HQ 560803 - Country of origin determination for golf club putter assembled in the United States with a foreign made head; 19 CFR 134.1(b); 19 CFR 134.35(a) - United States International Trade Commision Rulings

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HQ 560803

May 5, 1998

MAR-2 RR:CR:SM 560803 RSD

CATEGORY: MARKING

Mr. Dennis A. Dutson
Scalpel Golf Company
2400 S. Garfield Street
Denver, Colorado 80210

RE: Country of origin determination for golf club putter assembled in the United States with a foreign made head; 19 CFR 134.1(b); 19 CFR 134.35(a)

Dear Mr. Dutson:

This is in response to your letter of January 7, 1998, requesting a country of origin determination for a golf club putter which will be assembled in the United States with a head made in Taiwan.

FACTS:

The product for which you are seeking a country of origin determination is a golf club putter. The golf club putter will be assembled in the U.S. using the following components and materials:

Grip, leather or rubber
Two sided tape
Graphite or steel shaft
Club head
Ferral
Epoxy
Lead tape
Grip solvent
Acetone

All of these components and materials are made in the U. S. with the exception of the club head which is made in Taiwan.

You indicate that the assembly of a golf club putter consists of a ten step process which you describe as follows:

1. The shaft is cut to length and sanded at the tip to ensure proper fit.

2. A ferral is pounded onto the shaft 1 3/8 inches from the tip of the shaft.

3. The club head is tapped (drilled out), expanding the hosel entrance.

4. The club head is wiped down and polished.

5. A two-part epoxy is mixed and poured into the hosel of the golf club head.

6. The sanded down tip end of the shaft is placed in the hosel of the putter head.

7. After the epoxy has hardened and the shaft is firmly set in the hosel, two sided tape is wrapped around the butt end of the shaft covering six to ten inches.

8. Grip solvent is poured over the tape and into the open end of the grip. The grip is then slid over the taped end of the shaft.

9. Once the grip is dry, the club is cleaned with acetone to remove excess epoxy and tape residue.

10. Lead tape is applied to the putter head to insure proper weight and balance.

ISSUE:

What is the country of origin of the golf club putters produced in the U.S. with a foreign made head?

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 ?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. 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 exceptions of 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).

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.

In determining the country of origin of golf clubs made in the U.S. with an imported foreign component, 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 Headquarters Ruling Letter (HRL) 728213, dated July 3, 1985, and HRL 734136, dated June 17, 1991. See also HRL 735125, dated November 17, 1993, and 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 and the grip was of U.S. 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, it was held in HRL 734256 that the imported major components used in the assembly of the golf clubs in the U.S. were not substantially transformed by that process.

Most recently, in HRL 560693 dated March 6, 1998, we indicated that we would continue to follow the principle espoused in ORR 824-70, and its progeny, that 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, and HRL 73442, dated June 28, 1993. Thus, in HRL 560693, we held that the assembly of golf clubs in Taiwan using Taiwanese-origin club heads and components imported into Taiwan resulted in a substantial transformation of those imported components into products of Taiwan.

Accordingly, in this case, based on the previously cited rulings, we find that the Taiwanese golf club head is substantially transformed when it is assembled with a U.S. made shaft and the other minor components of the golf club putter in the U.S. Therefore, under 19 CFR 134.35(a), the imported heads are excepted from the individual country of origin marking requirements of 19 U.S.C. 1304 and only the outermost container in which the heads are transported to the U.S. processor must be marked with the origin of the heads. In addition, no country of origin marking is required on the finished golf club putter.

Although Customs has determined in this ruling that the finished golf club putters are articles of U.S. origin and not subject to the country of origin marking requirements of 19 U.S.C. 1304, whether they may be marked "Made in the USA" is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of markings indicating that articles are made in the U.S.

HOLDING:

The Taiwanese golf club heads are substantially transformed when they are assembled with the U.S. made shaft and other components in the U.S. to make the finish golf club putters. Therefore, the imported heads are excepted from the country of origin marking requirements of 19 U.S.C. 1304, and no country of origin marking is necessary on the finished golf club. However, the outermost container in which the golf club heads are transported to the U.S. processor must be marked with the origin of the heads.

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
Commercial Rulings Division

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