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HQ 735595




August 2, 1994

MAR-2-05 CO:R:C:S 735595 DEC

CATEGORY: MARKING

Ms. Lori J. Levy
Sharretts, Paley, Carter & Blauvelt, P.C. Sixty-seven Broad Street
New York, New York 10004

RE: Country of origin marking for cast bronze figurines; Painting;
Substantial transformation; HRL 729308; T.D. 89-21; HRL 732964;
19 C.F.R. ?134.32(m)

Dear Madam:

This is in response to your letter dated March 9, 1994, concerning the proposed country of origin markings for United States purchased cast bronze figurines.

FACTS:

Goebel Incorporated of Pennington, New Jersey plans to manufacture various cast bronze figurines in the United States. The figurines will be subject to a priming process before export to Korea where they will be painted. Upon completion of the painting process, the figurines will be shipped back to the United States to be packaged for retail sale.

ISSUE:

Whether the painting of cast bronze figurines in Korea constitutes a substantial transformation of the imported articles for purposes of the country of origin requirements of 19 U.S.C.

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 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 (CCPA 1982), and Anheuser-Busch Brewing Ass'n v. United States, 207 U.S. 556 (1908).

In this case, the only issue for consideration is whether the painting of the bronze figurines in Korea effects a substantial transformation. Counsel has correctly cited substantial precedent supporting a finding that painting under similar circumstances does not constitute a substantial transformation. In Headquarters Ruling Letter 729308, dated August 12, 1988 (C.S.D. 88-23), Customs concluded that the painting of earrings in Canada did not result in a substantial transformation. In another case, Customs concluded that imported ceramic "bisque ware" was not substantially transformed by a domestic hand painting operation. Headquarters Ruling Letter 732964, dated August 3, 1990.

In Treasury Decision 89-21, 23 Cust. Bull. 157 (1989), which Customs issued as a result of Madison Galleries, Ltd., v. United States, 688 F. Supp., 1544 (CIT 1988), aff'd, 870 F.2d 627 (Fed. Cir. 1989), Customs stated that the mere decoration of a porcelain article does not constitute a substantial transformation. Despite the Court of International Trade's finding with respect to that particular article, Customs does not regard Madison Galleries as establishing a rule of law for country of origin marking purposes. In T.D. 89-21, Customs stated that

[t]he court's conclusion that the mere decoration of porcelainware constitutes a substantial transformation runs counter to a substantial line of administrative rulings issued by this agency. However, because this secondary determination was unnecessary to an adjudication of the essential issue of the case i.e., whether the porcelainware was entitled to duty-free entry under GSP, it is considered dicta . . . The Customs
Service continues to adhere to its position that the mere decoration of porcelainware does not constitute a substantial transformation.

Based on the above determinations, we are of the opinion that the painting of the bronze figurines in Korea does not change the name, character, or use of the figurines in question. Section 134.32(m), Customs Regulations, provides that products of the United States that are exported and returned are excepted from the marking requirements.

HOLDING:

The painting of the United States made bronze figurines in Korea does not constitute a substantial transformation. Accordingly, the United States made figurines are excepted from marking pursuant to 19 C.F.R. ?134.32(m).

Sincerely,

John Durant

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