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HQ 729308

August 12, 1988

MAR 2-05 CO:R:C:V 729308 LR


Judy Bradt
Canadian Embassy
2450 Massachusetts Ave., NW.
Washington, DC 20008-2881

RE: Country of Origin Marking Requirements for Earrings Manufactured in the U.S. and Painted in Canada

Dear Ms. Bradt:

This ruling is in response to your letter submitted on behalf of Polyn Inc. (the Company) requesting a ruling on the marking requirements of earrings imported from Canada.


The Company purchases unpainted earrings in the U.S. and ships them to Canada where they are painted a solid color and re- exported to the U.S. (Although not specifically stated, we assume that the earrings are made in the U.S.) The painted earrings are shipped to the U.S. loose in bags. The U.S. purchaser pairs the earrings, puts them on cards and attaches butterfly clasps so that they may be worn by women with pierced ears. Samples of the unpainted and painted earrings have been submitted.


Whether U.S.-made earrings which are sent to Canada for painting have to marked as a product of Canada.


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that every article of foreign origin (or its container) imported into the U.S., subject to certain specified exceptions, 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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. U.S. products exported and returned are specifically excepted from country of origin marking requirements under section 134.32(m), Customs Regulations (19 CFR

134.32(m)). In applying this section, Customs has ruled that products of the U.S. which are exported and returned are generally not subject to country of origin marking unless, prior to their return, they are substantially transformed. See HQ 729519, dated May 18, 1988, in which this principle is restated.

In order for a substantial transformation to be found, an article having a new name, character, or use must emerge from the processing. See United States v. Gibson-Thomsen Co. Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940).

Customs has not previously ruled on whether the painting of earrings constitutes a substantial transformation for marking purposes. However, in HQ 071362, dated June 23, 1983, and HQ 071363, dated August 25, 1983, two cases involving a substantial transformation question relevant to the determination of whether certain toy figures and plastic figures were eligible for benefits under the Generalized System of Preferences (GSP), Customs found that the painting of the figures did not constitute a substantial transformation. In another marking case involving painting (HQ 707057, dated December 10, 1976), Customs ruled that hand painting and firing of a vase did not constitute a substantial transformation so as to change the country of origin. Finally, in Madison Galleries, Ltd. v. United States, Slip Op. 88-71 (June 7, 1988), a recent court case involving the issue of whether certain vases were eligible for the benefits of GSP, the Court of International Trade determined that the vases were substantially transformed when they were decorated with oriental designs and scenes through painting and firing, which steps were repeated to provide surface relief and a multi-dimensional effect to the depictions. The cost of such processing equaled or exceeded 35 percent of the appraised value of the pieces. It is noted that this case is now on appeal.

Based on the above determinations, we are of the opinion that the painting of the earrings in Canada does not change the name, character, or use of the earrings in question. While painting is certainly necessary before the earrings can be sold to the consumer, we find that it is a minor finishing operation which leaves the fundamental identity of the earrings intact. Unlike the painting in the Madison Galleries case which produced a highly decorative article with artistic qualities, the earrings here are painted a solid color and lack any artistic and decorative effects. Moreover, while no cost figures have been submitted, it does not appear that the painting significantly increases the value of the earrings.


Based on the above considerations, we find that the painting of the earrings in Canada does not constitute a substantial transformation. As such, if the earrings are made in the U.S. they are excepted from marking pursuant to 19 CFR 134.32(m).


Marvin M. Amernick

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