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HQ 562783





August 29, 2003

MAR-2-05 RR:IA 562629 RFC

CATEGORY: MARKING

Mr. Robert A. Shapiro
Barnes, Richardson & Colburn
1225 Eye Street, N.W., Suite 1150
Washington, D.C. 20005

RE: Country of Origin for Certain Travertine Stone Tiles

Dear Mr. Shapiro:

This is in reference to your May 13, 2003, request, on behalf of Masonry Group International, Inc., for a binding ruling on the country of origin and admissibility into the United States of tiles produced in the United Arab Emirates from travertine stone quarried in various countries including stone quarried in Iran. You initially made a request in a January 7, 2003, letter that did not contain the information needed to issue a ruling on the country of origin of the travertine tiles. Your January 7, 2003, request was also submitted to the Office of Foreign Assets Control of the Department of the Treasury with respect to whether the importation of the travertine tiles made from stone quarried Iran is prohibited under applicable U.S. law.

FACTS:

The facts as presented are as follows: Masonry Group intends to import travertine stone tiles in various dimensions, including but not limited to, tiles measuring 4” x 4”, 12” x 12” and 18” x 18” (with a thickness of 0.5”). The tiles will be imported from Dubai, United Arab Emirates. The tiles will be manufactured from stone blocks quarried from various sources, and may include block quarried in Iran. Each stone block delivered to the manufacturing site in Dubai will measure approximately 3.33’ long, 3.33’ wide, and 5’ high.

The processing of a stone block into tiles is stated to be a labor-intensive operation. It takes approximately 94 hours to make tiles from a stone block: 9 hours to cut the tiles from the stone blocks, 25 hours to inspect manually and fill the gaps in the tile surfaces, 24 hours for honing operations and approximately 36 hours for polishing. The allotted time may vary depending on the quality of the stone and the size of the tiles being produced.

You contend that the country of origin of the tiles is the United Arab Emirates because the stone block was substantially transformed into the tiles in that country. In support of your position, you cite and discuss HQ 732330 (June 28, 1989). In that ruling, granite and marble blocks quarried in the People’s Republic of China were held to be substantially transformed when made and processed into tiles, slabs and markers in Portugal. Portugal was found to be the country of origin.

ISSUE:

What is the country of origin of the imported travertine stone tiles?

LAW AND ANALYSIS:

COUNTRY OF ORIGIN

Marking

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).

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).

Country of origin for country of origin marking is defined as follows:

“Country of origin” means the country of manufacture, production or growth of any article of foreign origin entering the United States. 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 part 134 of the Customs Regulations].

19 CFR § 134.1(b).

In light of the above, for the country of origin for the merchandise in the instant case to be the United Arab Emirates, the stone blocks must be substantially transformed in that country. A substantial transformation occurs when an 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 article. See Anheuser-Busch Brewing Ass’n v. United States, 207 U.S. 556 (1907); United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); Koru North America v. United States, 12 CIT 1120 (1988); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).

Similarly, as noted in the request, Customs and Border Protection ruled in HQ 732330 (June 28, 1989) that granite and marble blocks were substantially transformed when made and processed into tiles, slabs and markers, which are manufacturing processes similar to those that occur in the instant case.

In the instant case, the manufacture or processing of the blocks of stone into finished tiles by cutting, honing and polishing results in a new product and a change in name, character and use. Accordingly, the stone blocks are substantially transformed in the United Arab Emirates when they are used to produce the finished tiles. Therefore, the country of origin for marking purposes is the United Arab Emirates.

Duty Assessment

As with the country of origin for marking purposes, a substantial transformation for country of origin duty assessment purposes occurs when an 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 article. As discussed above, the country of origin for marking purposes for the tiles in the instant case is the United Arab Emirates because the stone blocks were last substantially transformed in that country. For the same reason, the country of origin for duty assessment purposes is also the United Arab Emirates.

ADMISSIBILITY

Whether the importation of the above-described travertine tiles made from stone blocks from Iran is prohibited under applicable U.S. law is within the jurisdiction of the Office of Foreign Assets Control of the Department of the Treasury. Therefore, the Office of Foreign Assets Control must determine whether the importation of the merchandise is prohibited.

HOLDING:

The country of origin of the above-described travertine stone tiles is the United Arab Emirates. Accordingly, the imported tiles must be conspicuously, legibly and permanently marked to indicate the country of origin as being the United Arab Emirates.

You should renew your request to the Office of Foreign Assets Control with respect to whether the importation of the merchandise is prohibited.

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, Director
Commercial Rulings Division

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