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HQ 732461

December 12, 1989

MAR-2-05 CO:R:C:V 732461 jd


Mr. Allan J. Rappoport
District Director of Customs
880 Front Street
Room 5-S-9
San Diego, California 92188

RE: IA 23/89; Country of origin marking requirements applicable to automobile alarm systems

Dear Mr. Rappoport:

This is in response to your request for internal advice (IA 23/89; your file CLA-1-07:C:DAB PT), concerning the application of country of origin marking requirements to automobile alarm systems.


Two automobile alarm systems were described. One system contains the following components: (1) a control module assembled in Mexico with parts from various countries; (2) a transmitter/receiver made in Singapore- it is contained in separate styrofoam packaging which is placed into the retail box holding all the components; (3) a speaker made in Taiwan- the speaker itself is labeled and it is in a white cardboard box also marked "Made in Taiwan", that box is placed into the retail box holding all the components; (4) a microphone made in Taiwan; and (5) a connector assembly assembled in Taiwan from U.S. and foreign components.

The other alarm described consists of: (1) a siren/speaker alarm made in Mexico; (2) two transmitter/receivers made in Korea; and (3) a LED arming light made in Taiwan.

Both alarms are sold with mounting hardware (not described but we assume it to be nuts, bolts, screws, and possibly mounting brackets), and come in retail packages marked "Assembled in Mexico." The importer does not propose to remove any of the existing country of origin marking from the components.

The importer argues that the "Assembled in Mexico" marking satisfies marking requirements because:

(1) the articles are treated as an entirety for classification purposes and therefore Customs has no justification to require separate country of origin marking for

(2) the bringing together of components and the addition of installation instructions constitutes a substantial transformation and an assembly.

Should we have rejected those two arguments, the importer argues in the alternative that if an article is correctly marked, the immediate container need not be marked, and that matters involving protection of the public from deceptive labeling are the jurisdiction of the Federal Trade Commission, not the Customs Service.


Does the marking "Assembled in Mexico" on the retail packaging of the automobile alarm systems described above satisfy country of origin marking requirements?


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that 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 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.

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 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 marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 267 (C.A.D. 98), 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.


We do not agree that the classification of an article must control the country of origin marking of the article. Courts have acknowledged the reality that the application of differing laws relating to the importation of goods into the U.S. can result in differing origins for the same product. In discussing the differences between the marking laws, drawback laws and the the Generalized System of Preferences (GSP), the court in National Juice Products Association v. United States, 10 CIT 48, 628 F.Supp. 978 (1986), concluded, "Thus, although the language of the tests applied under the three statutes is similar, the
results may differ where differences in statutory language and purpose are pertinent." National Juice, note 14, at 58-59. We believe that the differing purposes of the marking laws compared with the classification schedules justify different results in the present instance; one for origin, one for duty assessment.

The pertinent statutory purpose involved in application of the marking laws was explained in United States v. Friedlaender & Co., 27 CCPA 297, C.A.D. 104 (1940) thusly:

Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of pur- chase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.

We do not believe that the marking "Assembled in Mexico" informs the ultimate purchaser of the origin of the alarm systems being considered here. The retail package may contain an entire alarm system, but upon opening the box an ultimate purchaser will be confronted with separate, distinct components of varying origins. Each of the major components is necessary for the proper operation of the system and carries out a distinct function of its own. Ultimate purchasers are entitled to origin information concerning all these vital components. In both systems there are components not of Mexican origin which were imported to Mexico in finished condition ready for repacking. That mere act of repacking does not confer Mexican origin.


In response to the importer's contention that his Mexican operations constitute a substantial transformation, we do not agree that "bringing together all of the essential elements of a system whose parts are specifically designed to function together and ... the addition of the installation instructions", amount to a substantial transformation.

The importer has, in an additional submission dated May 5, 1989, attempted to liken the packaging of the subject automobile alarm systems to two Customs rulings, one concerning typewriters, the other automobiles.

In ruling 730837 (June 10, 1988), Customs held that the assembly of a typewriter from hundreds of parts was a substantial transformation of the parts and the country of assembly was the
country of origin of the typewriter. The assembly involved procedures such as joining parts with screws, nuts and bolts, and soldering. Components which were imported in a finished condition into the country of assembly were not merely repackaged in a retail carton and called a typewriter. Such components were physically joined to the emerging new article and lost their separate identities.

