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HQ 735504




January 6, 1995

MAR 2-05 CO:R:C:S 735504 AT

CATEGORY: MARKING

Randall Montgomery
Aaron J. Wayne
Customs Broker
1200 S. Inglewood Av., #200
Inglewood, CA 90301

RE: Country of origin marking requirements for imported sunglasses, eyeglass cord holder, cloth pouch and wooden box; substantial transformation; ultimate purchaser; containers; 19 CFR 34.35; 19 CFR 134.23; National Hand Tools

Dear Mr. Montgomery:

This is in response to your letter dated January 27, 1994, requesting the appropriate tariff classification and proper country of origin marking requirements for sunglasses, eyeglass cord holder, cloth pouch and wooden box imported from New Zealand. Samples of these items were submitted for review. Your classification request was addressed in HQ 955886 (May 17, 1994). We regret the delay in responding.

FACTS:

You state that the articles to be imported from New Zealand into the U.S. for retail sale consist of a pair of sunglasses, a eyeglass cord holder, a cloth pouch and a wooden box. The sunglasses are assembled in New Zealand from frames and lenses of Hong Kong origin. The words "Dirty Dog" are printed on the sides of the frames. The eyeglass cord holder is assembled in New Zealand from a cord of Bali origin and rubber cord ends (used to grip the eyeglass temples) of Taiwanese origin. The cord measures approximately 23 inches long. The sunglasses and eyeglass cord holder are placed in a blue woven textile bag with a drawstring closure. The bag measures approximately 7 inches by 3 3/4 inches. On the front of the bag is a design representing a dog with the inscription "Dirty Dog". The words "Extreme Eyewear, New Zealand" appear directly below the design in white lettering approximately 27 points (a point is approximately .01384 inch or 1/72 of an inch). The bag, eyeglass cord holder, and sunglasses are packaged in a small wooden box that measures approximately 6 3/4 inches by 2 3/4 inches. The same design and words that are printed on the bag appear on the front cover of the box.

ISSUE:

What is the country of origin marking requirements for the items imported from New Zealand in the manner described above?

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).

Country of Origin Marking Requirements of the Imported Sunglasses:

The country of origin marking requirements for the imported sunglasses that are to be assembled in New Zealand from frames and lenses of Hong Kong origin depends upon whether a substantial transformation occurs in New Zealand as a result of the assembly operation performed there. If the frames and lenses are substantially transformed as a result of the assembly operation, then the country of origin of the finished sunglasses is New Zealand.

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). Whether a substantial transformation occurs is determined on a case-by- case basis. In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linen v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed. Cir. 105, 741 F.2d 1368 (1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, C.S.D.'s 80-111, 89-110, 89-129, 90-51.

In National Hand Tool Corp., v. United States, Slip Op. 92- 61 (April 27, 1992), aff'd, 989 F.2d 1201 (1993), the Court of International Trade held that imported hand tool components which were used to produce flex sockets, speeder handles and flex handles were not substantially transformed when further processed and assembled in the U.S. One of the factors considered by the court in reaching its conclusion was that the name of the imported components did not change as a result of the U.S. processing and assembling operations. The court found that the name of each article imported had the same name in the completed tool. In support of this conclusion, the court cited the following example:

"For example, when the lug or "G-head", component of a flex handle imported from Taiwan (Ex. E) was shown, plaintiff's witness called it a "G-head." When the government counsel asked the name of the part where the lug component is attached to a completed flex handle (Ex. J.), the witness also called it a "G-head."

The court also considered whether the use of the imported components changed as a result of the processing and assembling operations performed in the U.S. In finding that the use of the imported components did not change, the court stated that the use of the imported articles was predetermined at the time of importation due to the fact that each component was intended to be incorporated in a particular finished mechanics' hand tool. Although the court recognized the fact that only one predetermined use of imported articles does not preclude the finding of substantial transformation (See, Torrington Co., v. United States, 764 F.2d. 1563 (1985)), it went on to say that the determination of substantial transformation must be based on the totality of the evidence.

Similarly, based on the totality of the evidence in this case, we find that the frames and lenses of Hong Kong origin are not substantially transformed when they are assembled in New Zealand into finished sunglasses, as the New Zealand operations do not change the name, character or use of the frames and lenses. Although information detailing the assembly operation was not submitted to review, in our opinion, it appears that the frames and lenses of Hong Kong origin are substantially finished articles when imported into New Zealand for assembly. No further processing needs to be performed to the individual frames and lenses in New Zealand, except assembly which appears to be a simple operation which does not constitute a substantial transformation. See, HQ 728504 (October 15, 1985), mere assembly of imported temples and fronts into eyeglass frames does not constitute a substantial transformation. See also, HQ 733883 (February 22, 1991); HQ 734663 (September 4, 1992).

