NY D82905 - Country of origin marking of imported valve handles; Article 509. - United States International Trade Commision Rulings

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NY D82905

October 29, 1998

MAR-2 RR:NC:1:102 D82905

CATEGORY: MARKING

Mr. Tom Vincent
Cooper Cameron Valve
845 South East 29th Street
Oklahoma City, OK 73143

RE: Country of origin marking of imported valve handles; Article 509.

Dear Mr. Vincent:

This is in response to your letter dated August 20,1998 requesting a ruling on the country of origin marking requirements for imported articles, which are claimed to be goods of a NAFTA country, which are to be further processed in the U.S. into a finished article.

The articles in question are handles for hand operated valves, identified as part numbers J024237-01, J024238-001, J024239-001, J024240-001 and J024241-001, manufactured from castings produced in Mexico. You indicate that in Mexico the castings undergo finishing operations, which include cleaning, drilling, tapping and painting. Each shipment of handles from Mexico to the U.S. is accompanied by a NAFTA certificate of origin.

You also indicate that Cooper Cameron Valves is involved in the manufacture of valves. The finished valve handles from Mexico are be imported by Cooper Cameron and assembled in the U.S. with other U.S. manufactured components to produce a complete valve. The assembly process involves more than five separate parts and you state that the imported handle is a relatively minor component.

You request a binding ruling on the marking requirements for the imported valve handles produced in Mexico. Specifically, you contend that the imported valve handles are excepted from country of origin marking pursuant to section 134.35 Customs Regulations (19 CFR 134.35).

The marking statute, section 304, Tariff Act of 1930, as amended (19 USC 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 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 USC 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057, December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b) of the regulations, defines "country of origin" as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.1(j) of the regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.

In order to determine the country of origin marking requirements we must first apply the NAFTA Marking Rules in order to determine whether the imported valve handle "is a good of a NAFTA country", prior to being further processed in the U.S.

Part 102 of the regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA rules of origin set forth in Part 102 of the regulations to the information you have provided, we find that, for marking purposes, the imported valve handles are goods of a NAFTA country prior to being further processed in the U.S.

Section 134.35(b) of the regulations, provides that a good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the United States under the NAFTA marking rules is excepted from marking. Unless the good is processed by the importer or on its behalf, the outermost container of the good shall be marked in accord with this part.

Next, we determine the country of origin of the finished valves. Since the valve handles are made in Mexico, the finished valves are neither wholly obtained or produced, nor produced exclusively from domestic materials as those terms are defined under section 102.1, Customs Regulations (19 CFR 102.1). Accordingly, in determining the country of origin of the valves, section 102.11(a)(3), Customs Regulations (19 CFR 102.11(a)(3)), is the rule that must be applied.

For the finished valves, which are classified in heading 8481 of the Harmonized Tariff Schedule of the United States (HTSUS), the applicable change in tariff classification set out in section 102.20(o), Section XVI, Chapters 84 through 85, provides:

A change to subheading 8481.10 through 8481.80 from any other heading, or from subheading 8481.90 except when resulting from a simple assembly.

Accordingly, under the above rule, there are two alternative bases by which an article may undergo a tariff shift. In applying the first part of the rule, we note that the imported valve handles, which are classified as parts of hand operated valves in HTSUS subheading 8481.90, do not undergo the applicable tariff shift because they do not change headings at the four digit level, since both the valve handles and the finished valves are classified under heading 8481, HTSUS. However, the valve handles classified in subheading 8481.90 will meet the alternative provision in the tariff shift rule if the finished valves are produced other than by a simple assembly.

19 CFR 102.1(o) defines simple assembly as the fitting together of five or fewer parts all which are foreign (excluding fasteners such as screws, bolts, etc.) by bolting, gluing, soldering, sewing or by other means without more than minor processing.

The production of the finished valves does not fall within this definition of a simple assembly because it involves more than 5 parts, of which all, except for the valve handle, are claimed to be of U.S. of origin. Therefore the alternative test of the tariff shift rule is satisfied because the valve handles change classification in the United States from subheading 8481.90 to another subheading of heading 8481 through processing other than a simple assembly. Accordingly, the country of origin of the finished valve is the United States.

Under 19 CFR 134.35(b), because the valve body is a good of a NAFTA country, which is processed in the United States in a manner which results in the good becoming a good of the United States under the NAFTA marking rules, it is excepted from the country of origin marking requirements of 19 USC 1304. In addition, because the importer, Cooper Cameron Valves, will process the valve bodies into the valves, the outermost containers in which the valve bodies are imported also do not have to be marked.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kenneth T. Brock at 212-466-5493.

Sincerely,

Robert B. Swierupski
Director,

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