In ruling 731076 (November 1, 1988), Customs determined that subassemblies from various countries of an automobile brought together in another country for assembly lost their separate identity and emerged from a lengthy, multi-worker manufacturing process as a new article of commerce. Contrary to the importer's opinion as expressed on page six of his April 10, 1989, submission, we would not determine that if the major components and subassemblies of a car were brought together and packaged in one country that the country of packaging was, for purposes of 19 U.S.C. 1304, the country of origin of the automobile kit.

The importer's situation is more like ruling 708610 (February 21, 1978), wherein a domestic manufacturer of an amateur radio transceiver sought a marking exception for the Japanese microphone he attached to the set before sale. His request was denied since the microphone was sold in its condition as imported and the purchaser at retail was considered the ultimate purchaser.

Similarly, in ruling 084935 (August 23, 1989), it was determined that a small nylon bag used to hold the pieces of a "pocket gym" required individual country of origin marking. The bag was not subjected to any processes in the country where the pieces where inserted into the bag that would permit an exception to individual marking.

An additional submission from the importer dated October 20, 1989, attempts to liken the importation of the alarm systems with ruling 083455 (September 6, 1989). That ruling, in pertinent part, said that roller bearings assembled in Mexico could be marked "Assembled in Mexico" or "Assembled in Mexico from Romanian and U.S. components". The Mexican assembly involved the physical joining of components to produce a finished roller bearing. The presence of U.S. components triggered the operation of { 10.22, Customs Regulations (19 CFR 10.22), which accounts for the suggested use of the "Assembled in" language. The importation of the alarm systems is distinguishable in that distinct components are received by ultimate purchasers. The components have been brought together into one box, but they are not subjected to any type of assembly which could be said to transform the components into one article with one country of origin.


The importer states his belief that the marking on the components of the alarm system make marking on the container unnecessary. We disagree. In limited instances, a correctly marked article may be packaged in a container without the necessity of repeating country of origin marking on the package. For example, a correctly marked crystal vase could be placed in an unmarked container, provided the container remains unsealed at the point of sale. Customs believes an ultimate purchaser is extremely likely to open the container of such an article and closely examine the vase before purchase, consequently seeing the origin marking (see { 134.26(f), Customs Regulations (19 CFR 134.26(f)).

However, in the case of an alarm system, we do not believe an ultimate purchaser is likely to closely examine the components before purchase. The requirement that a purchaser be able to find marking easily will be accomplished by requiring the origins of the components to be listed in one statement on the immediate container of the article.


We are not persuaded by importer's reliance on Baldwin Bracelet Corporation v. FTC, 325 F.2d 1012 (D.C. Cir 1963), or U.S. v. Mersky, 361 U.S. 431 (1960). The importer cites to Baldwin for the proposition that "[m]atters involving protection of the general public from deceptive acts arising from country of origin labelling are for the Federal Trade Commission, not the Customs Service." However, the Baldwin court acknowledged the authority of Customs and the FTC to have coexistant jurisdiction over marking and stated "the authority granted the Secretary of the Treasury by { 304 of the Tariff Act of 1930, as amended in 1938, was not intended to repeal { 5 of the Federal Trade Commission Act, nor to diminish the jurisdiction and authority of the Commission with relation to such practices as are involved here."

Mersky involved the interpretation of T.D. 53210, a decision to facilitate collection of duties on goods from areas dominated by the Soviet Union. The Supreme Court agreed that the statute involved, 65 Stat. 73; 19 U.S.C. 1362, and the regulations issued pursuant thereto were designed to "protect and expedite the collection of customs duties." Mersky at 440. However, the emphasis of this statute on duty collection did not amount to a repeal of the consumer protection aspects of marking law. "Certainly its emphasis on duties and its silence on the protection of the public from deceit support the conclusion that the old provisions were to continue insofar as markings after importation are concerned." Mersky at 440-41 [footnote omitted].


The classification of an automobile alarm system does not control the country of origin marking required on such article. The bringing together of the components of such a system is not an assembly of a new and different article for purposes of marking. The party packaging the components, some manufactured in the country of packing, some imported into the country of packing in a finished condition, is not the ultimate purchaser of the components; the packing is not a substantial transformation.

Marking on the container that will reach the ultimate purchaser must indicate the origins of the components of the respective systems, i.e., control module, transmitter/receiver, speaker, microphone and connector assembly; or siren/speaker, transmitters/receiver, and LED arming light. A phrase such as words of similar meaning would be sufficient.


John Durant

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