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HQ 225203

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June 29, 1994

WAR-3-01-CO:R:C:E 225203 AJS

CATEGORY: WAREHOUSES

Ms. Margaret R. Polito
Neville, Peterson & Williams
80 Broad Street
New York, NY 10004

RE: 19 U.S.C. 1562; Country of origin marking in a bonded warehouse; Tropicana Products, Inc. v. U.S.; Bonded Warehouse Manual; HQ 734282.

Dear Madame:

This is in further reply to our letter of February 22, 1994, concerning operations in a bonded warehouse. Our initial response to this matter was under case number 224960.

FACTS:

Your client proposes to import wearing apparel without a country of origin label, or a label which states "Made In _____." The apparel will be entered into a Class 8 bonded warehouse, where country of origin labels will be sewn into the apparel, or the phrase "Made In ______" will be completed by indelibly stamping the word "Country A" at the end of this phrase.

ISSUE:

Whether the described operations are permissible in a bonded warehouse.

LAW & ANALYSIS:

19 U.S.C. 1562 provides that imported "merchandise may [with Customs' permission and supervision] be cleaned, sorted, repacked, or otherwise changed in condition, but not manufactured, in bonded warehouses." See also 19 CFR 19.11.

The Court of International Trade (CIT) discussed the meaning of the term "manufactured" as it relates to section 1562 in Tropicana Products, Inc. v. United States, Slip Op.

92-35 (March 16, 1992), Cust. Bull & Dec., Vol. 26, No. 16, p. 57 (April 15, 1992). The CIT stated that while the term "manufactured" commonly connotes a "transformation" of an import to a "new and different article", for purposes of section 1562 a low threshold of transformation satisfies the meaning of "manufactured." Tropicana at 62. The CIT referred to the evident legislative intent of the statute to permit only very minor or rudimentary manipulations in bonded warehouse-akin to the exemplars (cleaning, sorting and repacking). Id.

In this instance, wearing apparel will be admitted into a bonded warehouse so that the country of origin may be placed on the apparel. This type of operation is similar to labeling. The labeling of merchandise in a bonded warehouse is a permissible manipulation. Bonded Warehouse Manual, p. 6-1 (August 1990); See also HQ 224957 (November 12, 1993); Treasury Decision (T.D.) 43772. In addition, Customs has previously stated that merchandise may be entered into a bonded warehouse so that it may be legally marked. HQ 734282 (February 10, 1992). Therefore, we conclude that the subject operation is a permissible manipulation under section 1562.

HOLDING:

The labeling of wearing apparel with the proper country of origin in a class 8 bonded warehouse is a permissible manipulation pursuant to 19 U.S.C. 1562.

The Value and Marking Branch will respond to your questions concerning the proposed marking of the subject merchandise.

Sincerely,

John Durant, Director
Commercial Rulings Division

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