Like the hand tool components in National Hand Tool, the frames and lenses in this case have the same name after assembly. Although each component becomes an essential part of a completed pair of sunglasses, each component is still referred to as a frame or lens after assembly. Thus, none of the components would change in name as a result of the New Zealand operations.

What is critical in ascertaining whether a substantial transformation has occurred is whether, based on the totality of the evidence, there has been a change in the character or use of the article after the processing.

Likewise, as in National Hand Tool, the use of the frames or lenses is predetermined at the time of importation. Each component is intended to be utilized in the manufacture of a finished pair of sunglasses. Clearly, these components do not change in character as a result of the assembly operation. The overall shape, form as well as size of the finished pair of sunglasses is essentially the same as the unassembled frames and lenses of Hong Kong origin. None of these features of the finished pair of sunglasses has changed as a result of the New Zealand assembly operation. After being assembled, the frames and lenses retain their original shape and form. There is no change in the microstructure or chemical composition as a result of the New Zealand processing. See, Ferrostaal Metals Corp., v. United States, 11 CIT 470, 664 F.Supp. 535 (1987). In addition, there is no indication that the assembly operation is complex as all the frames and lenses appear to be fully manufactured when imported into New Zealand so that simple assembly of the sunglasses is possible.

Accordingly, the frames and lenses of Hong Kong origin are not substantially transformed when they are used to produce finished sunglasses in New Zealand. Therefore, the country of origin of the finished sunglasses imported into the U.S., is Hong Kong and the imported sunglasses or its container must be conspicuously, legibly and permanently marked to indicate "Hong Kong" as the country of origin of the sunglasses. Country of Origin Marking Requirements of the Eyeglass Cord Holder:

Like the sunglasses, the country of origin marking requirements for the imported eyeglass cord holders assembled in New Zealand from a woven cord of Bali origin and rubber cord ends of Taiwanese origin depends upon whether a substantial transformation occurs in New Zealand in that the name, character or use of the cord and cord ends changes as a result of being assembled into an eyeglass holder.

Based on the totality of the evidence in this case, we find that the woven cords and rubber cord ends are not substantially transformed when they are assembled in New Zealand into eyeglass cord holders, as the New Zealand operations do not change the name, character or use of the cords and cord holders.

Review of the sample indicates that the woven cords and rubber cord ends are substantially finished articles when imported into New Zealand for assembly. No further processing needs to be performed to the individual cords or cord ends in New Zealand, except assembly, which in our opinion is a simple operation which does not constitute a substantial transformation. The assembly operation involves a simple operation of attaching two rubber cord ends to each end of the cord to make the eyeglass cord holder.

Like the hand tool components in National Hand Tool, the cords and cord ends have the same name after assembly. Although each component becomes an essential part of a completed eyeglass cord holder, each component is still referred to as a woven cord or rubber cord end after assembly. Thus, neither of the components would change in name as a result of the New Zealand operations.

Also, the character and use of the woven cords and rubber cord ends do not change as a result of the assembly operation. The use of the woven cords and cord ends is predetermined at the time of importation. Each component is intended to be utilized in the manufacture of an eyeglass cord holder. Moreover, the character of the cords and cord ends clearly do not change as a result of the assembly operation. The overall shape, form as well as size of the completed eyeglass cord holder is essentially the same as the unassembled cord and cord ends. None of these features of the completed eyeglass holder have changed as a result of the New Zealand assembly operation. After being assembled, the cords and cord ends retain their original shape and form. Although the woven cords and rubber cord ends are not substantially transformed as a result of being assembled into a completed eyeglass cord holder, we find that the country of origin of the completed eyeglass cord holder, is Bali, the country where the woven cord is made. The woven cord clearly imparts the essential character of the completed eyeglass cord holder. The eyeglass cord holder's significant function and use is to be worn around the neck. The woven cord gives the eyeglass cord holder this significant characteristic. Whereas the rubber cord ends only provide a means to attach the glasses to the woven cord. Therefore, the country of origin of the completed eyeglass cord holders imported into the U.S. with the sunglasses, is Bali, and the eyeglass cord holder or its container must be conspicuously, legibly and permanently marked to indicate "Bali" as the country of origin of the eyeglass cord holder.

