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HQ 559912

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March 25, 1997

MAR-2-05 RR:TC:SM 559912 KR

CATEGORY: MARKING

Lisa C. Schneider
Associated Customhouse Brokers, Inc.
Water Tower Park
1099 Jay Street, Bldg. C-5
Rochester, NY 14692-2670

RE: Country of Origin Marking for Components of a Microscope

Dear Ms. Schneider:

This is in response to your letter dated June 17, 1996, on behalf of Leica, Inc., requesting a ruling regarding the country of origin marking requirements for imported components of a microscope. We regret the delay in responding.

FACTS:

Leica, Inc. packages and sells components of a microscope to customers in the U.S. who will assemble the components into a complete microscope. You state that the microscope body is made in China, and after importation is packaged in a styrofoam packing frame with the remaining components necessary to assemble a complete microscope. The body is sometimes also sold separately as a replacement part, in which case it may be shipped in its own box or may be packed together with other ordered parts. You state that the majority of the components are made in China. The eyepiece and an occasional objective are made in Japan. You wish to know if the microscope body must be marked with its country of origin or if the container of the entire set of components may be marked with only one country of origin. If the microscope body is being sold as a spare part, you ask if it may be marked by an adhesive label on the styrofoam packing frame rather than on the body itself. A copy of the installation instructions which depicts the unit and the name of each component was submitted for our review.

ISSUE:

What is the appropriate country of origin and marking of the microscope components and the microscope body.

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 134.35(a), Customs Regulations (19 CFR 134.35(a)), states that the manufacturer or processor in the U.S. who substantially transforms the imported articles into articles having a new name, character or use will be considered the ultimate purchaser of the imported article within the scope of 19 U.S.C. 1304. In such cases, the article will be excepted from marking, although the outermost container in which the articles are transported to the U.S. processor must be marked with the origin of the articles.

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); Koru North America v. United States, 12 CIT 1120, 701 F. Supp. 229 (1988).

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 Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff'd, 2 Fed. Cir. 105, 741 F.2d 1368 (1984). However, if the manufacturing process is merely a minor one which leaves the identity of the imported article intact, the consumer or user of the article after the processing, will be regarded as the "ultimate purchaser." 19 CFR 134.1(d)(2). In Uniroyal, Inc., v. U.S., 542 F. Supp. 1026, 3 CIT 220 (CIT 1982), imported shoe uppers combined with domestic soles in the U.S. were held to be the "essence of the completed shoe" and therefore, not substantially transformed.

In the instant case, we do not find that the packaging of the components together by Leica constitutes a substantial transformation since the unassembled components do not become an integral part of a new article. The foreign components retain their own identity. The installation instructions picture each piece individually and refer to each piece with its imported name and part number. Accordingly, the country of origin of each components must be indicated on each component or on the outermost container in which these articles will reach the customers who assemble the microscopes. If only few components are not products of China, you may individually list the products which are not products of China and then state "All other parts are made in China".

If the microscope body is shipped as a spare part, and the microscope body has its own styrofoam frame which is distinct from the packaging of any other included parts, then marking the styrofoam with the country of origin of the microscope body is acceptable.

HOLDING:

The components imported by Leica, Inc. for a microscope are not substantially transformed by being packaged together. Therefore, the individual country of origin of each component must be marked either on the components or on the container in which the components will reach the ultimate purchaser in the U.S. If the microscope body is shipped as a spare part, the styrofoam packing containing the microscope body may be marked by using an adhesive label on the styrofoam, as long as any other parts with a different country of origin have separate packing which will be marked with that part's country of origin.

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.

Sincerely,

John Durant, Director
Tariff Classification Appeals
Division

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