HQ 0733693 - Country of origin marking of imported sunglasses front pieces: sunglasses frames; eyeglasses; substantial transformation; painting; Madison Galleries. - United States International Trade Commision Rulings

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HQ 733693
October 17, 1990

MAR-2-05 CO:R:C:V 733693 KG

CATEGORY: MARKING

Anthony D. Padgett, Esq.
Thelen, Marrin, Johnson & Bridges
805 15th Street, N.W.
Washington, D.C. 20005-2207

RE: Country of origin marking of imported sunglasses front pieces: sunglasses frames; eyeglasses; substantial transformation; painting; Madison Galleries.

Dear Mr. Padgett:

This is in response to your letter of August 1, 1990, requesting a country of origin ruling on behalf of Bausch & Lomb Incorporated, regarding imported sunglasses front pieces.

FACTS:

Bausch & Lomb will ship U.S.-made gold-colored wire front pieces to Mexico to have epoxy and paint applied. The Mexican operation involves unskilled workers applying paint and epoxy by hand with small paint brushes. This procedure gives the front pieces a tortoise shell appearance.

The front pieces are then shipped back to the U.S. with the outermost package labeled "Mexico." In the U.S., the front pieces have U.S.-made nose pieces, U.S.-made temples and U.S.- made non-prescription lenses attached. The finished non- prescription sunglasses, known as the "Tortuga" model, are then inspected, packaged and shipped to wholesalers and other distribution points.

A sample wire front piece and finished front piece were submitted for examination.

ISSUE:

Whether the imported sunglasses front pieces with the tortoise shell appearance are excepted from individual country of origin marking.

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. 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 this part.

Section 134.35, Customs Regulations (19 CFR 134.35), states that the manufacturer or processor in the U.S. who converts or combines the imported article into a different article having a new name, character or use will be considered the ultimate purchaser of the imported article within the contemplation of section 304(a) of the Tariff Act of 1930, as amended, and the article shall be excepted from marking. The outermost containers of the imported articles 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).

Section 134.32(m), Customs Regulations (19 CFR 134.32(m)), excepts from individual marking products of the U.S. exported and returned. In applying this section, Customs has ruled that products of the U.S. which are exported and returned are generally not subject to country of origin marking unless they are substantially transformed in a foreign country. See HQ 729519 (May 18, 1988).

The question presented is whether the application of paint and epoxy on sunglasses fronts by unskilled workers in Mexico is a substantial transformation. The Court of International Trade concluded in Madison Galleries, Ltd., v. United States, 688 F. Supp. 1544 (CIT 1988), aff'd, 870 F.2d 627 (Fed. Cir. 1989), that the painting and decoration of blank porcelain vases in Hong Kong was a substantial transformation. However, as you noted, the Court gave great weight to the fact that the decoration added at least 35 percent to the appraised value of the vases and that elaborate artistic processes were applied to the vases. Further, Customs set forth its interpretation of Madison Galleries in T.D. 89-21 (February 15, 1989):

[t]he court's position that the mere decoration of porcelainware constitutes substantial transformation runs counter to a substantial line of administrative rulings ... because this secondary determination was unnecessary to an adjudication of the essential issue of the case [eligibility for the Generalized System of Preferences] it is considered dicta...The Customs Service continues to adhere to its position that the mere decoration of porcelainware does not constitute a substantial transformation.

Customs ruled in C.S.D. 88-23 (August 12, 1988), that U.S.- made earrings painted a solid color in Canada are not substantially transformed. Painting the earrings was characterized as a "minor finishing operation which leaves the fundamental identity of the earrings intact. Unlike the painting in Madison Galleries which produced a highly decorative article with artistic qualities, the earrings here are painted a solid color and lack any artistic and decorative effects." Customs also ruled in HQ 732964 (August 3, 1990), that the painting of ceramic bells known as "bisque ware" is not a substantial transformation.

The sunglasses fronts involved in this case are similar to the earrings in C.S.D. 88-23; the fronts are painted and epoxy is applied to give a tortoise shell appearance and there is no artistic effect created. The work is done by unskilled laborers who do not require artistic ability to perform their job. Although no figures were quoted regarding the value of the Mexican processing, there is no indication that it adds a significant increase in value to the finished sunglasses. For these reasons, we conclude that the sunglasses fronts are not substantially transformed in Mexico. Since the sunglasses fronts are made in the U.S., exported and returned, and not substantially transformed upon return, pursuant to 19 CFR 134.32(m), these sunglasses fronts are excepted from country of origin marking.

HOLDING:

Applying paint and epoxy to wire-frame sunglasses fronts is not a substantial transformation. The wire-frame sunglasses fronts are excepted from country of origin marking pursuant to 19 CFR 134.32(m).

Sincerely,

Marvin M. Amernick
Chief, Value, Special Programs

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