HQ 561594 - Country of Origin Marking for Wire Harnesses; 19 CFR 134.46 - United States International Trade Commision Rulings

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HQ 561594

June 25, 2002

MAR-2-05 RR:CR:SM 561594 MLR

CATEGORY: MARKING

James L. Sawyer, Esq.
Katten, Muchin & Zavis
252 West Monroe Street
Suite 1600
Chicago, IL 60661-3693

RE: Country of Origin Marking for Wire Harnesses; 19 CFR 134.46

Dear Mr. Sawyer:

This is in reference to your letter dated December 8, 1999, requesting a ruling on behalf of Delphi Automotive Systems (“Delphi”), concerning the country of origin marking for wire harnesses made for the automotive industry. Samples were submitted with your request. We regret the delay in responding. FACTS:

The articles at issue are wire harnesses assembled in Mexico and imported by Delphi into the U.S. for sale to related Delphi divisions and other original equipment manufacturers (“OEMs”) (the majority of which are in the automobile industry), or automotive component manufacturers and suppliers who, in turn, sell to OEMs. After importation, the wire harnesses are used in such applications, for example, as incorporation into oxygen sensors which determine the amount of oxygen in exhaust gases, or in adjustable automobile seats.

Approximately 21,234 different parts, such as relays, terminals, rubber seals, etc., are used in the production and assembly of the wire harnesses. It is estimated that approximately 600 part numbers and materials are marked with their non-Mexican countries of origin, or otherwise contain symbols or logos identifying their countries of origin. A single part may also be used multiple times in making a wire harness. Some of the parts are sourced in the U.S. and may be marked with the U.S. address of the manufacturer or otherwise are marked “Made in U.S.A.” Delphi states that it would be costly and difficult to destroy the marking on the various component parts that make up the wire harnesses.

In lieu of marking the individual wire harnesses, Delphi wishes to mark “Assembled in Mexico” or “Assembled in Mexico from foreign and domestic components” on the container in which the wire harnesses reach the ultimate purchaser in the U.S.

ISSUE:

Whether the non-origin references on the wire harnesses trigger the marking requirements of 19 CFR 134.46.

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 United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in a way that indicates to the ultimate purchaser in the United States the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

For purposes of this ruling, we are assuming that the components that are used to make the wire harnesses undergo a change in origin, such that the wire harnesses are considered products of Mexico under the NAFTA Marking Rules (19 CFR Part 102). See Headquarters Ruling Letter (HRL) 560951 dated July 2, 1998.

Section 134.1, Customs Regulations, defines "ultimate purchaser" as generally the last person in the U.S. who will receive the article (or purchases the good if it is a good of a NAFTA country) in the form in which it was imported. A U.S. manufacturer who substantially transforms an article after importation is considered the ultimate purchaser. In this case, the Delphi affiliates and OEMs are the ultimate purchasers of the wire harnesses. See HRL 560951, supra; and HRL 733941, dated March 1, 1991 (automotive wire harnesses were substantially transformed in the U.S. as a result of their incorporation into automobiles and various automobile components. Accordingly, the wire harnesses were not required to be individually marked and only the container in which the wire harnesses were imported was required to be marked).

With regard to the subject wire harnesses, which are sold to the automotive component manufacturers and suppliers, who subsequently sell them to OEMs, the OEMs will be the ultimate purchasers. Therefore, it does not appear with certainty that these wire harnesses will be resold in the same carton in which they are imported (which is properly marked with the country of origin).

Pursuant to 19 U.S.C. 1304 (a)(3)(D) and 19 CFR 134.32(d), an exception from individual marking is applicable where the marking of a container of such article will reasonably indicate the origin of the article. This exception is normally applied in cases where the article is imported in a properly marked container and Customs officials at the port of entry are satisfied that the ultimate purchaser will receive it in the original unopened marked container. Relevant factors regarding whether an article is likely to remain in its original container include the chain of distribution, the type of container, and the nature of the article.

HRL 558638, dated November 18, 1994, is cited in support of your position that only the containers in which the wire harnesses reach the ultimate purchasers need be marked, and that the individual wire harnesses are not required to be marked. In HRL 558638, Customs determined that imported gauges with U.S. references for use by OEMs in the manufacture of refrigerators, pumps, etc., in the U.S. were not required to be individually marked.

In HRL 559211, dated September 21, 1995, CDs were distributed to companies who recorded onto the CDs. Because the CDs were substantially transformed by the recording process, the recording companies were considered the ultimate purchasers of the imported CDs. Therefore, the CDs were excepted from individual marking pursuant to 19 CFR 134.32(d) and 19 CFR 134.35. Alternatively, some of the CDs were not recorded but were resold in the outer carton in which they were purchased from the importer. With regard to this second group of CDs, Customs held that the CDs and the inner containers were excepted from individual marking pursuant to 19 CFR 134.32(d) as long as Customs officials at the port of entry were satisfied that the ultimate purchasers received the CDs in the original unopened marked outer container. However, in instances where the CDs were subsequently repackaged in the U.S. or where the importer could not ensure that the CDs would be resold in the same marked outermost carton in which they had been imported, the certification requirements of 19 CFR 134.26 had to be satisfied.

Section 134.26, Customs Regulations (19 CFR 134.26) provides in pertinent part that:

If an imported article subject to these requirements is intended to be repackaged in retail containers ... after its release from Customs custody, or if the district director having custody of the article, has reason to believe that such article will be repacked after its release, the importer shall certify to the port director that: ... (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements.

In addition, HRL 559211 found that U.S. references on the CDs and plastic CD cases did not trigger the requirements of 19 CFR 134.46 because these references could not be seen until the outermost container, which was properly marked with the country of origin, was opened. Therefore, Customs did not find that the U.S. references on the CDs and cases were deceiving.

Section 134.46, Customs Regulations (19 CFR 134.46), provides that:

In any case in which the words “United States,” or “American,” the letters “U.S.A.,” any variation of such words or letters, or the name of any city or location in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced appear on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin of the article, there shall appear legibly and permanently in close proximity to such words, letters or name, and in at least a comparable size, the name of the country of origin preceded by “Made in,” “Product of,” or other words of similar meaning.

Similarly in this case, we find that the individual wire harnesses may be excepted from individual country of origin marking, provided Customs officials at the port of entry are satisfied that the wire harnesses will reach the ultimate purchasers in properly marked, unopened containers. In regard to the wire harnesses sold to automotive component manufacturers and suppliers, who, in turn, sell to OEMs, the requirements of 19 CFR 134.26 must be satisfied. Furthermore, we find that the non-origin markings on certain components of the wire harnesses will not trigger the special marking requirements of 19 CFR 134.46 because these references will not be seen until the ultimate purchaser opens the properly marked outer container.

Either of the proposed markings on the outer container, “Assembled in Mexico” or “Assembled in Mexico from foreign and domestic components,” is acceptable. See 19 CFR 134.43(e).

HOLDING:

Based on the facts and samples presented, the individual wire harnesses may be excepted from individual country of origin marking, provided Customs officials at the port of entry are satisfied that the wire harnesses will reach the ultimate purchasers in properly marked, unopened containers. Furthermore, we find that the non-country of origin references on certain components of the wire harnesses will not trigger the requirements of 19 CFR 134.46 because these references will not be seen until the ultimate purchaser opens the properly marked outer containers. In regard to the wire harnesses sold to automotive component manufacturers and suppliers, who, in turn, sell to OEMs, the requirements of 19 CFR 134.26 must be satisfied. Either of the proposed markings on the outer container, “Assembled in Mexico” or “Assembled in Mexico from foreign and domestic components,” is acceptable.

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

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