HQ 0733637 - Country of origin marking requirements of rubber bladders used for accumulators in hydraulic or fluid systems; 19 CFR 134.35 - United States International Trade Commision Rulings

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HQ 733637

November 8, 1990

MAR-2-05 CO:R:V:C 733637 RSD

Category: MARKING

Phillip L. Melville, Vice President
Sacatec, Inc.
2110A Gallows Road
Vienna, Virginia 22182

RE: Country of origin marking requirements of rubber bladders used for accumulators in hydraulic or fluid systems; 19 CFR 134.35

Dear Mr. Melville:

This is in response to your letter dated July 5, 1990, requesting a binding ruling on the country of origin marking of rubber bladders used in accumulators for hydraulic or fluid systems.

FACTS:

Sacatec, Inc. is an importer of rubber bladders manufactured in France by your parent company, Sacatec-France. Rubber bladders are used in the manufacture of accumulator devices used in hydraulic systems for energy storage and subsequent energy release. Accumlators consist of two main parts: a steel containment shell (sometimes called "the bottle") and the rubber bladder. They are designed for specific applications in accordance with fluid dynamic engineering laws. Accumulators are manufactured in various shapes and sizes depending upon their application and use. Sacatec-France only makes the rubber bladders and does not make the shell part of the accumulator. The bladders are sold in the U.S. to accumulator manufacturers or as replacements for worn or failed original equipment on hydraulic or fluid systems. You indicated that you have no way of knowing which of the bladders would be used for original equipment or for replacement parts.

You have indicated that you may import the parts of the bladders and assemble them in the U.S. The bladders consist of several parts. The smaller sized bladders are made in two parts and larger sizes are made using 3 and 4 parts. The tops and bottoms are circular hemispheres. Each top has a steel valve molded into it. The larger sizes have drum-shaped centers cemented to the top and bottom circular hemispheres. The centers are made from cut-up sheets. The parts which you anticipate importing will be tops which incorporate valves, bottoms, sheets to be cut up and further manufactured into drum-shaped centers, and in some cases, completed drum-shaped centers.

The operations involved in the assembling the pieces of the bladder in the U.S. are trimming the rubber, grinding it, and matching it. The pieces are then glued with rubber cement, which is vulcanized and treated by pressure and heat. The bladders are then packaged for marketing. You indicate that two-thirds of the cost in producing the completed bladder comes from the labor in the cementing of the parts and one third of the cost comes from the rubber parts. We have received a sample of the bottom section of a bladder and various promotional literature on the bladders you sell.

ISSUE:

Do the bladders have to be marked with their country of origin after they are processed in the U.S.?

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 its 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. Congressional intent in enacting 19 U.S.C. 1304 was "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." United States v. Friedlaender & Co. 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "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 the marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed. Accordingly, the manufacturer or processor who converts or combines constituent materials into different articles will be considered the ultimate purchaser of the constituent materials. If the manufacturer is the ultimate purchaser, the imported article is excepted from marking (see section 134.35, Customs Regulations).

If the manufacturing process is merely a minor one leaving the identity of the imported article intact, the consumer or user of the article who obtains the article after the processing will be regarded as the ultimate purchaser, 19 CFR 134.1(d). In this case the processing done in the U.S. involves assembling the pieces of the bladder. A manufacturing process which is a minor assembly operation which leaves the individual pieces intact and does not require any significant skill, time or cost does not constitute a substantial transformation. See HQ 731748 (May 25, 1989).

It appears that the individual pieces of the bladder are not changed by the assembly operations. However, you have not provided us with enough specific information for us to make a definite determination on whether the assembly operation constituted a subistantial transformation. The buyers of the replacement bladders for accumlators would be the last persons in the U.S. to receive the bladder in the form it was imported and would thus be considered the ultimate purchasers. Accordingly, the bladders used as replacements must be marked with their country of origin to properly inform the ultimate purchaser of the country of origin of the bladders. However, because you indicated that it is not possible to segregate the shipments between what will be sold for replacement parts and original equipment, all bladders must be marked with their country of origin.

However, since all the pieces of the bladder are made in France, it is not necessary to mark each piece of the bladder. Only the finished bladder must be legibly marked in a conspicuous location with the country of origin. It is necessary only one piece of the bladder in a conspicuous location where such marking will remain visible afer the pieces are assembled.

HOLDING:

The assembly of the pieces of the bladder does not appear to be a substantial transformation and because the shipments cannot be segregated, the bladders must be marked with the country of origin, but each piece of the bladder does not have to be marked as long the country of origin marking is vissible after assembly.

Sincerely,

Marvin M. Amernick

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