HQ 0730952 - Country of origin marking requirements for parts and subassemblies for a plug-in adapter - United States International Trade Commision Rulings

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HQ 730952

May 18, 1988

MAR-2-05 CO:R:C:V 730952 jd

CATEGORY: MARKING

Mr. Robert Slomovitz
Chief, Commercial Operations Branch 1
New York Seaport
6 World Trade Center
New York, New York 10048

RE: Country of origin marking requirements for parts and subassemblies for a plug-in adapter

Dear Mr. Slomovitz:

This is in reply to your letter of December 4, 1987, requesting advice concerning a country of origin marking inquiry by Radionic Industries, Inc.

FACTS:

According to Radionic Industries, Inc., letter of October 22, 1987, they import the parts and subassemblies necessary to make a plug-in adapter. The parts include such articles as coils, capacitors, and cases. The finished articles are similar to the type used on telephone answering machines, rechargeable calculators, etc.

Radionic has requested approval of a plan to mark the parts and subassemblies "Made in Korea" such that the marking would be visible upon importation. However, after importation, assembly of the plug-in adapter would conceal that marking. The finished units would then be marked "Assembled in the U.S.A."

You express the opinion that Radionic is the ultimate purchaser of the parts and subassemblies and that the articles are properly marked at the time of entry.

ISSUE:

Are parts and subassemblies imported for use in the manufacture of plug-in adapters substantially transformed by such manufacture so as to make the importer/manufacturer the ultimate purchaser of the parts and subassemblies for country of origin marking purposes?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that every article of foreign origin (or its container) 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 the English name of the country of origin of the article.

Section 134.35, Customs Regulations (19 CFR 134.35), implementing the principle of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98), provides that an article used in the U.S. in manufacture which results in an article having a name, character, or use differing from that of the imported article will be considered substantially transformed, and therefore the manufacturer or processor in the U.S. who converts or combines the imported article into the different article will be considered the ultimate purchaser of the imported article within the contemplation of 19 U.S.C. 1304(a). Accordingly, the article shall be excepted from marking. However, in accordance with 19 U.S.C. 1304(b) and { 134.22, Customs Regulations (19 CFR 134.22), the outermost container of the imported article shall be marked to indicate the country of origin of the article.

Customs has previously ruled that capacitors may be excepted from individual marking pursuant to 19 U.S.C. 1304(a)(3)(D) provided they are imported in packages legibly and conspicuously marked to indicate the country of origin, and Customs officers at the port of entry are satisfied that the capacitors will reach the ultimate purchasers in the marked packages (708376; February 23, 1978). In that case, original equipment manufacturers were determined to be the ultimate purchasers of the capacitors provided they would use the articles only in the production of equipment which they manufactured and would not resell the capacitors in their condition as imported.

HOLDING:

The domestic assembly process to which the parts and subassemblies are subjected effects a substantial transformation of those articles into a new and different article of commerce with a new name, character and use, i.e., a plug-in adapter. The component pieces lose their separate identity and merge into a new article. Accordingly, Radionic Industries, Inc., as the importer/assembler, is considered the ultimate purchaser of the parts and subassemblies. The parts and subassemblies need not be marked in such a way that their marking remain visible after assembly into a plug-in adapter. In fact, only the outermost container of the parts and subassemblies need be marked at the time of importation to indicate the foreign origin of the constituent articles.

Since the constituent imported components of the plug-in adapter are substantially transformed by assembly, the marking contemplated on the finished article, "Assembled in the U.S.A.", is beyond the jurisdiction of the Customs Service. We suggest the importer contact the Federal Trade Commission, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20580, to determine if such marking would be in accord with various labeling laws administered by that agency.

Sincerely,

Marvin M. Amernick

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