HQ 0733106 - Country of origin marking of imported 35mm film - United States International Trade Commision Rulings

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HQ 733106
March 19, 1990

MAR-2-05 CO:R:C:V 733106 KG

CATEGORY: MARKING

Mr. Joe Laird
Pacific Resources, Inc.
175 W. Jackson Boulevard
Suite 1800
Chicago, Illinois 60604

RE: Country of origin marking of imported 35mm film

Dear Mr. Laird:

This is in response to your letter of February 2, 1990, requesting a country of origin ruling regarding imported 35mm film, metal and plastic film cassette vials.

FACTS:

You plan to import 35mm film in 100 meter long rolled pancakes from the Peoples Republic of China. The film will be cut, rolled and placed in metal cassettes in the U.S.

The metal for the cassettes will be imported from Japan and cut, rolled and made into metal cassettes in the U.S.

The plastic film canisters in which the filled metal film cassettes will be placed will be imported from Korea.

ISSUE:

What is the proper country of origin marking of the imported 35mm film, metal and plastic film canisters pursuant to section 304 of the Tariff Act of 1930, as amended?

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 134.35, Customs Regulations (19 CFR 134.35), provides that articles used in the U.S. in manufacture which results in articles having a name, character or use differing from that of the imported articles will be within the principle of the decision in the case of United States v. Gibson- Thomsen Co., Inc., 27 CCPA 267 (1940). Under this principle, 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 section 304(a), Tariff Act of 1930, as amended (19 U.S.C. 1304(a)), and the article shall be excepted from marking. If the article is substantially transformed in the U.S., only the outermost container of the imported article shall be marked.

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).

In ORR Ruling 217-69 (March 28, 1969), Customs ruled that a U.S.-made film base was substantially transformed when it was coated with photographic emulsion in Italy. The resulting x-ray film was considered a product of Italy for marking purposes. The rolls of x-ray film were excepted from marking so long as the container in which the rolls were packaged were marked to indicate that Italy was the country of origin. In addition, Customs recently held in HQ 732842 (February 23, 1990), that bulk photographic film imported from Japan and cut to length, inserted into cartridges and packaged in sealed boxes in the U.S. was not substantially transformed in the U.S. Customs required that the sealed boxes be marked with the country of origin of the imported film. You propose to do the same processing in the U.S. which was held in HQ 732842 not to be a substantial transformation. Based upon the conclusion reached in HQ 732842 in analyzing identical processing, we conclude that the imported 35mm film is not substantially transformed in the U.S.

The second issue raised concerns the marking of the retail film cartridges. This issue was also addressed in ORR 217-69 and HQ 732842; Customs ruled in both cases that the rolls of film were excepted from marking and only the container in which the rolls are packaged should be marked with the country of origin. Pursuant to 19 U.S.C. 1304(a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), Customs excepts from individual marking requirements imported articles for which the marking of the containers will reasonably indicate the origin of the articles. As discussed above, the purpose of the marking statute is to allow ultimate purchasers to make informed buying choices. The film cartridge is only sold to ultimate purchasers in a box. As long as the box is properly marked with the country of origin of the film, the film cartridge itself and the plastic holders that are inside the paper box are excepted from marking under 19 CFR 134.32(d). However, since the film is not imported in the paper boxes, but is repackaged after importation, the availability of this exception is at the discretion of the district director of Customs where the entry is made. Pursuant to 19 CFR 134.34, an exception may be authorized, in the discretion of the district director, for the imported film because it will be repacked after release from Customs custody if: the containers in which the articles are repacked will indicate the origin of the film to an ultimate purchaser in the U.S. and the importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

You indicated in your letter that the metal cassettes are cut, rolled and made in the U.S. from metal imported from Japan. Imported metal cut, rolled and made into metal cassettes would create a new and different article having a new name, character and use. The metal, which is a raw product, is made into a finished article. Imported metal could be made into a number of objects with a variety of uses. In contrast, the finished article has a new name, a film cassette, a new shape, thickness and a very particular use. Therefore, the imported metal is substantially transformed in the U.S. into metal cassettes. Pursuant to 19 CFR 134.35, only the outermost container in which the imported metal is entered into the U.S. must be marked with the country of origin of the metal.

The question of how to mark the plastic film canisters depends on whether they are considered disposable containers or not. Section 134.24(c)(1), Customs Regulations (19 CFR 134.24(c)(1)), provides that when disposable containers or holders are imported by persons or firms who fill or package them with various products which they sell, these persons or firms are the ultimate purchasers of these containers or holders and they may be excepted from individual marking pursuant to 19 U.S.C. 1304(a)(3)(D). The outside wrappings or packages containing the containers shall be clearly marked to indicate the country of origin.

Custom recently held in HQ 732823 (January 19, 1990), that imported cardboard shoe boxes are disposable containers and in HQ 731863 (February 14, 1990), that plastic cosmetic compacts are disposable containers. In this case, the film canisters are the primary container for 35mm film whose purpose is to insure that the film canisters are stored in a light tight environment prior to being loaded into the camera. Further, once the film is shot, the film is placed back in the plastic container to be sent out for development and processing. Given these facts, it is apparent that the film canisters are specifically designed to be filled with sealed film cassettes and that once the film is processed, the plastic container is intended to be discarded. Therefore, the plastic film canisters are disposable containers imported empty to be filled and therefore, pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.24(c)(1), only the outside wrappings or packaging containing the plastic film canisters are required to be clearly marked to indicate the country of origin of the plastic film canisters.

HOLDING:

The imported bulk 35mm film is not substantially transformed in the U.S. However, pursuant to 19 CFR 134.32(d), the film itself may be excepted from marking in the discretion of the district director pursuant to 19 CFR 134.34 in which case only the outer box in which the film reaches the ultimate purchaser must be marked with the country of origin of the film.

The imported metal is substantially transformed in the U.S. into metal cassettes. Therefore, pursuant to 19 CFR 134.35, only the outermost container in which the metal is imported must be marked to indicate the country of origin of the metal.

The imported plastic film canisters are disposable containers and are excepted from individual marking pursuant to 19 CFR 134.24(c)(1). The outermost wrapping or packaging containing the plastic film canisters must be marked to indicate the country of origin of the canisters.

Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs

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