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HQ 735481





April 20, 1995

MAR 2-05 R:C:S 735481 AT

CATEGORY: MARKING

Mr. Tu A. Bui
Fuji Copian Corporation
P.O. Box 1118
Winnsboro, South Carolina 29180

RE: Country of origin marking requirements for imported cassette parts assembled in the U.S.; substantial transformation; ultimate purchaser; 19 CFR 134.35; C.S.D. 91-17

Dear Mr. Bui:

This is in response to your letters dated January 7, 1993, and January 23, 1995, concerning the country of origin marking requirements for cassette parts imported from the United Kingdom and Japan that are to be assembled with domestic parts in the U.S. into finished printer cassettes for a specific dot matrix printer. Samples of the imported parts and finished printer cassette, and additional information detailing the U.S. operations were submitted with your letters. By letter dated March 20, 1995, you withdrew your confidentiality request of January 23, 1995. We regret the delay in responding.

FACTS:

You state that Fuji intends to import unassembled cassette parts which are made in the United Kingdom and Japan into the United States. Once imported, Fuji further processes and assembles the imported parts with other domestic parts (tension spring, special pigmented ink) into finished dot matrix printer cassettes. The finished cassette is designed to be used with a specific dot matrix (pin impact) printer. The main use of the finished cassette in conjunction with a specific dot matrix printer is to print letter characters seen typically in word processing and graphical presentation. You advised that the U.S. processing consists of the following operations: The cassette is preassembled with the spring, wick and absorbent. Thereafter, the absorbent is impregnated with a special U.S. manufactured ink; then the seamless man-made nylon fabric is placed into the cassette and rewound on a specially fitted rewinder to feed all the fabric into the cassette housing. The base cassette is then pressed together with a cover. Subsequently, an alpha numeric lot number is stamped onto the cassette for ease of traceability. Finally, the assembled cassette is placed into a poly bag and packaged in individual preprinted boxes and thereafter, a ten count outer carton.

You also state that the cost of the imported cassette parts as compared to the total manufacturing cost of the finished printer cassettes is approximately 49 percent.

You contend that the imported cassette parts are substantially transformed as a result of the U.S. assembly operation and, thus, the finished printer cassettes are of U.S. origin. You also inquire as to whether it is acceptable to mark the finished printer cassettes with the phrase "Made in U.S.A".

ISSUE:

1. What are the country of origin marking requirements for imported cassette parts which are to be used in the production of finished printer cassettes in the U.S. in the manner described above?

2. Whether it is acceptable to mark the finished printer cassettes with the phrase "Made in U.S.A."

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). The country of origin marking requirements for the imported cassette parts that are to be further processed and assembled by Fuji in the U.S. depends upon whether Fuji is the ultimate purchaser of the imported parts.

The "ultimate purchaser" is defined generally as the last person in the U.S. who will receive the article in the form in which it was imported. See, 19 CFR 134.1(d). If an imported article will be used in domestic manufacture, the manufacturer may be the "ultimate purchaser" if he or she subjects the imported article to a process which results in a substantial transformation of the article. However, if the manufacturing process is a minor one which leaves the identity of the imported 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).

For country of origin marking purposes, a substantial transformation occurs when an article loses its identity and becomes a new article having a new name, character or use. United States v. Gibson-Thomsen Co., 27 CCPA 267 (1940); National Juice Products Association v. United States, 10 CIT 48 (1986). Under this principle, the manufacturer or processor in the U.S. who converts or combines the imported article into a different article will be considered the "ultimate purchaser" of the imported article, and the article shall be excepted from marking. However, the outermost container of the imported article must be marked (See, 19 CFR 134.35). Whether a substantial transformation occurs is determined on a case-by-case basis.

The issue involved in this case is whether the imported cassette parts which are processed as described above in the U.S. to form a finished printer cassette are substantially transformed into a new article having a new name, character or use.

In HQ 734923 (May 14, 1993), Customs ruled that imported components of a door lockset, the rosettes and parts of the latch, were substantially transformed when they were assembled together with U.S. components in the U.S. to make finished door lockset. Customs stated that, although assembly of the imported rosettes with the other U.S. components of the lockset was not especially complex, the door lockset, is a distinct article with a name, character, and use which is different from its individual components. Rather than being a collection of individual components, when it is fully assembled, the door lockset functions as one unit, a door opening and closing security device. Thus, Customs concluded that the character of the imported rosettes is changed as they become part of this unit, and they do not remain separate articles after being assembled into the finished article. Similarly, in this case, we find that the imported cassette components that are assembled in the U.S. into finished printer cassettes are substantially transformed as a result of the assembly operation. Like the imported components in HQ 734923, the imported cassette components do not have any independent function or a separate commercial use other than to be combined with U.S. components into a finished printer cassette. Since no single one of the imported components imparts the essential character to the finished cassette, the character of each of these component is changed as they become part of the finished article. The finished printer cassette is a distinct article with a name, character, and use which is different from its individual components. Thus, the imported cassette components are substantially transformed in the U.S. as a result of being assembled with U.S. components into printer cassettes. Accordingly, the ultimate purchaser of the imported cassette components is Fuji and the imported components are excepted from individual country of origin marking. Only the outermost containers in which the cassette components are imported must be marked to indicate the country of origin of the components (the United Kingdom or Japan).

Finally you indicate in your submission that Fuji wants to mark the finished printer cassettes with the phrase "Made in U.S.A.". The Customs Service does not have the authority to approve such a marking. If a phrase such as "Made in the U.S.A." is proposed to be marked on the finished printer cassettes, we advise you to contact the Federal Trade Commission (FTC), Division of Enforcement, 6th & Pennsylvania Avenue, NW, Washington D.C. 20508, before Fuji undertakes to mark its finished product in that fashion, since use of the phrase "Made in U.S.A." is under the FTC's jurisdiction.

HOLDING:

Imported unassembled cassettes parts which are made in the United Kingdom and Japan which are used by Fuji to produce finished dot matrix printer cassettes in the U.S. in the manner described above, are substantially transformed as a result of the U.S. operations. Accordingly, the ultimate purchaser of the imported cassette components is Fuji and the imported components are excepted from individual country of origin marking. Only the outermost containers in which the cassette components are imported must be marked to indicate the country of origin of the components (the United Kingdom or Japan). A copy of this ruling letter 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

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