HQ 0734211 - Country of origin marking requirements for capacitors; substantial transformation; original equipment manufacturers; 19 CFR 134.35; HQ 798378; HQ 730952 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1992 HQ Rulings > HQ 0734162 - HQ 0734277 > HQ 0734211

HQ 734211

November 18, 1991

MAR-2-05 CO:R:V:C 734211 AT

CATEGORY: MARKING

Mr. John L. Harms
United Chemi-Con, Inc.
625 Columbia Street
Brea, California 92621

RE: Country of origin marking requirements for capacitors; substantial transformation; original equipment manufacturers; 19 CFR 134.35; HQ 798378; HQ 730952

Dear Mr. Harms:

This is in response to your letter of June 3, 1991, requesting a binding ruling on the country of origin marking of capacitors imported from Japan. Samples of the capacitors and packaging containers were submitted for our review.

FACTS:

Your company intends to import capacitors of various sizes from Japan. As imported, the capacitors are packaged in sealed cardboard boxes. An adhesive paper label is attached to the outer right-side of the cardboard box which is conspicuously and legibly marked (printed in ink) with the words "Made in Japan" in lettering approximately 18 point (a point is a unit of type measurement equal to 0.01384 inch or nearly 1/72 in., and all type sizes are multiples of this unit) along with other information, such as, part number, quantity, size, etc. Each box contains several plastic bags (200 capacitors in each bag) which are marked with the word "Japan" on the outside of the bag by a paper label. No other marking appears on the cardboard box. The individual capacitors themselves are not marked with the country of origin. You claim that after importation, you intend to sell these capacitors only by the box to U.S. companies who will use them in the manufacture of electronic components and that most of the capacitors will be used in the manufacture of radios. You also claim that many of the capacitors are of the size that they are incapable of being marked, or the marking would be so small that it would be impossible to read. You claim that the ultimate purchasers of the imported capacitors are the

U.S.manufacturers who purchased them and that the individual capacitors are excepted from country of origin marking under section 134.35, Customs Regulations (19 CFR 134.35), and only the outermost container is required to be marked with the country of origin.

ISSUE:

Are the imported capacitors marked in the manner described above excepted from country of origin marking under section 19 CFR 134.35.

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. 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 (1940). 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 transform- ation 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. In such circumstances the U.S. manufacturer is the ultimate purchaser. The imported article is excepted from individual marking and only the outermost container is required to be marked. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.35.

Customs has previously ruled in HQ 708378 (February 23, 1978) that capacitors may be excepted from individual country of origin marking pursuant to 19 U.S.C. 1304(a)(3)(D) provided that they are imported in packages legibly and conspicuously marked to indicate the country of origin, and Customs officers at the port of entry are satisfied that the capacitors will reach the ultimate purchaser in packages. In that case, original equipment manufacturers were determined to be the ultimate purchasers of the capacitors provided they would use the articles only in the production of equipment which they manufactured and would not resell the capacitors in their condition as imported. See also HQ 730952, May 18, 1988 (parts and subassemblies, consisting of coils, capacitors and cases, imported for use in the manufacture of plug-in adapters were substantially transformed by such manufacturers so as to make the importer/manufacturer the ultimate purchaser of the parts and subassemblies and only the outermost container was required to be marked with the country of origin).

Similarly, in this case, we find that the imported capacitors are substantially transformed by the U.S. companies who use them in the manufacturer of electronic components in that a new and different article of commerce is created, i.e., a car radio. The individual capacitors lose their separate identity and merge into a new article. Accordingly, the U.S. companies which you sell these capacitors to are the ultimate purchasers of the capacitors and as specified below, the individual capacitors may be excepted from country of origin marking and only the outermost container must be marked with the country of origin "Japan".

HOLDING:

Imported capacitors sold to U.S. companies for use in the manufacturer of electronic components are substantially transformed and the manufacturer is considered to be the ultimate purchaser of the capacitors. Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.35, the individual capacitors do not have to be marked with the country of origin, as long as they are imported in containers that are properly marked with the country of origin and Customs officials at the port of entry are satisfied that the capacitors will only be sold to original equipment manufacturers and only in their original marked boxes.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling