HQ 0733838 - Country of origin marking of imported stuffed cotton dolls; substantial transformation; conspicuous; 19 CFR 134.41; clearly indicate - United States International Trade Commision Rulings

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HQ 733838
February 7, 1991

MAR-2-05 CO:R:C:V 733838 KG

CATEGORY: MARKING

Mrs. Helen Sugar
C.J. Tower Inc.
128 Dearborn Street
Buffalo, New York 14207-3198

RE: Country of origin marking of imported stuffed cotton dolls; substantial transformation; conspicuous; 19 CFR 134.41; clearly indicate

Dear Mrs. Sugar:

This is in response to your letter of October 4, 1990, requesting a country of origin ruling on behalf of Ganz Bros. Toys regarding imported stuffed cotton dolls.

FACTS:

The cotton shells are made in the Orient; these cotton shells have the face and clothing sewn on and have all the characteristics of the finished doll except that they are not stuffed. The shells are stuffed and then closed up in Canada. No information was given about where the stuffing originates. The finished dolls will then be shipped to the U.S. Two sample dolls, one stuffed and one not stuffed, were submitted for examination. The sample shell was made in China. Your client submitted a sample label which contains the legend, "Shell made in China Stuffed in Canada." The location of the label on the sample is sewn into the side seam of the doll which is underneath the skirt of the doll. Your client proposed that this label be sewn into the hem of the back of the skirt on future shipments. No information was submitted regarding the value of the various components or about the processing involved in stuffing the dolls.

ISSUE:

What is the country of origin for the purposes of 19 U.S.C. 1304 of these stuffed dolls?

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 of an article 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 for country of origin marking purposes.

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).

These cotton shells already have all the physical characteristics of the finished doll, including the face and clothing, except for the stuffing. Clearly, these shells are dedicated to use and could not be made into any article except the finished doll envisioned. The stuffing operation does not alter the name or character of the cotton shell or create a new article of commerce. Although the doll is not functional until it is stuffed, this factor is not determinative. The orange juice concentrate in National Juice, which was held to be not substantially transformed when processed into orange juice, was not drinkable in its imported form. No figures were submitted concerning the cost of the Chinese or Canadian processing and there is no indication that the processing is costly. Further, no information was submitted about the processing operation in Canada and we assume that it is a simple stuffing sewing operation. Based on the limited information presented, we conclude that there is no new article of commerce and no change in name, character or use. Therefore, the cotton shells are not substantially transformed in Canada and the country of origin of the stuffed dolls is the country where the cotton shells are made.

The label used to mark the country of origin must clearly indicate the country where the doll is made. For instance, for the sample submitted, the country of origin of the doll would be China and the doll must be properly marked to indicate that China is the country of origin. The legend "Shell made in China Stuffed in Canada" does not clearly indicate the country of origin of the doll and would not be an acceptable country of origin marking.

Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), requires that the marking be conspicuous enough that ultimate purchaser will be able to find the marking easily and read it without strain. The location of the label on the sample doll would not satisfy the requirements of 19 CFR 134.41(b), because the ultimate purchaser would have to lift up the doll's skirt to see the label. Without a sample of the proposed marking, we cannot determine whether such marking is conspicuous. We suggest sewing the label into one of the hands or the feet of the doll.

HOLDING:

The country of origin of the stuffed dolls is the country where the cotton shells are made. The legend "Shell made in China Stuffed in Canada" does not clearly indicate the country of origin of the doll and would not be an acceptable country of origin marking. The label on the sample doll, which is sewn in the side seam underneath the skirt, is not conspicuous and therefore, is unacceptable.

Sincerely,

John Durant
Director,

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