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HQ 734679




December 17, 1992

MAR 2-05 CO:R:C:V 734679 LR

CATEGORY: MARKING

J. Andrew Porter, Esq.
Corrent & Marchi
Le Chateau, Suite 300
33 Ouellette Avenue
Windsor, Ontario, Canada
N9A 4J1

Dear Mr. Porter:

RE: Country of origin marking of welding gun manufactured partially in Canada and partially in the United States; assembly; 19 CFR 10.22.

Dear Mr. Porter:

This is in response to your letter dated June 1, 1992, requesting a ruling on behalf of W. Tregaskiss Ltd. of Windsor, Canada, regarding the country of origin marking of a welding gun know as the Tough Gun.

FACTS:

The Tough Gun is a welding gun which consists of thirteen parts. As specified in the submitted brochure, these parts include: the slip-on nozzles; contact tips; copper gas diffuser; nozzle retainer and shock washer; aluminum armored gooseneck; aluminum body; connector cone and cone nut; one piece handle; self cleaning switch and housing; unicable assembly; quick connect power pin; conduit liners; and quick connect block and feeder adaptor system. The function of the various parts is described in the brochure. Some of the parts are made entirely in the U.S. and some entirely in Canada. Others are made partially in each country. No details regarding the manufacture or cost of the various parts were submitted. However, from the brochure, it does not appear that any one part is the main or essential component.

Presently, the Tough Gun is assembled in Canada. You ask whether these products may be marked "Made in Canada of U.S. components". You also indicate that W. Tregaskiss Ltd. is contemplating transferring part of the manufacturing/assembly process to the U.S. and ask whether these products would be considered products of the U.S. for country of origin marking purposes.

ISSUE:

What is the proper country of origin for Tough Guns which are either assembled in Canada or the United States of U.S. and Canadian components?

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 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(b), Customs regulations indicates that the country of origin is 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 transformation in order to render such other country the "country of origin" within the meaning of this part. A substantial transformation occurs when the work or material added changes the name, character or use of the article in question.

Tough Guns Assembled in Canada

The substantial transformation test is not used to determine the marking requirements for imported products which are eligible for importation under Subpart 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS). Subheading 9802.00.80 provides that articles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, are subject to a duty upon the full value of the imported article, less the cost or, if no charge is made, the value of such products of the United States. 19 CFR 10.22 provides that assembled articles entitled to the exemption are considered products of the country of assembly for the purposes of 19 U.S.C. 1304 (whether or not the assembly is a substantial transformation). Customs has determined that under this regulation, the article in question may be marked simply with the name of the country of assembly, or the name of the country of assembly preceded by words such as "Made in" or "Assembled in". The origin of the components may be identified as well. If the product consists entirely of U.S. components, a marking such as "Assembled in from material of U.S. origin" may be used. If some foreign components are used, both the U.S. and foreign components should be identified. See Headquarters Ruling Letter (HRL) 731507, October 17, 1989.

In this case, while no details of the assembly process were furnished, it appears that one or more of the U.S. components of the Tough Gun are eligible for the exemption under subheading 9802.00.80. Based on this assumption, the provisions of 19 CFR 10.22 apply and Canada would be considered the country of origin. Your proposed marking, "Made in Canada of U.S. components" should be modified either to include the fact that some of the components are Canadian or should omit all reference to the origin of the components. Any of the following would constitute acceptable markings: "Canada"; "Made in Canada"; "Assembled in Canada"; "Made (or Assembled) in Canada of U.S. and Canadian components".

If none of the components of the Tough Guns are eligible for importation under subheading 9802.00.80 HTSUS, the marking requirements would hinge on whether or not the Canadian processing substantially transforms the U.S. parts into products of Canada. As explained below, insufficient information has been provided to make a definite determination on that issue.

Tough Guns Assembled in the United States

The Customs Service does not makes determinations regarding products which may be marked "Made in U.S". Those decisions are rendered by the Federal Trade Commission. However, assuming that a foreign product which is to be further manufactured in the United States is substantially transformed by such manufacturing, the Customs Service regards such manufacturer as the ultimate purchaser. In such case, the imported product itself need not be marked with its country of origin so long as the container in which it is imported is marked and Customs is satisfied that this marked container will reach the ultimate purchaser unopened. See 19 CFR 134.35

Based on the information submitted we cannot determine definitely whether the assembly/manufacturing processes which you contemplate in the United States would constitute a substantial transformation so as to render Tregaskiss Ltd. the ultimate purchaser. Further details about the various parts, including their method and cost of manufacture, and details about the assembly/manufacturing process to be performed in the United States would be required. If you would like to pursue this matter further, we suggest that describe in detail each step which occurs in the manufacture of the Tough Gun and provide relevant cost information.

HOLDING:

Assuming that one or more of the components of the Tough Gun assembled in Canada from U.S. and Canadian components is eligible for importation under subheading 9802.00.80, HTSUS, the marking "Made (or assembled) in Canada from U.S. and Canadian components" or any of the other markings indicated above would satisfy the requirements of 19 U.S.C. 1304.

Sincerely,

John Durant, Director

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