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HQ 560693




March 6, 1998

MAR-2 RR:CR:SM 560693 JML

CATEGORY: MARKING

Mr. Lawrence R. Pilon
Hodes & Pilon
33 North Dearborn Street, Suite 2204
Chicago, Illinois 60602-3109

RE: Country of origin determination for junior golf set; marking; 19 CFR 102.21(d); substantial transformation.

Dear Mr. Pilon:

This is in reference to your letter of October 8, 1997, submitted on behalf of your client, Tommy Armour Golf Company ("Tommy Armour"), requesting a binding ruling with respect to a junior golf set imported from Taiwan. Specifically, you ask for the country of origin marking requirements for the imported junior golf set.

FACTS:

The facts provided indicate that your client, Tommy Armour, is a manufacturer and supplier of golf equipment. The subject merchandise is the Model 845s Junior Set. It is comprised of the following items:

QUANTITY DESCRIPTION
1 Driver; stainless steel head, graphite shaft 4 Irons (5,7,9,PW); metal head, steel shaft 1 Putter; metal head, steel shaft
1 Golf bag; outer surface of black PVC sheeting 1 Head cover for driver; acrylic fake fur, knit sleeve

The golf clubs will be assembled in Taiwan using (a) heads cast in either Taiwan or the PRC, (b) shafts manufactured in either Korea or the United States, and (c) rubber grips manufactured in Thailand. You state that the entire assembly process for the clubs, including assembly of the head, shaft, and grip, will take place in Taiwan.

The golf bags will be completely manufactured in China. Although the origin of the material(s) incorporated into the golf bags is not specifically identified, for purposes of this ruling we assume those material(s) are of Chinese origin. The head covers will be completely manufactured in Taiwan, although the origin of their constituent material(s) is not identified. For purposes of this ruling, we assume those material(s) are of Taiwanese origin.

After manufacture of the bags, they are shipped in bulk to Taiwan and boxed for retail sale along with the clubs and head covers. The product will then be shipped to Tommy Armour for distribution in the United States. You state that no further packaging, repackaging or manipulation of the product will take place in the United States -- the product will reach its ultimate purchaser in the retail packaging in which it is packaged in Taiwan.

You propose the following country of origin marking to be printed on the retail box:

Golf Clubs and Head Cover Made in Taiwan
Golf Bag Made in PRC

In a ruling you obtained concerning the tariff classification of the Model 845s from the National Commodity Specialist Division, this product was classified under subheading 9506.31.00, Harmonized Tariff Schedule of the United States ("HTSUS") ("[a]rticles and equipment for general physical exercise, gymnastics, athletics, other sports or outdoor games...: [g]olf clubs and other golf equipment; parts and accessories thereof: [g]olf clubs, complete."). See NY C80190, dated October 8, 1997. Although the imported product is commonly referred to as a "golf club set" it is not described in the Harmonized System as a set, or classified as a set pursuant to General Rule of Interpretation 3.

ISSUE:

What are the country of origin marking requirements for the Model 845s?

LAW AND ANALYSIS:

Section 304, Tariff Act of 1930, as amended (19 U.S.C. ?1304), provides that unless excepted, every article of foreign 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 its 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 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. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the exceptions of ?1304. 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 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 Part 134.

A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use which differs from the original material subjected to the process. U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).

On December 8, 1994, the President signed into law the Uruguay Round Agreements Act. Section 334 of that Act (codified at 19 U.S.C. ?3592) provides new rules of origin for textiles and apparel entered, or withdrawn from warehouse, for consumption, on and after July 1, 1996. On September 5, 1995, Customs published Section 102.21, Customs Regulations (19 CFR 102.21), in the Federal Register, implementing Section 334 (60 CFR 46188). Thus, effective July 1, 1996, as a general rule, the country of origin of a textile or apparel product is determined by sequential application of the general rules set forth in paragraphs (c)(1) through (5) of section 102.21, Customs Regulations.

The textile rules of origin are not applicable to all articles containing fabric components, however, but are applicable only to articles classifiable in Chapters 50 through 63, HTSUS, as well as those articles classifiable under the headings or subheadings listed in 19 CFR 102.21(b)(5). We note that in NY C80190, the Model 845s (which includes the head cover and golf bag) was classified under subheading 9506.31.00, HTSUS, which is not included in the list set forth in section 102.21(b)(5), Customs Regulations (19 CFR 102.21(b)(5)). Therefore the textile rules of origin set forth in section 334 of the Uruguay Round Agreements Act, promulgated in section 102.21, Customs Regulations, are not applicable because the Model 845s is not considered to be a textile article for purposes of the application of those rules.

