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HQ 561956




August 16, 2002

MAR-2-05 RR:IA 561956 RFC

CATEGORY: CLASSIFICATION MARKING

TARIFF NO.: 9608.10.00

Mr. Donald S. Stein
Manatt, Phelps & Phillips, LLP
1501 M Street, N.W., Suite 700
Washington, D.C. 20005-1702

RE: Classification & Country of Origin Marking for Certain Ball Point Pens with Attached Plastic Storybook Character Figure

Dear Mr. Stein:

This is in reference to your October 4, 2000, request, on behalf of BIC U.S.A. Inc., to the National Commodity Specialist Division of the U.S. Customs Service for a binding administrative ruling on the classification and country of origin marking requirements for certain ball point pens with attached plastic storybook character figure. The request has been forwarded to this office for a response.

FACTS:

The facts as presented are as follows: Ball point pens of U.S. origin will be shipped to China. In China, sculptured bodies or figures of a storybook character (i.e., Winnie-the-Pooch character “Tigger”) made of ABS plastic in China will be assembled or attached to each pen. A cap that is made in China from polypropylene will also be attached to each pen. The pens with attached plastic storybook character figure will then be shipped to the United States in bulk containers.

ISSUES:

What is the classification of the above-described ball point pens with attached plastic storybook character figure?

What is the country of origin for marking purposes of a ball point pen of U.S. origin to which is attached in China a plastic storybook character figure of Chinese origin that is then exported to the United States?

LAW AND ANALYSIS:

Classification of the Merchandise

Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States (HTSUS). The tariff classification of merchandise under the HTSUS is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. § 1204(a), 1204(c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (hereinafter "Harmonized System") represent the official interpretation of the Customs Cooperation Council on the scope of each heading. See H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin No. 36, 3 (T.D. 89-90, September 6, 1989), 59 F.R. 35127 (August 23, 1989). Although not binding on the contracting parties to the Harmonized System Convention or considered to be dispositive in the interpretation of the Harmonized System, the Explanatory Notes should be consulted on the proper scope of the Harmonized System. Id.

A review of the HTSUS reveals that the above-mentioned merchandise is potentially classified in two provisions: heading 9608 as a ball point pen and heading 3926 as a statuette or other ornamental article.

Heading 9608 provides, in pertinent part, for “ball point pens.“ The Explanatory Notes to heading 9608 indicate that the heading covers ball point pens, and that they “generally consist of a body enclosing a tube of ink terminated by a ball.” See Explanatory Notes to Heading 9608 to the Harmonized Commodity Description and Coding System (Third edition, 2002), page 1936.

Heading 3926 provides for “other articles of plastics and articles of other materials of headings 3901 to 3914.” The Explanatory Notes to heading 3926 indicate that the heading covers “statuettes and other ornamental articles.” See Explanatory Notes to Heading 3926 to the Harmonized Commodity Description and Coding System (Third edition, 2002), page 744.

Under GRI 3(b), composite goods that consist of different materials or components are to be classified as if they consisted of the component that imparts the essential character to the good. The above-mentioned goods are composite goods because they are made up of different components (i.e., ball point pen and plastic storybook character figure) that are attached to each other to form a whole. As such, they must be classified pursuant to GRI 3(b).

As the above-mentioned goods function as ball point pens and would appear to be sold and used by consumers as ball point pens (with the plastic storybook character figure merely serving an ornamental or decorative purpose for the pens), it is the ball point pen that imparts the essential character to the goods. Therefore, the goods are classified in heading 9608 as ball point pens. At the subheading level, pursuant to GRIs 1 and 6, the goods are classified in HTSUS subheading 9608.10.00 as ball point pens.

Country of Origin Marking for the Merchandise

The U.S. law relating to country of origin marking for imported merchandise (“the marking statute”) is found in section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304). This law provides that, unless excepted, every article of foreign origin (or its container) imported into the United States 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 United States the English name of the country of origin of the article. See 19 U.S.C. § 1304(a). Products made in the United States do not have to be marked with their country of origin under this statute.

The purpose of the marking statute is to allow the ultimate purchaser of the goods to know, by simple inspection, specifically where they were made in case such knowledge might influence his or her decision to purchase the goods (i.e., to permit the ultimate purchaser in the United States to choose between domestic and foreign-made products, or between the products of different foreign countries). See generally, United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, at 302 (1940).

The “ultimate purchaser” is defined in Part 134 of the Customs Regulations as:

[G]enerally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the ``ultimate purchaser'' is the last person in the United States who purchases the good in the form in which it was imported.

19 CFR § 134.1(d).

For country of origin marking purposes, the country of origin of a good is the country of manufacture, production or growth of any article of foreign origin entering the United States or the country in which the good was last substantially transformed. See generally, 19 CFR § 134.1(b). A substantial transformation occurs when an imported article is used in a manufacturing process or operation that results in a new article having a new name, character or use different from that of the original imported article. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); National Hand Tool Corp. v. United States, 989 F.2d 1201 (Fed. Cir. 1992).

In the instant case, one begins with a pen and ends up with a pen after the attachment of the plastic storybook character figure. This assembly does not result in a substantial transformation of the pen because the essential character of the pen does not change simply by being placed into or attached to a plastic storybook character figure. Moreover, there is no significant change in name, use or character to the pens when such an assembly occurs. Therefore, the country of origin of the U.S. pens remains unchanged when attached to or inserted into the foreign plastic storybook character figure.

In light of the above, the U.S.-origin pen portion of the assembled good is not subject to the country of origin marking requirements. The plastic storybook character figure, however, is also not substantially transformed into a product of the United States merely by the simple assembly of the two items in China. The plastic character figure clearly retains its separate identity. Therefore, the assembled good (or the container, if any, in which the good is sold to the ultimate purchaser) must be marked to indicate the Chinese origin of the plastic storybook character figure.

Please be advised that the above-mentioned goods may be eligible for the partial exemption from duty provided by HTSUS subheading 9802.00.80 for American-made fabricated components that are returned to the United States as part of articles assembled abroad. The goods must satisfy the requirements of HTSUS subheading 9802.00.80 and related provisions in the law (including U.S. note 4 to subchapter II to HTSUS chapter 98 and 19 CFR §§ 10.11 to 10.26).

HOLDING:

The ball point pens with attached plastic storybook character figures are classified in HTSUS subheading 9608.10.00.

The U.S.-origin ball point pen portion of the assembled good is exempt from country of origin marking. The good itself (or the container, if any, in which the good is sold the ultimate purchaser), however, must be marked to indicate the Chinese origin of the plastic storybook character figure.

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 Service officer handling the transaction.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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