HQ 0733036 - Country of origin marking of imported crystal stemware - United States International Trade Commision Rulings

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HQ 733036
April 9, 1990

MAR-2-05 CO:R:C:V 733036 KG

CATEGORY: MARKING

Mr. John T. Addario
Ja-Mar Forwarding
Airport International Plaza
U.S. 1-9 at International Way
Newark, New Jersey 07114

RE: Country of origin marking of imported crystal stemware

Dear Mr. Addario:

This is in response to your letter of December 7, 1989, requesting a country of origin ruling on behalf of Crystal Clear Industries regarding imported crystal stemware.

FACTS:

Your client plans to import crystal stemware which is made in Austria at a unit cost of $1.60 and hand cut in East Germany at a unit cost of $0.62. You submitted samples of an uncut champagne flute to be exported to East Germany and a cut champagne flute which will be imported into the U.S. Both samples appear to be completed, polished glasses. The only difference is that one champagne flute has some simple flat cuts on the bottom above the stem.

ISSUE:

What is the country of origin of the imported crystal stemware made in Austria and hand cut in East Germany for country of origin marking and duty assessment purposes?

LAW AND ANALYSIS:

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 U.S. 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 U.S. the English name of the country of origin of the article. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that: "Congress intended 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."

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines the country of origin as "the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 occurs when articles lose their identity and become new articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940), National Juice Products Association v. United States, 10 CIT 48, 628 F. Supp. 978 (CIT 1986), Koru North America v. United States, 12 CIT ____, 701 F. Supp. 229 (CIT 1988).

The glass exported from Austria is a finished polished piece of stemware suitable for use as a champagne flute. There is no change in name, character or use caused by the hand cuts made to the glass in East Germany. Although the hand cuts are attractive, they are very simple flat cuts and do not greatly increase the value of the stemware. Based on these facts, we conclude that this stemware is not substantially transformed in East Germany. Pursuant to 19 CFR 134.1(b), the country of origin of this stemware is Austria.

A U.S. Department of Treasury memorandum dated May 21, 1986, from the Assistant Secretary of Enforcement to the Commissioner of Customs discussed the country of origin of crystal glassware which had been hand-blown and partially hand-cut in Czechoslovakia and further hand-cut and polished in Ireland. Crystal blanks, suitable only for further manufacturing and with a grayish tinge to it, were made in Czechoslovakia. The blanks were then shipped to Ireland, where more hand cutting and polishing was done, which more than doubled the value of the articles. The extent of the processing done in Ireland was considerable and required a lot of time and great skill. Based on these factors, the Department of Treasury concluded that a substantial transformation had occurred and that the entries of the glassware should be liquidated as products of Ireland.

This case is factually distinguishable from the situation which was the subject of the Department of Treasury memorandum. First, the crystal stemware made in Austria is polished rather than of a grayish tinge and would be marketable as finished stemware without the hand cuts. Further, although the hand cuts made in East Germany enhance the appearance of the stemware, making it more appropriate for use at a formal dinner or function, the hand cuts do not substantially increase the value of the stemware, the processing is not very time-consuming and the cuts are not very intricate. Based on these factors, we conclude that unlike the processing which was the subject of the Department of Treasury memorandum, the processing performed in this case in East Germany does not substantially transform the stemware into a product of East Germany.

With regard to your inquiry for the applicable rate of duty, if the stemware contains over 24 percent lead monoxide by weight, they would be classifiable in subheading 7013.21 of the Harmonized Tariff Schedule of the United States. The eight digit classification subheading and rate of duty for this stemware would depend on the value of the glassware. Since you have not provided us with this information, we cannot determine the rate of duty. Since the country of origin is Austria, the column one rate of duty would apply.

You also asked if the phrase "Made in Austria, Cut in East Germany" would be an acceptable marking. Section 134.46, Customs Regulations (19 CFR 134.46), requires that when the name of any foreign country or locality, other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in,""Product of," or other words of similar meaning. The purpose of this section is to prevent the possibility of misleading or deceiving the ultimate purchaser. Since the stemware was made in Austria and the additional information given as to the cutting is a true statement, the two different country names are not deceptive or misleading. Further, the two different country names appear together which satisfies the close proximity requirement and the name "Austria" is preceded by the phrase "Made in" as required. Therefore, your proposed marking is acceptable.

HOLDING:

The crystal stemware described above is not substantially transformed in East Germany. The country of origin of this imported stemware is Austria for both duty and marking purposes. Since Austria is a column one country, you would be required to pay a column one rate of duty for this stemware. Your proposed marking "Made in Austria, Cut in East Germany" is acceptable.

Sincerely,

John Durant
Director,

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