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HQ 561959




September 14, 2001

MAR 2-05 RR:CR:SM 561959 KKV

CATEGORY: MARKING

Mr. Bill Bettridge
Operations Manager
Shields Rubber Company
1217 67th Street
Baltimore, Maryland 21237

RE: Country of origin marking requirements applicable to imported molded rubber seals exclusively used in the manufacture of trucks; substantial transformation; 19 CFR 134.35(a)

Dear Mr. Bettridge:

This is in response to your letter dated November 6, 2000, which requests a ruling regarding the country of origin marking requirements for molded rubber products imported from Korea. No samples or illustrations of the imported merchandise were submitted.

FACTS:

You state that Shields Rubber Company (Shields) will be importing molded rubber products, described as molded unreinforced rubber seals classifiable under subheading 4016.93.1090, HTSUS, from Korea. We are informed that the seals will be sold to Mack Trucks, Inc., as original equipment parts afor use in the assembly of class 8 vehicles in the United States. We are informed that the containers in which the rubber seals will be imported into the U.S. will be marked with the country of origin of the contents, and that the containers in which Shields ships the rubber parts to Mack Truck will also be marked to indicate the country of origin of the rubber articles. ISSUE:

What are the country of origin marking requirements for the imported rubber seals that will be used in the U.S. in the manufacture of trucks?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (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 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. Congressional intent in enacting 19 U.S.C. 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., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 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 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 the meaning of the marking laws and regulations. An article used in manufacture which results in an article having a name, character, or use differing from that of the constituent article will be considered substantially transformed. U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).

The standard for determining the ultimate purchaser of an imported article used in manufacture is set forth in section 134.35(a), Customs Regulations (19 CFR 134.35(a)), which provides that the manufacturer or processor who converts or combines the imported article into an article having a name, character or use differing from that of the imported article is considered the ultimate purchaser. Under such circumstances, the imported article is substantially transformed and the article itself need not be individually marked. Only the outermost container in which the article is imported must be marked.

In Headquarters Ruling Letter (HRL) 731076, dated November 1, 1988, Customs ruled that automobile components from Japan, Taiwan and the U.S. lost their separate identities when they were incorporated into cars in a manufacturing process and were therefore substantially transformed. We stated that the manufacture of an automobile was more than a simple assembly operation. Similarly, in HRL 733941, dated March 1, 1991, automotive wire harnesses were assembled in Mexico and sold to Ford Motor Company, which used them exclusively as original equipment in the manufacture of motor vehicles. Customs ruled that when the imported wire harnesses were incorporated into a new motor vehicle as part of the manufacturing process, they lost their separate identity and became a part of a new article of commerce; namely, a motor vehicle. Thus, we held that the wire harnesses were substantial transformed and excepted from the individual country of origin marking requirements of 19 U.S.C. 1304.

Recently, in HRL 561572, dated February 29, 2000, which was issued to your firm, Customs considered facts which were virtually identical to those presented here. In that case, molded rubber products (e.g., seals, hoses, etc.) were imported into the U.S. from Indonesia and used solely as original equipment parts in the manufacture of new trucks. Consistent with the analysis set forth in HRL 731076 and HRL 733941, supra, Customs determined that the rubber tubes and seals were substantially transformed when used in the manufacture of new trucks, and that the manufacturer was the ultimate purchaser of the imported articles. Accordingly, Customs held that the articles were excepted from the individual marking requirements of 19 U.S.C. 1304, provided that the containers in which the rubber parts were imported were properly marked with the country of origin.

Likewise, in this instance the rubber seals imported from Korea and used exclusively in the manufacture of new trucks, are further processed in the United States in a manner which results in a substantial transformation. Consequently, the U.S. processor is the ultimate purchaser. Therefore, the imported rubber seals need not be individually marked with their country of origin, provided that the outermost container in which they are imported is properly marked with the country of origin, and the port director at the port of entry is satisfied that they will only be used in the manner set forth above, and that the ultimate purchaser will receive them in the marked containers.

HOLDING:

The imported rubber seals, which are exclusively used in the manufacture of new trucks, are substantially transformed into a new and different article in the United States. Therefore, pursuant to 19 CFR 134.35(a), the U.S. processor is the ultimate purchaser of the imported rubber parts. Accordingly, the imported rubber seals will be excepted from individual marking, provided that the outermost container in which they are imported is properly marked with the country of origin, and the port director at the port of entry is satisfied that they will be used only in the manner set forth above, and the ultimate purchaser will receive them in the marked containers.

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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