Country of Origin Marking Requirements of the Cloth Pouch and Wooden Box:

Examination of the sample sunglass package indicates that the cloth pouch and wooden box are to be used as containers for the sunglasses and eyeglass cord holder.

Subpart C of 19 CFR Part 134, which provides for the country of origin marking of containers, recognizes two broad categories of containers. Section 134.23 specifies that reusable containers, which must be individually marked with their country of origin, are either: 1) those usual and ordinary containers designed for or capable of reuse after their contents have been consumed, such as heavy duty steel drums, tanks, and other similar shipping, storage, or transportation containers; or 2) containers which give the whole importation its essential character, having lasting value or decorative use. Section 134.24 provides that disposable containers are the usual and ordinary types of containers or holders, including cans, bottles, paper or polyethylene bags, paperboard boxes, and similar containers or holders which are ordinarily discarded after the contents have been consumed. If a container is considered to be disposable, the container itself is excepted from being marked with its own origin, but it must be marked to indicate the origin of its contents. See, 19 CFR 134.24(d).

We note that General Rule of Interpretation (GRI)5(b) of the Harmonized Tariff Schedule (HTSUS) provides that packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing the goods. This provision does not apply when the packing materials or containers are "clearly suitable for repetitive use". In HQ 955886 (May 17, 1994) Customs ruled that both the cloth pouch and wooden box were classified under subheading 9004.10.0000 since the sunglasses imparted the essential character of the entire sunglass package. In making that determination, we stated that the wooden box was nothing more than packaging material under GRI 5(b) inasmuch as it was not designed for repetitive use. Similarly, in this case, we find that the cloth pouch is not designed for repetitive use. Thus, the cloth pouch and wooden box are considered to be the kind of disposable containers referred to in 19 CFR 134.24(a). Accordingly, the cloth pouch and wooden box are not required to be marked with their own country of origin, but must be marked to indicate the origin of the sunglasses--Hong Kong--and eyeglass cord holder--Bali--in accordance with 19 CFR 134.24(d).

However, because the cloth pouch and wooden box have the words "New Zealand" printed on the front side (pouch) and front cover (box)--an origin other than the contents--the special marking requirements of 19 CFR 134.46 are triggered. That section requires that when the name of any city or locality in the U.S., or the name of any foreign country or locality other than the name of the country or locality in which the article was manufactured or produced, appears on an imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," "Product of," or other words of similar meaning. The purpose of 19 CFR 134.46 is to prevent the possibility of misleading or deceiving the ultimate purchaser as to the origin of the imported article. Accordingly, in order to satisfy the marking requirements of 19 CFR 134.46, the cloth pouch and wooden box must be legibly, permanently and conspicuously marked with the country origin of the sunglasses and eyeglass cord holder in close proximity to the "New Zealand" reference (on the same side), in at least a comparable size lettering (27 points) and preceded by "Made in," "Product of," or other words of similar meaning. Marking the cloth pouch and wooden box with phrase "Sunglasses Made in Hong Kong; Eyeglass Cord Holder Made in Bali" would be an acceptable country of origin marking for the imported cloth pouches and wooden boxes.

We note that provided the sunglasses and eyeglass cord holder are sold with the properly marked cloth pouch and/or wooden box, as described above, the sunglasses and eyeglass cord holder are excepted from being individually marked with their own country of origin. See, 19 CFR 134.32(d). HOLDING:

Frames and lenses manufactured in Hong Kong which are assembled in New Zealand into sunglasses and imported into the U.S. are not substantially transformed as a result of the assembly operation. Accordingly, the imported sunglasses or their containers must be marked to indicate "Hong Kong" as the country of origin of the sunglasses.

Woven cords manufactured in Bali and rubber cord ends manufactured in Taiwan which are assembled in New Zealand into eyeglass cord holders and imported into the U.S. in sunglass packages are not substantially transformed as a result of the assembly operation. Accordingly, for the reasons stated above, the imported eyeglass cord holders or their containers must be to indicate "Bali" as the country of origin of the eyeglass cord holders.

Woven pouches and wooden boxes which are imported from New Zealand into the U.S. are considered to be disposable containers and excepted from being marked with their own country of origin but must be marked to indicate the origin of their contents (sunglasses and eyeglass cord holders) in accordance with 19 CFR 134.24. Because the words "New Zealand" appear on the cloth pouches and wooden boxes, both must be marked in satisfaction of the special marking requirements of 19 CFR 134.46 as described above.

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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