HQ 0735319 - Country of origin marking of Water Valves; Substantial Transformation. - 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 > 1994 HQ Rulings > HQ 0735275 - HQ 0735473 > HQ 0735319

HQ 735319

February 9, 1994

MAR-2-05 CO:R:C:V 735319 RC

CATEGORY: MARKING

Mr. John A. Slagle
Barthco International, Inc.
7575 Holstein Avenue
Philadelphia, Pennsylvania 19153

RE: Country of origin marking of Water Valves; Substantial Transformation.

Dear Mr. Slagle:

This is in response to your letters of August 23, 1993, requesting a ruling on the country of origin marking requirements for foreign-manufactured components of water valves. You submitted photographs of the components in a subsequent letter dated December 6, 1993. We regret the delay in responding.

FACTS:

Your client, Mueller Company, contemplates importing a component for a new valve. The component, the gate or disc, is an iron casting manufactured in Brazil. The casting is encapsulated in Costa Rica with rubber for sealing the valve during closure. Mueller imports the encapsulated disc into the U.S. where it is assembled into a water flow valve.

ISSUE:

Whether the foreign-manufactured disc undergoes a substantial transformation for purposes of 19 U.S.C. 1304 and Part 134?

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) 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.

The country of origin for marking purposes is defined by section 134.1(b), Customs Regulations (19 CFR 134.1(b)), to mean the country of manufacture, production, or growth. 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" for marking purposes. An article used in manufacture resulting in a new article having a different name, character, or use will be considered substantially transformed.

Customs has addressed this particular issue with regard to valves in several analogous or on point rulings. See HQ 731828 (January 30, 1990); HQ 729335 (April 18, 1986); HQ 729962 (November 18, 1986). In these cases, Customs found that the imported components underwent a substantial transformation as a result of the domestic processing. Likewise, here, we find that the Brazilian cast disc undergoes a substantial transformation by the U.S. processing.

HOLDING:

For purposes of 19 U.S.C. 1304 and Part 134, the Brazilian cast disc does not undergo a substantial transformation by the rubber coating in Costa Rica. However, it does undergo a substantial transformation by its processing in the U.S. which results in a water valve. As such, the country of origin of the disc is not required to be shown on the finished water valve, as the Mueller Company is the ultimate purchaser of the disc. Pursuant to 19 CFR 134.35, the container in which the disc reaches Mueller must be marked with the country of origin of the disc. Please note that if you wish to indicate that the finished water valve is "Made in USA", the marking must comply with the requirements of the Federal Trade Commission (FTC). We suggest that you direct any questions on this aspect of the issue to the FTC.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling