HQ 560817 - globe stands; 19 U.S.C. 1304; substantial transformation; 19 CFR 134.41(b) - United States International Trade Commision Rulings

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HQ 560817

August 6, 1998
MAR-2-05 RR:CR:SM 560817 KSG

CATEGORY: MARKING

Steven P. Sonnenberg
Sonnenberg & Anderson
200 South Wacker Drive
38th Floor
Chicago, Illinois 60606

RE: globe stands; 19 U.S.C. 1304; substantial transformation; 19 CFR 134.41(b)

Dear Mr. Sonnenberg :

This is in reference to your letters of January 19, 1998, and May 21, 1998, requesting a binding ruling on the country of origin marking of imported stands with globes on behalf of Maitland- Smith U.S., Inc. At your request, a conference was held at Headquarters on this ruling request.

FACTS:

The imported articles in this case are three styles of globes mounted on stands. You submitted photographs of these three styles. Maitland- Smith purchases the globes, which are made in the U.S., from a U.S. company. Each globe is marked as a product of the U.S. This marking is printed on the surface of the globe. You stated that the surface of the globes is delicate.

The U.S. made globes are shipped to the Philippines. In the Philippines, the globe stands are made and the globes are inserted into the stands. You provided details of the processing for three styles of globes mounted in stands. The first style (item 1336-003) is a globe mounted in a carved mahogany stand. In the Philippines, the wood is cut, veneer and solid wood components are laminated together, the wood is carved, sanded, and assembled into a stand, and the stand is polished according to the prescribed finish. Brass rollers are made and attached to the stand. The globe is then attached to the stand by being placed on the rollers and screwed into place with a screwdriver. The cost of the globe stand is $343.86, the cost of the globe is $73.13 and the cost to fit the globe to the stand is $5.53.

The second style (item 1054-003) is a nickel plated brass Hercules supporting the globe with a black leather base. In the Philippines, the wood is cut, solid wood and MDF, a form of chipboard material commonly used in furniture and cabinet production, are assembled to form a sub-base, the wood is sanded, leather is inlaid, the brass component is attached and the stand is polished according the prescribed finish. The iron holder is then connected to the globe and a hole is drilled and tapped between the shoulders of the bronze figure and the globe holder and globe are screwed into the hole. To fit the globe to the stand, a wrench, drill and tap are used. the cost of the globe stand is $167.37, the cost of the globe is $73.13, and the cost to fit the globe to the stand is $6.75.

The third style (item 1354-006) is a globe on a steel and brass stand. In the Philippines, the tubular steel and flat iron components are cut, the metal is sanded and polished, the metal components are assembled to form a stand, and the stand is polished and lacquered according to the finish. Brass rollers are then attached to the stand and the globe is placed on the rollers. A wrench, drill and tap are used to fit the globe to the stand. The cost of the globe stand is $165.76, the cost of the globe is $73.13, and the cost to fit the globe to the stand is $6.44.

The finished globes in the stands will bear a label "Made in the Philippines" which is placed on the bottom side of the top rim of the stand. You state that this method of marking is necessary to protect the surface of the stand.

You asked about four other styles of stands in your letter of January 19, 1998, but did not provide any details on the processing of these styles. Therefore, we are unable to address these styles in this ruling letter.

ISSUES:

What is the country of origin of the three styles of globes attached to the stands?

Whether the proposed placement of the marking satisfies the requirements of 19 U.S.C. 1304.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930 (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 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 of 19 U.S.C. 1304. Pursuant to
19 CFR 134.1(b), "country of origin" means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940).

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, 573 F. Supp. 1149 (CIT 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 85-25. However, the issue of whether a substantial transformation occurs is determined on a case-by-case basis. Customs ruled in C.S.D. 80-111, dated September 24, 1979, that a ceiling fan assembled in the U.S. in assembly line procedures was not substantially transformed in the U.S. Customs considered factors such as the nature of the assembly, the amount of skilled labor and specialized equipment involved and the cost of the assembly process.

In Headquarters Ruling Letter ("HRL") 950005, dated January 9, 1992, Customs ruled that sledge hammer handles made from U.S. origin blocks of green hickory wood were substantially transformed in Canada. However, the finished Chinese sledge hammer heads assembled onto the handles in Canada were not substantially transformed. Customs noted that the heads were completed articles which did not need any further manufacturing. Customs concluded that the sledge hammer head must be individually marked "Head made in China" and the handle must be marked "Handle made in Canada."

The globes, when imported into the Philippines, are completed articles which do not need any further manufacturing other than a simple assembly. Attaching the globes to the stands in the Philippines is a minor assembly operation that does not involve skilled labor or specialized equipment. The minimal cost involved in assembling the globes to the stands reflects the minor nature of the processing. The globes clearly do not undergo a change in name, character or use. Therefore, the globes are not substantially transformed in the Philippines and the country of origin of the globes remains the U.S. The country of origin of the three styles of stands would be the Philippines. Consistent with the decision in HRL 950005, each stand must be marked to indicate that its country of origin is the Philippines.

The second question presented is whether marking the country of origin on the bottom side of the top rim of the stand satisfies the requirements of 19 CFR 134.41. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), requires that the marking be conspicuous enough that an ultimate purchaser will be able to find the marking easily and read it without strain. The degree of permanence of the marking should be at least sufficient to insure that in any reasonably foreseeable circumstance, the marking shall remain on the article until it reaches the ultimate purchaser unless it is deliberately removed. The marking must survive normal distribution and store handling.

You cite several Customs rulings on the marking of tables, chairs, and a piano which allow marking on the underside of the furniture and the piano. The basis of these rulings is that the consumer expects to find the marking of furniture or a piano in that location just as a consumer expects shirts to be marked at the neck. These rulings considered various factors as general guidelines: whether the marking would detract from the articles appearance; whether the ultimate purchaser expects to find the country of origin marking in a certain location; and whether the method of marking is appropriate to the nature of the article.

The articles in question are not classified as furniture, and the ultimate purchaser does not have an expectation that globe stands would be marked on the bottom of the rim. Marking the underside of the rim of the stand is not a location that would enable the ultimate purchaser to find the marking easily or be able to read it without strain. We find that a marking on a label or tag that will survive normal distribution and which is located where an ultimate purchaser could find it easily would satisfy the requirements of 19 CFR 134.41. To avoid any confusion regarding the separate origins of the globe and the stand, the stand must be marked "Stand made in the Philippines."

HOLDING:

The country of origin of the imported three styles of stands is the Philippines. The stands must be marked "Stand made in the Philippines."

The country of origin marking on the stands should not be placed on the underside of the rim; it must be located where it may easily be found by the ultimate purchaser.

The globes are not substantially transformed in the Philippines. The country of origin of the globes remains the U.S.

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 handling the transaction.

Sincerely,

John Durant, Director
Commercial Rulings Division

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