HQ 559253 - Country of origin marking for tachometer; housing; container; - United States International Trade Commision Rulings

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HQ 559253

October 5, 1995

MAR-2-05 R:C:S 559253 MLR

CATEGORY: MARKING

Ms. Donna Williams
VDO Yazaki Corp.
188 Brooke Road
P.O. Box 2897
Winchester, VA 22604

RE: Country of origin marking for tachometer; housing; container;

Dear Ms. Williams:

This is in reference to your letter of June 5, 1995, requesting a ruling concerning the country of origin marking requirements for a tachometer imported from Germany. A sample was submitted with your request.

FACTS:

The article at issue is a tachometer which VDO Yazaki ("VDO") imports into the U.S. from Germany. The sample of the tachometer submitted contains the marking "Made in Germany" molded into the bottom of the tachometer's housing and a label with the marking "Swiss Made" pasted on the side of the tachometer's housing. It is stated that the housing of the tachometer is made in Germany, whereas the tachometer is made in Switzerland. The Port of Baltimore allowed the carton in which the ultimate purchaser receives the tachometer to be labeled "Housing German Made, Tach Swiss Made." However, the port also advised that in the future, the "Made in Germany" reference on the bottom of the tachometer housing should be removed, or that the country of origin label should be placed on the part and not on the container. You wish to continue to mark the container "Housing German Made, Tach Swiss Made" until the Spring of 1996 when this tachometer will be phased out and replaced. In addition, you state that VDO does not open or repack these parts, and they are sold in the carton in which they are shipped. Therefore, you state that it is more efficient to place this label on the container rather than on the tachometer itself.

ISSUE:

Whether it is appropriate to mark the container in which the ultimate purchaser receives the tachometer "Housing German Made, Tach Swiss Made."

LAW AND ANALYSIS:

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) 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. 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(d), Customs Regulations {19 CFR 134.1(d)}, defines "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported. 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. A substantial transformation occurs when articles lose their identity and become new articles having a new name, character or use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940); National Juice Products Association v. United States, 628 F. Supp. 978 (CIT 1986).

In Headquarters Ruling Letter (HRL) 734097, November 25, 1991, Customs ruled that imported terminal video shells (computer terminal housings that contain video electronics, but no logic boards), were substantially transformed in the U.S. when they were processed by the installation of certain key components, such as terminal logic boards, to make them into dumb terminals for certain computer systems. Customs indicated that the addition of the logic boards created a new article. Also, in HRL 732170 dated January 5, 1990, Customs held that a television chassis, containing a tuner, speaker, and circuit board, was substantially transformed into a new and different article of commerce, namely a TV receiver, when a television picture tube, deflection yoke, electron beam bender, degousser coil, and remote control unit were assembled into the chassis. Accordingly, the manufacturer of the TV receiver was the ultimate purchaser of the imported chassis.

In this case, it is stated that the tachometer is made in Switzerland and its housing is made in Germany. Similar to the cases above, and based upon the sample submitted, it is our opinion that the tachometer assembly from Switzerland provides the essential character to the article, and that the housing is substantially transformed by the insertion of the tachometer. Accordingly, the finished tachometer is only required to be marked to indicate its Swiss origin.

However, the finished tachometer contains the marking "Made in Germany" molded into the bottom of the tachometer housing, and a label with the marking "Swiss made" pasted on the side of the housing. Since this tachometer model will be phased out and replaced in the Spring of 1996, and since VDO does not repack the tachometers after they are imported into the U.S., VDO proposes to mark the outside container in which the ultimate purchaser receives the tachometer "Housing German Made, Tach Swiss Made" instead of modifying the mold in order to remove the "Made in Germany" marking.

Customs considered a similar question in HRL 734095 dated February 18, 1992, regarding the country of origin marking of T-Probes from Holland containing two different country of origin markings: (1) a "Made in Holland" marking appearing in large letters on a metal serial plate affixed to the device, and (2) a "Made in USA" marking molded into the plastic housing of the gastroscope component of the T-Probe. The T-Probe was also imported and sold in a carrying case. It was held that since there were two country of origin markings on the T-Probe, it was unclear and ambiguous what the true country of origin was. Therefore, either the "Made in USA" marking had to be obliterated or concealed in some fashion which would provide the ultimate purchaser with a clear and unambiguous indication as to the true country of origin of the T-Probe, or alternatively, an additional explanation could be placed on the serial plate to clarify that the U.S. marking on the gastroscope component only referred to the country of origin of the gastroscope.

Similarly, in this case, either the molded "Made in Germany" reference on the bottom of the housing must be removed or concealed, or an additional label may be placed next to the "Swiss Made" label which clearly indicates that the "Made in Germany" reference only refers to the housing. We suggest that the label placed immediately next to the "Swiss Made" label could read "Housing Made in Germany." As to your suggestion of only marking the container in which the ultimate purchaser receives the tachometer "Housing German Made, Tach Swiss Made," it is our opinion that this will not satisfy the statutory requirements of 19 U.S.C. 1304 since the container is not sealed and the ultimate purchaser may open the container in order to examine the tachometer prior to purchase. However, if the tachometer is imported in a sealed retail container which will remain sealed, it will be sufficient to mark only the container. However, in order to clearly indicate that Switzerland is the country of origin of the tachometer, we suggest that the container be marked "Tachometer Made in Switzerland" [or "Swiss Made"]; "Housing from Germany."

HOLDING:

Based on the facts and sample submitted, the country of origin of the tachometer is Switzerland. However, because the tachometer contains the marking "Made in Germany" molded into the bottom of the tachometer housing, and a label with the marking "Swiss made" pasted on the side of the housing, a clear and unambiguous indication of the tachometer's country of origin is not provided as required by 19 U.S.C. 1304. Therefore, either the "Made in Germany" marking on the bottom of the tachometer's housing must be removed, or a label may be placed immediately next to the "Swiss Made" label which clearly indicates that the "Made in Germany" reference only refers to the housing. Only if the ultimate purchaser receives the tachometer in a sealed container will a marking such as "Tachometer Made in Switzerland" [or "Swiss Made"]; "Housing from Germany" on the container alone be appropriate.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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
Tariff Classification

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