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HQ 562558





December 31, 2002

MAR-02 RR:CR:SM 562558 ALH

CATEGORY: MARKING

Ms. Judith L. McKee

Port Director
U.S. Customs Service
5209 W. Hwy 98
Panama City, FL 32401

RE: Internal Advice for imported lamp parts to be used in manufacturing lamps in the United States

Dear Port Director:

This is in reply to your memorandum dated October 10, 2002, requesting internal advice on behalf of The Natural Light, Inc. (“Natural Light”). Natural Light imports finished lamp parts from various countries for its use in manufacturing lamps in the United States. Natural Light maintains that the imported parts undergo a substantial transformation when processed by Natural Light, such that the finished lamps may be marked, “This lamp is made of domestic and imported parts.”

FACTS:

Natural Light is an assembler/manufacturer of a variety of lamps, lighting products, and home accessories using both foreign and domestic parts. The specific product at issue in this inquiry is a Rattan Road electric lamp. Approximately 37 percent of the Rattan Road electric lamp parts are imported from China, Taiwan, Malaysia and the Philippines. The fourteen parts used in the assembly of the lamp include shades, harps, cords, sockets, finials, finial risers, top wooden transitions, rattan pole bundles, bottom wooden transitions, wooden bases, weights, inner pipes, lock washers, and nuts. The imported parts consist of the harp, cord, socket, top wooden transition, and rattan pole bundle.

ISSUE:

Whether the imported finished lamp parts used to produce the Rattan Road electric lamp are substantially transformed in the United States such that the finished lamp may be considered to be of U.S. origin for country of origin marking purposes.

LAW & 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 such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the requirements and exceptions of 19 U.S.C. §1304. Section 134.35(a), Customs Regulations (19 CFR 134.35(a)), provides that an article used in the United States in manufacture which results in an article having a name, character, or use differing from that of the imported article, will be within the principle of the decision in the case of United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98). Under this principle, the manufacturer or processor in the United States who converts or combines the imported article into the different article will be considered the “ultimate purchaser” of the imported article within the contemplation of 19 U.S.C. §1304(a), and the article shall be exempt from marking. In accordance with 19 U.S.C. §1304(b) and 19 CFR 134.35(a), the outermost container of the imported article shall be marked to indicate the country of origin of the article.

Although no written description of the assembly process was provided, based on a previous ruling involving lamps we are aware that such an assembly involves processes such as joining the parts with screws, nuts and bolts, gluing and soldering. In analogous circumstances, in Headquarters’ Ruling Letter (HRL) 734859 dated March 22, 1993, U.S. Customs held that the U.S. assembly of a lamp from numerous imported parts constituted a substantial transformation of the parts and the country of assembly was the country of origin of the finished lamp. The assembly involved the same sort of processing as that performed in the instant case. Also, like the instant case, the parts were imported into the country of assembly in a finished condition and were physically joined to the emerging new article, losing their separate identities.

HRL 734503 dated July 20, 1992 involved the marking requirements for a cut crystal piece used in making an electric lamp. U.S. Customs found that the crystal piece did not lose its identity by virtue of its assembly into a lamp and that, accordingly, the country of origin of the crystal had to be identified in the marking legend on the assembled lamp. By contrast in the instant case, no single component appears to impart the essential character of the lamp and indeed, its essential character as a lamp is not achieved until the various components are assembled.

The instant situation is also different from one in which the domestic assembly involves the addition of certain minor parts to complete a partially assembled lamp because the unfinished lamp would already have the essential character of a lamp and no substantial transformation would result. Similarly, an exception to marking would not apply where lamps are imported as kits because such kits already contain the essential character of the lamp, although in unassembled form.

It is our conclusion, based upon these prior rulings and particularly HRL 734859, that the imported parts undergo a substantial transformation in the United States. Natural Light, as the entity carrying out the substantial transformation, is considered the ultimate purchaser of the imported merchandise within the meaning of 19 CFR 134.35(a), Customs Regulations (19 CFR 134.35(a)). As a U.S. origin article, the finished lamp is not subject to the country of origin marking statute and need not have any country of origin marking.

Please note that had we determined that no substantial transformation resulted from the U.S. assembly operations, it would not have been acceptable to mark the finished lamp, “This lamp is made of domestic and imported parts.” In such a circumstance, it would have been necessary for the lamp’s country of origin marking to include the names of the foreign countries of origin of the imported parts.

HOLDING:

Based on these considerations, the finished lamp is exempt from country of origin marking pursuant to section 134.35(a), Customs Regulations (19 CFR 134.35(a)). The imported lamp parts are excepted from country of origin marking so long as their outermost containers are properly marked at the time of importation. U.S. Customs officials must be satisfied at the time of importation that the parts are entirely unassembled and are destined for use by Natural Light exclusively in the production of lamps as described above.

The Federal Trade Commission (“FTC”) has jurisdiction concerning the use of the phrase “Made in the U.S.A.,” or similar words denoting U.S. origin. Consequently, any inquiries regarding the use of such phrases reflecting U.S. origin should be directed to:

Division of Enforcement
Federal Trade Commission
600 Pennsylvania Avenue, N.W.
Washington, D.C. 20580
Telephone: 202-326-2996
URL address: www.ftc.gov

This internal advice should be mailed by your office to the requestor no later than 60 days from the date of this letter. On that date, the Office of Regulations & Rulings will take steps to make the decision available to U.S. Customs personnel and to the public on the U.S. Customs Home Page on the World Wide Web at www.Customs.gov, by means of the Freedom of Information Act and other means of public distribution.

If you have any questions regarding the foregoing, please let us know.

Sincerely,

Myles B. Harmon
Acting Director

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