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HQ 731588

March 13, 1990

MAR-2-05 CO:R:C:V 731588 NL

CATEGORY: MARKING

Deborah A. Gross
Manager, Customs Department
North American Philips Corporation
100 East 42nd Street
New York, NY 10017

RE: Country of Origin Marking of Cellular Mobile Telephones

Dear Ms. Gross:

This is in response to your letter of July 7, 1988, requesting a ruling that Australia is the country of origin of the Philips model FM9000 cellular mobile telephone. We regret the delay in responding to your request.

FACTS:

The article consists of a transceiver, handset, and associated installation accessories. The transceiver and handset, the major components, are manufactured at a Philips facility in Australia from parts sourced in a number of countries, including Japan, Australia and the U.S. Some accessories are manufactured in Australia also, while others are manufactured elsewhere. You state also that a transportable conversion kit, manufactured in Denmark, with a battery made in the U.S., will be sold. The cellular mobile telephone set is assembled and packaged in Australia for retail sale. You do not indicate whether the conversion kit will be packaged with the other components or sold separately.

You have submitted photographs, a summary of the material, labor and manufacturing overheads, and a parts list identifying the source and cost of the parts for the handset, transceiver, and conversion kit. The photograph of the entire cellular telephone set shows other cables and accessories, but we have no information as to their countries of origin. You state that taking into account the costs of materials, labor, and various overhead allowances, the Australian value of the set is 53% of the total cost, the Japanese value is 23%, and the value from other foreign sources (including U.S.) is 24%.

ISSUE:

For purposes of country of origin marking, is Australia the country of origin of the cellular mobile telephone?

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.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. The term "country of origin" is defined in section 134.1(b), Customs Regulations (19 CFR 134.1(b)), as the country of manufacture, production, or growth of any article of foreign orign 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". Under the principle of the case of U.S. v. Gibson- Thomson Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98), an article used in manufacture which results in an article having a name, character or use differing from that of the consisuent article is said to have been substantially transformed.

In a previous ruling, HQ 730062 (June 9, 1987), we addressed in a different context the country of origin marking of mobile cellular telephone components. There, the parts known as the "top assembly", consisting principally of the handset, cradle- swivel mount assembly, control cable, adapter and mounting kit were imported from Canada and then combined in the U.S. with a Korean transceiver and an antenna. We ruled that while we would treat the components of the top assembly as an entirety for country of origin marking purposes, merely combining the top assembly with the tranceiver and antenna was not a substantial transformation. Thus we required that the foreign components be separately marked with their countries of origin.

Here, it is evident that the handset and transceiver, the major components of the cellular mobile telephone, are manufactured in Australia, and packaged there into a complete cellular mobile telephone set. It is our opinion that the numerous parts listed in your submission are substantially transformed in Australia into the handset and tranceiver. We are satisfied that, unlike the components at issue in our prior ruling, the handset and transceiver of the FM 9000 system are produced in a significant manufacturing operation, and not merely combined. It is our opinion that since the major components of the system are of Australian origin, the FM 9000 cellular mobile telephone system is a product of Australia within the meaning of 19 CFR 134.1(b).

However, the transportable conversion kit remains a product of Denmark, and its battery remains a product of the U.S.

You also ask us to confirm that the Japanese parts which are included in the product are not subject to the Antidumping Duty Order in Commerce Department Case No. A-588-405. For your information, while the Customs Service is responsible for enforcing the country of origin marking requirements of 19 U.S.C. 1304, the Commerce Department has independent authority to determine the scope of the products covered by antidumping and countervailing duty orders. In making its determinations as to the scope of its orders Commerce is not bound by the country of origin decisions of the Customs Service. Thus, any questions you may have concerning antidumping orders and their coverage should be directed to Commerce.

HOLDING:

For purposes of 19 U.S.C. 1304, Australia is the country of origin of the handset and transceiver of the Philips Model FM9000 cellular mobile telephone set. Since these are the major components of the set, the set may be marked as a product of Australia.

Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs

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