HQ 0734065 - Country of Origin Marking - welded steel pipe and fittings; 19 U.S.C. 1304(c). - United States International Trade Commision Rulings

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HQ 734065

July 18, 1991
MAR-2-05 CO:R:C:V 734065NL

CATEGORY: MARKING

Raymond H. Jensen, President
Merit Manufacturing Corporation
316 Circle of Progress
Pottstown, PA 19464

RE: Country of Origin Marking - welded steel pipe and fittings; 19 U.S.C. 1304(c).

Dear Mr. Jensen:

This is in response to your letter dated March 6, 1991, in which you request authorization for Merit Manufacturing Corporation's supplier, Adtek Pipe and Tube Company, to omit country of origin marking for welded steel pipes imported from Canada. Samples were submitted.

FACTS:

Merit purchases welded steel pipe from Adtek, a Canadian supplier, in lengths of approximately 20 feet. As presently imported the lengths of pipe are die stamped with the name "Canada". After importation into the U.S. Merit cuts each length into approximately 250 pieces, which are then converted into weld-on type branch outlet fittings. It is asserted that this processing, which includes cold forging, threading, and shot blasting, converts the pipe lengths into finished pipe fittings.

On some of the finished fittings the die stamped name "Canada" remains visible after the U.S. operations. Some of Merit's customers have rejected fittings because of this marking. It is therefore requested that the Canadian supplier, Adtek, be permitted to omit the marking on the lengths of pipe sold to Merit.

ISSUE:

May the lengths of pipe be excepted from Country of Origin marking?

LAW AND ANALYSIS:

Unless excepted, all articles imported into the U.S. are
required to be marked with the English name of their country of origin at the time of importation, and such marking must remain on the article until it reaches the ultimate purchaser in the U.S. 19 U.S.C. 1304. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

In section 207 of the Trade and Tariff Act of 1984, as amended (19 U.S.C. 1304(c)), Congress prescribed special country of origin marking requirements for imported pipes, tubes, and fittings. Section 207 provides that all imported pipes and pipe fittings shall be marked by means of die stamping, cast-in-mold lettering, etching, or engraving. Customs is prohibited from granting any exceptions from this requirement unless it is demonstrated that it is technically or commercially infeasible to mark by one of the four prescribed methods. Here, it is evident that there is no such technical or commercial infeasibility. Accordingly, Customs will not approve an exception from country of origin marking for these imported lengths of pipe. They must be marked at the time of importation and until they reach their ultimate purchaser in the U.S. in accordance with the special requirements of 19 U.S.C. 1304(c).

A related issue, not raised directly in your letter, is whether such marking as remains on the finished fittings after may be removed prior to sale of the fittings. In previous determinations Customs has ruled that so long as imported pipe or fittings are legally marked at the time they reach the ultimate purchaser, it is not a violation of country of origin marking requirements for the ultimate purchaser to remove or obliterate the markings during further processing. See HQ 728693 (November 5, 1985); HQ 732883 (August 1, 1990). Following the holdings of these rulings, if Merit is the ultimate purchaser of the imported pipe, the pipe may be marked in a location where it will be obliterated during further processing.

Pursuant to 19 CFR 134.35, a manufacturer or processor in the U.S. who substantially transforms an imported article is considered its ultimate purchaser. A substantial transformation is said to occur when, after processing, an article emerges having a new name, character, or use. In this case, it is our opinion that the process by which Merit converts lengths of pipe into fittings does effect a substantial transformation. It is evident that the extensive cutting, cold forging, threading, and shot blasting, easily satisfy the standards for the substantial transformation of steel products established in previous decisions and rulings. See, Midwood Industries, Inc. v. United States, 64 Cust. Ct. 499, C.D. 4026, 313 F. Supp. 951(1970); C.S.D. 89-121 (July 25, 1989), 23 Cust. B. & Dec. 38 (extensive machining of imported forgings into socket wrenches effects substantial transformation). Under the circumstances, Merit is the ultimate purchaser of the imported pipe lengths which are
then substantially transformed into weld-on fittings. As such, the pipes may be marked in a location where such marking will be obliterated during processing.

HOLDING:

Your request that lengths of pipe imported from Canada be excepted from country of origin marking is denied on the basis of section 207 of the Trade and Tariff Act of 1984, as amended (19 U.S.C. 1304(c)). However, because Merit is the ultimate purchaser of the pipe by virtue of the processing it performs after importation, the lengths of pipe may be marked in a location where such marking will be obliterated during such processing.

Sincerely,

John Durant, Director
Commercial Rulings Division

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