HQ 0731363 - Country of origin marking requirements for a router bit - United States International Trade Commision Rulings

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HQ 731363

January 1, 1989

MAR-2-05 CO:R:C:V 731363 jd

CATEGORY: MARKING

Mr. Patrick J. Mulligan
Black & Decker (U.S.) Inc.
U.S. Transportation Group
626 Hanover Pike
Hampstead, Maryland 21074

RE: Country of origin marking requirements for a router bit

Dear Mr. Mulligan:

This is in response to your letter of April 7, 1988, concerning the country of origin marking requirements for a router bit your company will be distributing in the U.S.

FACTS:

According to your submission, Black & Decker will be purchasing a router bit from a subsidiary company located in Wisconsin. That subsidiary will be assembling and packing a router bit from the following components: a carbide blade from Israel, an arbor, nut and washer from the U.S. and a bearing from Italy.

The sample router bit and package we examined had the following marking: on the shank of the bit, "B&D" on one line and "30450" on another line; on the bearing, "S [or possibly 5] KF ITALY C" on one line and "608 - 2 Z" on another line. The plastic tube carrying the bit bears a label reading, in pertinent part, "THE Black & Decker MFG CO. TOWSON, MD 21204, U.S.A." You state your belief that the marking is proper because the highest valued component, the carbide blade, is made in Israel.

ISSUES:

Are parts imported for use in the manufacture of router bits substantially transformed by such manufacture so as to make the importer/manufacturer the ultimate purchaser of the parts for country of origin marking purposes?

If one of these parts is marked with its country of origin in a location that will remain visible after its assembly into the finished product and the country of origin of the part is not the country of origin of the finished product, does this violate country of origin marking laws? LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that every article of foreign origin (or its container) imported into the United States 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 United States the English name of the country of origin of the article.

Section 134.35, Customs Regulations (19 CFR 134.35), provides that an article used in the U.S. in manufacture which results in an article having a name, character, or use differing from that of the imported article will be considered substantially transformed, and therefore the manufacturer or processor in the U.S. who converts or combines the imported article into the different article will be considered the ultimate purchaser of the imported article within the contemplation of 19 U.S.C. 1304(a). Accordingly, the article shall be excepted from marking. However, in accordance with 19 U.S.C. 1304(b) and { 134.22, Customs Regulations (19 CFR 134.22), the outermost container of the imported article shall be marked to indicate the country of origin of the article.

Section 134.14, Customs Regulations (19 CFR 134.14), states that when an imported article is of a kind usually combined with another article after importation but before delivery to an ultimate purchaser and the name indicating the country of origin of the article appears in a place so that the name will be visible after such combining, the marking shall include, in addition to the name of the country of origin, words or symbols which shall clearly show that the origin indicated is that of the imported article only and not that of any other article with which the imported article may be combined after importation.

It is the opinion of this office that a carbide blade and bearing are substantially transformed by their assembly into a finished router bit. The imported parts lose their separate identities when combined with several U.S. components and the resulting finished product has a name, character and use distinct from any of the component pieces. Accordingly, the U.S. manufacturer is the ultimate purchaser of the imported pieces and the router bit is a product of the U.S. for country of origin marking purposes.

The bearing marked "ITALY", which is one of the component pieces of the finished router bit, is in violation of 19 CFR 134.14. The word "ITALY" remains visible after combination with the other components and gives the impression that the entire bit is a product of Italy. If bearings used in the manufacture of finished router bits continue to carry the word "ITALY", additional marking must be added to indicate that the marking indicates the origin of the bearings only. Alternatively, the word "ITALY" could be removed from the bearing since the U.S. manufacturer is the ultimate purchaser of the bearing. In this case it would be necessary to mark the country of origin on the outer container of the bearings reaching the manufacturer.

In regard to your belief that the router bit is properly marked because the highest valued component, the carbide blade, is made in Israel, we have the following comments. First, the marking on the bearing which is the only marking visible on the sample reads "ITALY", not Israel, so we fail to see how that is proper marking. Secondly, the value of a component part used in an article subject to a marking determination is but one factor considered in the totality of the circumstances. Other factors considered include the physical change in the article as a result of manufacturing or processing operations, the time involved in manufacturing or processing, the complexity of the operations and the degree of skill involved.

We are aware that in some instances Black & Decker imports finished, or essentially finished router bits. For example, we have recently ruled on importations by Black & Decker of router bits and screw driver bits through the Port of Baltimore. For your information, here are the marking requirements applicable to importations of rotary metal cutting tools (i.e., tools for hand tools or machine tools which are designed to be fitted to such tools and which cannot be used independently and include tools for pressing, stamping, drilling, tapping, threading, boring, broaching, milling, cutting, dressing, mortising or screw-driving of the kind classified in items 649.43, 649.44 and 649.46, Tariff Schedules of the United States) which will not undergo any substantial transformation in the U.S. Rotary metal cutting tools of greater than 3/16" diameter, imported in an insubstantial container or in bulk, must be individually marked to show country of origin notwithstanding the fact that they are or will be packaged in a container showing the origin of the tool. An exception to individual marking is available only in the case of rotary metal cutting tools imported in containers that are virtually certain to reach ultimate purchasers in the U.S., such as sealed index storage boxes. (See T.D. 84-214, copy attached.)

HOLDING:

The imported carbide blade and bearing are substantially transformed by their assembly with other components into a finished router bit. Accordingly, the finished router bit is considered a product of the U.S. and is not subject to country of origin marking requirements. However, a bearing used in the assembly process which is marked as to its country of origin in such a place that the marking remains visible after assembly must be marked to show the place indicated is the origin of the bearing only, or alternatively can be unmarked since it is substantially transformed by the manufacturer.

Sincerely,

John Durant
Director

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