HQ 0734706 - Country of origin marking requirements for trading cards printed on paperboard sheets in the U.S. and cut in Mexico; printing; packaging; 19 CFR 134.1; 19 CFR 134.32(m) - 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 > 1993 HQ Rulings > HQ 0734688 - HQ 0734856 > HQ 0734706

HQ 734706

January 15, 1993

MAR-2-05 CO:R:C:V 734706 RSD

CATEGORY: MARKING

Scott E. Rosenow, Esq.
Stein Shostak Shostak & O'Hara
1620 L Street, N.W.
Suite 807
Washington, D.C. 20036-5605

RE: Country of origin marking requirements for trading cards printed on paperboard sheets in the U.S. and cut in Mexico; printing; packaging; 19 CFR 134.1; 19 CFR 134.32(m)

Dear Mr. Rosenow:

This is in response to your letter dated July 1, 1992, submitted on behalf of your client the Upper Deck Company, requesting a ruling on the country of origin marking requirements for trading cards. We have received a second submission from your office dated July 9, 1992. We have also received samples of the trading cards in sheet form before they are cut and a foil package of the trading cards as prsented for retail sale.

FACTS:

The Upper Deck company currently manufactures sports trading cards for basketball, baseball, football, and hockey, as well as special Warner Brothers Looney Tunes Series called Comic Ball. In the United States, the following operations are performed in the production of the trading cards: player or subject selection, card design, photograph selection, statistical and biographical research, hologram design, card layout, color separation, stripping, press production, coating production, and foil production.

The cards are printed in the United States using a lithographic process on large sheets of paperboard measuring 25.50" x 36.00". Generally, one hundred cards fit on each sheet of paperboard. Each set of cards has a different number of cards. For example, the baseball set is normally 800 cards, while the Comic Ball set is 200. After the cards are printed, but before the coating process, a foil hologram is stamped on each card to eliminate the possibility of counterfeits.

The sheets of cards will be shipped to Mexico where they will be fed into a card-slitting machine which cuts the sheets of cards first horizontally and then vertically, resulting in 100 loose cards. Single cards will be stacked and eventually loaded into a hopper on a conveyor belt. The conveyor belt contains many hoppers which randomly dispense individual cards. The random cards will be then grouped together in packs of 12-15 cards and wrapped in foil packs. The foil packs will be grouped together in a box which usually contains 36 foil packs. The boxes are shrink-wrapped and loaded into a case which usually contains 20 boxes for shipment back to the U.S.

ISSUE:

Are the sheets of printed trading cards substantially transformed in Mexico when they are cut, sorted, and packaged?

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. In such circumstances, the imported article is excepted from marking. The outermost containers of the imported articles shall be marked. (See 19 CFR 134.35).

Under 19 CFR 134.32(m), products of the U.S. which are exported and returned are excepted from the marking requirement of 19 U.S.C. 1304. Accordingly, it is necessary to determine if the uncut paperboard sheets of trading cards are substantially transformed by the processing performed in Mexico. First of all, we note that the vast bulk of the work in producing the trading cards, such as designing and printing of the cards, is done in the United States. At the time they are exported to Mexico, the trading cards are printed on paper board, but they are clearly recognizable as trading cards, and they have all the basic characteristics of trading cards. In Mexico, all that is done to the paperboard sheets of cards is that they are cut, sorted, and packaged. The name, character, and use of the cards are not changed by the Mexican operations. Rather, we find that these operations performed in Mexico: cutting the paper board sheets and the sorting of the cards, are minor finishing operations. See HQ 555241 (July 3, 1989) (the cutting of sheets of self- adhesive office labels on backing paper was not a substantial transformation). Moreover, the packaging of a product has been deemed not to be a substantial transformation. See HQ 733729 (January 2, 1991). Therefore, the trading cards are not substantially transformed in Mexico and remain products of the United States when they return to the U.S. In accordance, with 19 CFR 134.32(m), the trading cards are excepted from the marking requirements of 19 U.S.C. 1304.

HOLDING:

The sheets of uncut trading cards are not substantially transformed by the operations performed in Mexico. The finished trading cards are excepted from marking requirements of 19 U.S.C. 1304 under 19 CFR 134.32(m).

Sincerely,

John Durant, Director

Previous Ruling Next Ruling