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NY F85138

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April 4, 2000

MAR-2 RR:NC:N1:113 F85318

CATEGORY: MARKING

Mr. L. S. Holmboe
Ellis Manufacturing Company
4803 N. Cooper Avenue
Oklahoma City, OK 73118

RE: COUNTRY OF ORIGIN MARKING OF IMPORTED CASTINGS

Dear Mr. Holmboe:

This is in response to your letter dated March 23, 2000 requesting a ruling on whether the container in which castings are imported with the country of origin in lieu of marking the article itself is an acceptable country of origin marking for the imported castings. A marked sample container was not submitted with your letter for review.

The article is a casting of malleable iron imported from China. The casting is part of an Ellis Clamp. Ellis Clamps are used to make shores out of wooden 4 x 4’s or similar lumber. The clamp is a solid rectangular collar with two heavy-duty malleable iron castings, which are scored on the flat surface for firm gripping. Two Ellis clamps are used to make a shore. One casting on each clamp has four nail holes for attaching to the lower 4 x 4 bottom shore member. The bottom clamp is slipped on the 4 x 4 and nailed 14 inches from the top. The top clamp is then nailed 2 inches from the top of the lower 4 x 4, making the clamps 12 inches apart. Another 4 x 4, the upper shore member, slides in next to the lower shore member. The upper shore member is raised to the desired height and the clamps are tapped down to seat them.

The article actually imported is the malleable iron castings or plates. In their imported condition, they have no other use than to make an Ellis Clamp. Two of these castings are used on each clamp. Your company bends a ½-inch-round, mild steel bar into a rectangle. The castings are slipped onto the bar and the rectangle is closed and welded. No work is done on the castings themselves.

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 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 to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

In C.S.D. 85-25, (HQ 071827), (September 25, 1984), Customs held that an assembly would not constitute a substantial transformation unless the operation is "complex and meaningful." Customs criteria for whether an operation is "complex and meaningful" depends on the nature of the operation, including the number of components assembled, number of different operations involved, and whether a significant period of time, skill, detail, and quality control are necessary for the assembly operation. These criteria for determining whether a substantial transformation occurs are applied on a case-by-case basis.

An imported article will remain an article of foreign origin unless it is substantially transformed in the U.S. To determine if an article is substantially transformed in the U.S. which would except the article from marking under 19 CFR 134.35, it is necessary both to look at an article as it is imported and the processed article. Pertinent to the issue is the various foreign components that are used in the manufacturing process; regardless of when these other components were imported. If the processing in the U.S. does not change the name, character, or use of an article, it will not be substantially transformed and the article must be marked to indicate its country of origin no matter how it was imported.

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. Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation.

In C.S.D. 80-111, (HQ 710564), (September 24, 1980), Customs considered whether the domestic manufacturing processes through which imported ceiling fan components become finished fans constituted a substantial transformation. In this ruling, it was stated that mere assembly of parts would not constitute a substantial transformation. The assembly of the fan was not a substantial transformation because the processes were basically assembly line procedures which did not physically alter the components. Furthermore, the manufacturing processes were mere combining processes that were not complex or required a great deal of skill.

In National Hand Tool Corp., v. United States, Slip Op. 92- 61 (April 27, 1992), aff'd, 989 F.2d 1201 (1993), the Court of International Trade held that imported hand tool components which were used to produce flex sockets, speeder handles and flex handles were not substantially transformed when further processed and assembled in the U.S. One of the factors considered by the court in reaching its conclusion was whether the use of the imported components changed as a result of the processing and assembly operations performed in the U.S. In finding that the use of the imported components did not change, the court stated that the use of the imported articles was predetermined at the time of importation; each component was intended to be incorporated in a particular finished mechanic's hand tool.

No further processing needs to be performed to the individual casting in the U.S. except assembly with the domestic steel bar to make the completed article. As in National Hand Tool, the use of the imported castings is predetermined at the time of importation. Each casting is intended to be incorporated into a completed clamp. Clearly, these imported castings do not change in character as a result of the assembly operation. In addition, there is no indication that the assembly operation is complex. The imported castings are assembled to the steel bar by the simplest of means. Furthermore, the imported casting is not an insignificant component, but is an essential component of the completed product.

Accordingly, the castings are not substantially transformed when they are used to produce completed clamps. Therefore, the ultimate purchaser is the person(s) who purchases the completed clamp in the U.S., and the imported castings must be conspicuously, legibly and permanently marked to indicate the country of origin "China."

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).

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 James Smyth at 212-637-7008.

Sincerely,

Robert B. Swierupski
Director

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