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HQ 729316


April 20, 1989

MAR 2-05 CO:R:C:V 729316 LR

CATEGORY: MARKING

District Director of Customs
P.O. Box 9516
El Paso, Texas 79985

RE: Country of Origin Marking Requirements for Abrasive Belts

Dear Sir:

This is in response to your memorandum of November 1, 1985 (CLA 2-EP:C:C HA) which forwarded a ruling request submitted by 3M (the importer), concerning country of origin marking requirements for abrasive belts. We regret the delay in responding. Your memorandum was apparently misplaced.

FACTS:

Abrasive belts, which are used with electrical, industrial and home sanders, are manufactured in the U.S. into continuous rolls in varying widths. The rolls are exported to Mexico where they are cut to proper length (and in some cases, also to proper width), 3/8 inch of the abrasive is ground off each end, and the two ends are spliced together with an adhesive. The finished product is returned to the U.S.

The importer would like to mark the imported product either "Spliced in Mexico of U.S. Material" or "Assembled in Mexico". You are of the opinion that the belts must be marked "Made in Mexico of U.S. Materials" in view of the fact that the belts are not entitled to entry under subpart 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), which replaced item 807.00, Tariff Schedules of the United States.

ISSUE:

What are the country of origin marking requirements for abrasive belts manufactured in the U.S. into continuous rolls and exported to Mexico where they are cut to proper length (and possibly width), and spliced together?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires, subject to certain specified exceptions, that every article of foreign origin imported into the U.S. shall be marked to indicate the country of origin to the ultimate purchaser in the U.S. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Section 134.32(m), Customs Regulations (19 CFR 134.32(m)), provides an exception from marking for U.S. products exported and returned. U.S. articles sent abroad for processing fall within this exception unless they are substantially transformed prior to their return to the U.S. See HQ 729519, May 18, 1988 (wine cooler flavor based which is produced in the U.S., exported to Canada and mixed with carbonated water is excepted from marking pursuant to 19 CFR 134.32(m) because the processing in Canada is not a substantial transformation).

In order for a substantial transformation to be found, an article having a new name, character or use must emerge from the processing. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940)

This test was applied in HQ 730949, July 18, 1988, to determine whether low insertion jumpers (used to transmit signals from one printed circuit board to another) made in the U.S. into continuous rolls and exported to Mexico to be cut to length, and cut to expose the conducting medium, were excepted from marking pursuant to 19 CFR 134.32(m). In determining that the Mexican processing did not constitute a substantial transformation, Customs noted that only minor processing was performed in Mexico and that before such processing the articles are dedicated for use as low insertion force jumpers, and can be identified as such. Accordingly, Customs determined that the cables remain a product of the U.S. and are excepted from marking.

1/ An exception to the general rule is for articles assembled abroad in whole or part from U.S. components which are entitled to an exception from duty under subheading 9802.00.80, HTSUS. These articles are considered to be products of the country of assembly for purposes of 19 U.S.C. 1304, whether or not the assembly constitutes a substantial transformation See 19 CFR 10.22.

The abrasive rolls which are the subject of this inquiry undergo similar processing in Mexico. Like the cables, the abrasive rolls are cut to a specified length (and in some cases, width) with some additional grinding or cutting away of the ends. Splicing of the ends is the only additional operation that is performed. None of these processes changes the name, character or use of the product, which is manufactured almost entirely in the U.S. The processes are minor operations which merely render the product ready for use.

HOLDING:

For purposes of 19 U.S.C. 1304, the processing of abrasive belts manufactured in the U.S. into continuous rolls and processed in Mexico by cutting to length and possibly width, grinding off of the ends, and splicing, does not substantially transform them into a product of Mexico. Accordingly, assuming that the belts are not entitled to an exemption from duty under subheading 9802.00.80, HTSUS, the belts are excepted from marking pursuant to 19 CFR 134.32(m). Nonetheless, if the importer chooses to mark the product, any accurate marking which does not mislead the ultimate purchaser, such as spliced in Mexico of U.S. material, is acceptable.

Sincerely,

Marvin M. Amernick

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