We note that for country of origin marking purposes, the abbreviation "PRC" is not acceptable for articles imported from the People's Republic of China. See Headquarters Ruling Letters ("HRL") 727372, dated March 18, 1985; HRL 730578, dated July 10, 1987. However, the abbreviation "P.R. China," or "China" would be acceptable. See HRL 730578, dated July 10, 1987

Next, the origin of the finished, assembled golf clubs must be determined. You state that the assembly process of the clubs is a common one used throughout the industry. Customs ruled in ORR 824-70, dated August 24, 1970, that a U.S. manufacturer who purchased imported golf club heads, either finished or unfinished, and assembled them with shafts and grips of U.S.-origin into finished golf clubs, was the ultimate purchaser of the imported golf club heads. The ruling stated that if the imported golf club heads were to be used by an original equipment manufacturer, they would be substantially transformed by being assembled with the U.S.-origin shaft and therefore excepted from individual marking. To the same effect were HRL 728213, dated July 3, 1985, and HRL 734136, dated June 17, 1991. See also HRL 735125, dated November 17, 1993, HRL 73442, dated June 28, 1993. In these cases, the golf club assembly operations were performed in the United States, and either the shaft or the club head was of U.S.-origin.

A different conclusion was reached in HRL 734256, dated July 1, 1992, where both of the major components of the club, i.e., the head and the shaft, were of foreign origin. There, Customs stated:
the grips are much less significant components as compared with the heads and shafts and their insertion onto the golf clubs is fairly simple. We believe that the making of the golf club is a simple assembly process of basically finished parts. We note that there is a hole on the top of the head so no drilling is necessary. The combining of the head and shaft is a relatively simple operation which does not take a great deal of time and skill and not a complex assembly. Basically, all that is needed to make the finished club is to insert the shaft into the head and to glue them together.
Consequently, in HRL 734256 the imported components used in the assembly of the golf clubs in the U.S. were not substantially transformed by that process.

In the present case, you present alternative situations where the club heads (i.e. a major component of the clubs), are from either Taiwan (the country of assembly of the clubs) or the PRC. In those situations where the heads of the clubs are of Taiwanese origin, we find similarly to ORR 824-70, dated August 24, 1970, and its progeny, and thus extend the principal espoused in those cases that in assembling golf clubs, where one of the major components of the golf clubs (i.e. the shaft or head) is of the same origin as the country where the assembly of the clubs occurs, the country of origin of the clubs is the country where the assembly is performed. See also HRL 735125, dated November 17, 1993, HRL 73442, dated June 28, 1993. That is, assembly of golf clubs in Taiwan using Taiwanese-origin club heads and imported components results in a substantial transformation of those imported components into products of Taiwan. However, the assembly of golf clubs in Taiwan using all imported components (including the club heads) does not result in a substantial transformation of those components. See HRL 734256, dated July 1, 1992.

Thus, in those situations where the golf clubs and head covers of Taiwanese origin are combined with a golf bag from the PRC and boxed for retail sale, identifying the golf clubs and head covers as being of Taiwanese-origin and the golf bag as of Chinese-origin would be acceptable, assuming the marking is legible, indelible and conspicuously printed on the box, and the product reaches the ultimate purchaser in the United States in that properly marked box. In the situation where the golf clubs are not products of Taiwan, however, the country of origin of each component incorporated into the golf clubs (i.e. head, shaft and grips) must be identified.

HOLDING:

Assembling golf clubs in Taiwan using club heads of Taiwanese-origin and imported shafts and grips, substantially transforms the imported components into products of Taiwan. Accordingly, the country of origin of these assembled golf clubs is Taiwan. In those situations where the club heads, shafts and grips are imported into Taiwan for assembly, the components are not substantially transformed into products of Taiwan. In this situation, the country of origin of each component incorporated into the clubs must be identified.

Thus, the Model 845s Junior Set comprising golf clubs assembled in Taiwan using Taiwanese club heads and covers, and a golf bag made in the PRC, boxed for retail sale in Taiwan would be properly marked by identifying Taiwan as the country of origin of the golf clubs and head covers and China as the country of origin for the golf bag, provided the other requirements of 19 CFR Part 134 are satisfied. In the situation where the golf clubs are assembled in Taiwan from non-Taiwanese-origin components (including the club heads), the origin of each component incorporated into the golf clubs (i.e. heads, shafts and grips) must be identified. For country of origin marking purposes, however, the abbreviation "PRC" is not acceptable for articles imported from the People's Republic of China.

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

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