HQ 735537 - Country of origin marking for Serengeti sunglasses; Substantial transformation; HRL 733654; HRL 733655; HRL 731757; 19 C.F.R. - United States International Trade Commision Rulings

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HQ 735537

September 20, 1994

MAR-2-05 CO:R:C:S 735537 DEC

CATEGORY: MARKING

Ms. Lisa Levaggi Borter
Adduci, Mastriani, Schaumberg & Schill
330 Madison Avenue - 39th Floor
New York, New York 10017

RE: Country of origin marking for Serengeti sunglasses; Substantial transformation; HRL 733654; HRL 733655; HRL 731757; 19 C.F.R.

Dear Madam:

This is in response to your letter dated January 10, 1994, on behalf of your client, Serengeti Eyewear, a division of Corning Incorporated, requesting a ruling on the country of origin marking requirements for sunglasses.

FACTS:

Serengeti Eyewear ("Serengeti"), a division of Corning Incorporated, has submitted various samples of sunglasses and sunglass lenses. Serengeti requests a country of origin ruling with respect to four variations of production scenarios. The first scenario will entail United States lens blanks that will be exported to Japan for further processing and assembly into frames. While the lenses are in Japan, they will be ground and polished. In addition, the lenses will undergo a proprietary firing process and finishing operations which include cutting, edging, tempering, and vacuum coating with an anti-reflective substance. The lenses will be inserted into frames which are made in either Japan, France, Italy, or Hong Kong prior to being imported into the United States.

The second scenario will entail United States made glass "fronts" (lens blanks that have been ground, polished, and fired) that will be sent to France to be manufactured into Strata polarizing lenses through a series of processes involving cutting, edging, tempering and vacuum coating with an anti-reflective substance. These lenses will be inserted into Japanese frames in France and then imported into the United States.

The third scenario will involve the assembly of finished sunglasses in the United States from imported components. United States lens blanks will be sent to Japan for grinding, polishing, and a proprietary firing process. The lenses will be returned to the United States for finishing operations which include cutting, edging, tempering, and vacuum coating. Finally, the lenses will be inserted into their respective frames which will be products of France, Italy, or Hong Kong.

The fourth scenario will entail the completion of the sunglasses in the United States. The frames will be the product of either France, Italy, or Hong Kong and imported into the United States for assembly into finished sunglasses. The United States manufactured lens blanks will be sent to Japan for grinding and polishing. Once returned to the United States, the lenses will undergo the proprietary firing process as well as the cutting, edging, tempering, and vacuum coating operations. Finally, the lenses will be inserted into the various imported frames.

ISSUE:

1. What are the proper country of origin marking requirements for the finished sunglasses that are assembled abroad (first and second scenarios)?

2. What are the country of origin marking requirements for imported lenses and frames which are to be assembled in the United States into finished sunglasses (third and fourth scenarios)?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States 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, 302 (1940).

Part 134 of the Customs Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C. ?1304. Section 134.41(b), mandates that the ultimate purchaser in the United States must be able to find the marking easily and read it without strain.

Section 134.1(d), Customs Regulations, provides that the "ultimate purchaser" of an imported article is generally the last person in the U.S. to receive the article in the form in which it was imported. In addition, that section provides that a manufacturer may be the ultimate purchaser of an imported United States article if he subjects it to a process which results in a substantial transformation of the article.

"Country of origin" is defined in section 134.1(b), Customs Regulations, as
the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transforma- tion in order to render such other country the "country of origin" within the meaning of this part.

A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. Torrington Co. v. United States, 764 F.2d 1563, 1568 (Fed. Cir. 1985), citing Texas Instruments, Inc. v. United States, 631 F.2d 778, 782 (C.C.P.A. 1982), and Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556 (1908).

Customs has previously determined that unlike prescription eyewear where ultimate purchasers make a separate purchasing decision regarding the frames alone, purchasers of over-the-counter sunglasses make their decision while inspecting frames and lenses already combined. Headquarters Ruling Letter ("HRL") 731757, dated February 23, 1990. Customs has ruled that the insertion of U.S.-origin non-prescription lenses into sunglass frames that were assembled in Mexico from U.S. components constitutes a substantial transformation. The frames which were combined with the lenses in the United States are known as sunglasses. This finished article is a new article of commerce with a different name, a very specific use, and a change in character from the frames alone. HRL 733654, dated October 29, 1990.

The first process that Serengeti presents, involving United States sunglass lens blanks which are to be shipped to Japan for further processing and inserted into sunglass frames, constitutes a substantial transformation. Consequently, the country of origin of these articles will be Japan and when imported they must be marked accordingly.

Similarly, the second process Serengeti presents entails the insertion of United States finished sunglass lenses into sunglass frames in France after further processing of the lens fronts (the lenses that have been ground, polished, and fired). In this case, the country of origin of these articles will be France, and therefore, when imported, they must be marked accordingly.

The third situation which Serengeti presents involves United States manufactured lens blanks being sent to Japan to be grounded, polished, and fired. The lenses are then to be returned to the United States for further processing and assembly into frames from France, Hong Kong, or Italy. Similarly, the fourth situation presented involves United States manufactured lens blanks being sent to Japan to be grounded and polished. The lenses are then to be returned to the United States for firing, further processing, and assembly into frames imported from various countries.

Section 134.35, Customs Regulations (19 C.F.R. ?134.35(a)), states that
the manufacturer or processor in the United States who converts or combines the imported article into the dif- ferent article will be considered the "ultimate purchas- er" of the imported article within the contemplation of section 304(a), Tariff Act of 1930, as amended (19 U.S.C.
?1304(a)), and the article shall be excepted from marking.
The outermost containers of the imported articles shall be marked in accord with this part.

Customs has concluded that the combining of non-prescription sunglass lenses and frames after further processing of either the lenses or frames results in a substantial transformation. See HRL 731757, HRL 733654, and HRL 733655, dated November 1, 1990. Therefore, Serengeti, who will assemble the lenses and frames in the United States, will be the ultimate purchaser of the sunglass component parts. Consequently, section 134.35(a) is applicable and the lenses and frames would be excepted from individual country of origin marking. The outermost containers of the imported components must be properly marked with their respective countries of origin.

HOLDING:

1. The sunglasses will undergo a substantial transformation in the country in which the lenses are further processed and inserted into the frames. Therefore, in regard to the first scenario, the finished sunglasses must be marked to indicate Japan as the country of origin, while in the second scenario, the glasses must be marked to indicate France as the country of origin.

2. Since the imported lenses and frames described in the third and forth scenarios will undergo a substantial transformation in the United States, Serengeti will be the ultimate purchaser and the articles are excepted from country of origin marking. Customs will require that the outermost containers in which these component parts are imported to be marked with their respective country of origin.

Sincerely,

John Durant
Director, Commercial Rulings Division

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