did not amount to a substantial transformation.
It is your opinion that the country of origin for these products should also be Korea. We agree.
The mixed and prepared lipliner, eyebrow pencil, gel eyeliner, foundation, the primer, and remover do not undergo a change in name, character or use in China during the filling and retail packaging as described in your submission. They either are packaged in forms of plastic tubing which you call a “mechanism pencil”, or are put into plastic or glass, tubes, bottles or jars. Some of the “pencils” contain only plastic, while others also have an aluminum component.
All of the applicators, tubes, and other retail containers are disposable and not reused.
It is our opinion that the Country of Origin for marking purposes of the lipliner, eyebrow pencil, gel eyeliner, foundation, primer and remover will be Korea.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 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