HQ 558876 - Country of origin of finger lug casting; substantial transformation; 19 CFR 134.35 - 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 > 1995 HQ Rulings > HQ 558836 - HQ 558982 > HQ 558876

Previous Ruling Next Ruling
HQ 558876

FEBRUARY 28, 1995

MAR-2: CO:R:C:S 558876 BLS

CATEGORY: CLASSIFICATION

Peter L. Flemister, Esq.
Assistant General Counsel
Allied Tube & Conduit Corporation
16100 South Lathrop Avenue
Harvey, Illinois 60426

RE: Country of origin of finger lug casting; substantial transformation; 19 CFR 134.35

Dear Mr. Flemister:

This is in reference to your letter dated October 27, 1994, on behalf of Mueller Co. ("Mueller"), requesting a ruling on the country of origin marking requirements for a ductile iron finger lug casting to be imported from the People's Republic of China.

FACTS:

The casting is used as a fastening mechanism which allows the nuts and bolts to attach a repair clamp around a section of damaged pipe. The casting will be painted and assembled with the clamp upon arrival at your plant. The clamp is the only other component of the completed article, and is itself of U.S.-origin. The casting is never sold by itself, but only with the clamp, as a unit. A sample of the casting and the clamp has been submitted.

ISSUE:

What are the country of origin marking requirements for the imported casting?

LAW AND ANALYSIS:

Section 304 of the Tariff Act, 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 CCPA 297 at 302; C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and 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., 27 CCPA 267 (1940), C.A.D. 98, 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 and only the outermost container of the imported article is required to be amrked. See section 134.35, Customs Regulations (19 CFR 134.35). However, if the process is a minor one which leaves the identity of the article intact, the consumer or user of the article, who obtains the article after the processing, will be regarded as the "ultimate purchaser." 19 CFR 134.1(d)(1) and (2).

In the instant case, therefore, we must examine the assembly operation to determine whether the combining of the clamp and casting constitutes a substantial transformation. The issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff'd, 2 Fed. Cir. 105, 741 F.2d 1368 (1984).

In C.S.D. 85-25 dated September 25, 1984, Customs held that an assembly will not constitute a substantial transformation unless the operation is "complex and meaningful." Customs criteria for determining whether an operation is "complex and meaningful" depends on the nature of the operation, including the number of components assembled and number of different operations involved. A simple, as opposed to a complex, operation, will not result in a substantial transformation. In Headquarters Ruling Letter (HRL) 735506 dated August 26, 1994, we held that a butterfly valve assembled by combining the valve body with a snap ring, rubber gasket, bearing and valve actuator, which was bolted onto the valve body, was a simple and not a complex operation, and did not result in a substantial transformation. In this case, an examination of the article shows that the lug is attached to the clamp by fastening with a simple bolt, an operation less complex than the operation performed in HRL 735506. As in HRL 735506, the lug and clamp do not lose their essential character and identity as the result of this simple combining operation. Nor does the painting operation transform the casting into a new and different article of commerce.

Therefore, we find that Mueller will not be considered the ultimate purchaser of the finger lug casting, and the exception to country of origin marking requirements under 19 CFR 134.35 is not applicable. Accordingly, the casting must be marked to indicate China as the country of origin, in accordance with 19 U.S.C. 1304, as implemented by Part 134 of the Customs Regulations. Merely marking the crates in which the lugs are shipped to the U.S. would not be sufficient for country of origin marking purposes.

HOLDING:

A finger lug casting used in the assembly of a repair clamp will not be substantially transformed by the U.S. processor into a new and different article of commerce. Therefore, the U.S. processor is not considered the ultimate purchaser, and the imported articles must be marked to indicate China as the country of origin in accordance with 19 U.S.C. 1304 and the implementing regulations. Customs officials at the port of entry must be satisfied that such marking will be in compliance with all statutory and regulatory requirements.

A copy of this ruling should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling