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HQ 562657




April 29, 2003

MAR 205 RR:CR:SM 562657 MLR

CATEGORY: MARKING

Mr. Charles W. Roche
Linx Limited
P.O. Box 699
184 John Clarke Road
Newport, Rhode Island 02840

RE: Country of origin marking requirements for fire hydrant parts

Dear Mr. Roche:

This is in response to your letter dated January 27, 2003, requesting a ruling concerning the country of origin marking requirements for imported cast iron and ductile iron fire hydrant parts. Additional information was submitted March 28, 2003.

FACTS:

It is stated that Linx Limited supplies fire hydrant parts to a U.S. fire hydrant manufacturer. The iron parts imported from China are stated to constitute 25 percent of the total value of the finished fire hydrant. The remaining parts, such as gaskets, various nuts, valve rod couplings, rings, nozzle locks, main valves, lower section standpipes, and chain assemblies, are manufactured in the U.S. A parts list drawing of all of the parts is submitted for our review. Each fire hydrant is composed of approximately 48 different parts. The following parts are imported: operating nut, bonnet, pumper cap, hose cap, upper standpipe, and elbow, all stated to be classifiable under subheading 8481.90.30, Harmonized Tariff Schedule of the United States (HTSUS).

ISSUE:

Whether the individual imported parts must be marked with their country of origin “China.”

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 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. Part 134, Customs Regulations (19 CFR 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. The case of United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that 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 and, as a result, the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35(a).

The question in this case is who is the ultimate purchaser of the imported parts. Section 134.1(d)(1), Customs Regulations (19 CFR 134.1(d)(1)), states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. In Headquarters Ruling Letter (HRL) 734785 dated March 17, 1993, Customs held that an upper barrel imported and used to make fire hydrants was substantially transformed in the U.S. when it was combined and assembled with nozzles, O-rings, gaskets, iron caps, a housing and a cover, an operating nut, an upper rod and copper sleeve, an iron dome, and bolts and nuts to make a fire hydrant. It was stated that the upper barrels were only one of many components involved in making the fire hydrants. Therefore, as the U.S. processor of the fire hydrants was the ultimate purchaser of the upper barrels, in accordance with 19 CFR 134.35, the upper barrels were excepted from marking as long as their outermost containers which reached the ultimate purchaser were properly marked with the country of origin of the upper barrels. In HRL 731307 dated February 23, 1990, Customs held that imported castings which were used with U.S. components in the manufacture of gate values, butterfly valves and fire hydrants were excepted from individual marking pursuant to 19 CFR 134.35.

As in HRL 734785, the imported parts will be combined and assembled by the U.S. processor with various components to make fire hydrants. We find that the assembly of approximately 48 different types of parts is sufficiently complex, such that the imported parts are substantially transformed into a new and different article of commerce, namely fire hydrants. We also note that the majority of the parts are of U.S. origin, and that they comprise the inner functioning components of the fire hydrant. Therefore, as the imported parts are substantially transformed, only the outermost container of the parts must be marked with their country of origin “China” until they reach the ultimate purchaser, the U.S. processor of the fire hydrants. If the U.S. processor receives the imported parts in a properly marked container with the origin of the parts, “China”, the individual imported parts will not be required to be marked.

HOLDING:

Based upon the information presented, the imported parts are substantially transformed when the U.S. fire hydrant processor uses them to make fire hydrants. In accordance with 19 CFR 134.35(a), the U.S. processor is the ultimate purchaser of the imported parts. Therefore, if the U.S. processor receives the imported parts in a properly marked container with the origin of the parts, “China”, the individual imported parts will not be required to be marked.

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,

Myles B. Harmon, Director

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