HQ 0734258 - Country of origin of marking requirements for frames for safety glasses with prescription lenses, eyeglasses, substantial transformation, hangtags, stickers; 19 CFR 134.41, 19 CFR 134.44; HQ 729649 - United States International Trade Commision Rulings

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HQ 734258
January 7, 1991

MAR-2-05 CO:R:C:V 734258 RSD

CATEGORY: MARKING

Margaret Polito, Esq.
Coudert Brothers
200 Park Avenue
New York, New York 10166

RE: Country of origin of marking requirements for frames for safety glasses with prescription lenses, eyeglasses, substantial transformation, hangtags, stickers; 19 CFR 134.41, 19 CFR 134.44; HQ 729649

Dear Ms. Polito:

This is in response to your letter July 11, 1991, on behalf of your client, Hudson Optical Corporation, requesting a binding ruling on the country of origin marking requirements for eyeglass frames used in making safety glasses with prescription lenses. We have also received your additional submissions of October 18, 1991, November 1, 1991, and November 5, 1991.

FACTS:

Hudson Optical Corporation (Hudson) is a distributor of industrial safety glasses. Hudson imports safety glass frames without lenses. The frames are sold by Hudson to independent optical laboratories, who produce lenses that meet the requirements of particular individuals in the U.S. with vision impairments. After the prescription lenses are produced to the specifications of a particular individual, they are inserted into the frames. The finished safety glasses are sold by the optical laboratory to the individual who ordered them for use in connection with his or her employment, hobby, or business. The information we have received indicates that Hudson offers the wearer a choice of 12 different styles of prescription safety glass frames. You indicate, however, that typically employers restrict the type of frames that employees may choose, due to the nature of the work performed by the employees. In addition, insurance concerns and governmental safety standards require that certain employers only purchase industrial plano safety frames for their employees. You have also advised that the prescription safety glasses that are made in the United States from the frames imported by Hudson are purchased by employers of individuals who require the use of such safety glasses in connection with their employment. However, in limited circumstances employers set a cap as to the amount they will spend on the safety glasses, and the employees may elect to supplement this amount with his or her own money in order that they receive a particular style of safety glasses.

Hudson proposes to indicate the country of origin of these safety glasses frames by affixing a hangtag or an adhesive sticker to the frames. The hangtag/sticker would state the origin of the frames in order to apprise the laboratories of the country of origin of the frames. During the insertion of the prescription lenses, the laboratories would remove the hangtag/stickers from the frames.

ISSUES:

Does inserting the prescription lenses into the frames to make safety glasses constitute a substantial transformation?

Who is the ultimate purchaser of the eyeglass frames used to make the safety glasses?

Can the frames be marked to indicate their country origin by use of hangtags or stickers?

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 and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked (see section 134.35, Customs Regulations).

In HQ 729649, October 27, 1986, Customs indicated that the assembly of frame parts, temples and fronts, to form a finished frame, and the insertion of lenses into the frames to make a pair of prescription safety glasses resulted in a substantial transformation. We stated that the industrial employer is actually purchasing one complete item, safety spectacles, and that the assembly of the frame components and adding the lenses substantially transforms the finished frames. Without the safety lenses, the spectacles lack an essential component thereof. We also noted that although the employee will be given a few choices of frames, it is the employer who determines the type of safety spectacles that requires for its employees.

The same analysis used in HQ 729649 applies to this case. Although the wearer may have some choice in choosing the frames, it is very limited and is controlled largely by the employer, who must follow standards dictated by insurers or government safety agencies. The employer is not making two separate purchasing decisions but is buying one article, the safety glasses. Accordingly, for the reasons set forth in HQ 729649, we find that inserting the prescription lenses into the frames to make safety glasses substantially transforms the frames into a new article of commerce. In accordance with 19 CFR 134.35, the optical laboratories who buy the frames from Hudson and insert the prescription lenses into them are the ultimate purchaser of the frames. Consequently, the frames must be marked in accordance with 19 U.S.C. 1304 to inform the optical laboratories, the ultimate purchasers of the frames, of their country of origin.

However, HQ 729649 involved a situation where an employer was buying the safety glasses for its employees and the exception for marking the frames is limited only to situations where an employer is buying safety glasses for its employees. In cases where the employees choose the frames for their own pair of safety glasses, two separate purchasing decisions are being made and analysis of HQ 729649 is not applicable. In such situations, the frames are not excepted from country of origin marking and they must be separately marked to indicate their country of origin to the employee or other individual buying the safety glasses.
Hudson's proposed method of marking the frames by use of hangtags and stickers is acceptable provided that the stickers or hangtags are sufficiently permanent that they will remain on the frames until they reach the ultimate purchaser. See 19 CFR 134.44. In accordance with 19 CFR 134.41, the country of origin marking indicated on the hangtags or stickers must also be conspicuous and legible. However, without seeing a sample of the country of origin marking, we are unable to rule on whether the proposed marking of the frames would satisfy the requirements of the marking law. However, under 19 CFR 134.35, the imported article is excepted from marking and only the outermost container is required to be marked. You should also be aware that the frames or their containers must be marked to indicate their country of origin at time they are imported into the U.S.

HOLDING:

If employers are purchasing the safety glasses for their employees, the optical laboratories that insert the prescription lenses into the frames are the ultimate purchasers of the frames. However, if employees or other individuals decide which frames to buy for their own pair of safety glasses, they are the ultimate purchasers of the frames. The frames must be marked to indicate their country of origin to their ultimate purchasers, at the time of their importation into the U.S. The frames may be marked to indicate their country of origin by hangtags or stickers, as long the hangtags or stickers meet the requirements of being conspicuous, legible, and permanent indicated in 19 CFR 134.41 and 19 CFR 134.44.

Sincerely,

John Durant, Director

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