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HQ 733299

July 17, 1990

MAR-2-05 CO:R:C:V 733299 NL


District Director
U.S. Customs Service
909 First Avenue
Seattle, WA 98174

RE: Country of Origin Marking for Guitar Kits to be Assembled in the U.S.

Dear Sir:

In response to a request from the importer, Gibson Guitar Company (Gibson), Bozeman, Montana, we have reviewed the determination of the Seattle District that the country of origin marking of certain guitar kits imported from Japan is not in conformity with the requirements of section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304). This decision is issued as an internal advice.


The article in question is a wood-bodied acoustic steel- stringed guitar which upon assembly Gibson will market as its "Blueridge" line. The body and neck of the guitar are imported from Japan. In its imported condition the wood body of the guitar has been sanded to some degree, and extensively inlaid around the edges and sound hole. The top and sides of the neck are also inlaid. The body and neck are precut in order to fit together; it is evident that little or no cutting is required to make them fit together cleanly. The neck is fitted with frets, and holes have been cut to receive the tuning gears.

After importation, Gibson employees sand the neck and body; fit and glue the neck to the body; apply the plastic heel cap; sand the whitewood; apply color and oven dry; scrape, sand, handrub, buff and generally finish the surface; drill the string holes; install the nut and tuners; install the strings and saddle; drill the hole for the end pin; make final adjustments; and install the truss rod cover. It is estimated that this assembly requires approximately 8.5 hours per instrument. The steps associated with assembly require a little over two hours to complete, while the surface finishing requires slightly more than six hours. It is further estimated that the Japanese manufacturing time required to produce the imported body and neck is one third of the total manufacturing time. No data has been submitted as to relative costs or value added.

The Seattle District has issued a marking notice pursuant to 19 U.S.C. 1304 directing Gibson to mark the guitar as a product of Japan. Pending resolution of the matter no additional enforcement action has been taken.


Whether, for purposes of 19 U.S.C. 1304, the imported guitar components are substantially transformed in the U.S. so that they are excepted from country of origin marking.


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin (or its container) must be legibly, permanently, and conspicuously marked to indicate the English name of its country of origin to the ultimate purchaser in the U.S. The purpose of this provision is to require the identification of the country of origin "so that at the time of purchase 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." United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. The term "country of origin" is defined in 19 CFR 134.1(b) as the country of manufacture, production, or growth of an article. 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". As provided in 19 CFR 134.35, a substantial transformation is said to occur when, within the principle of the case of U.S. v. Gibson-Thomsen Co. Inc., 27 C.C.P.A. 267, C.A.D. 98 (1940), an article is combined or converted by manufacture such that a new article emerges with a different name, character, or use. A manufacturer or processor in the U.S. who converts or combines the imported article into a different article will be considered the "ultimate purchaser" of the imported article for purposes of the country of origin marking requirements. An article which is substantially transformed after importation into the U.S. is excepted from individual marking and only the outermost container in which it is imported is required to be marked.

In this matter, having reviewed Gibson's submission and having examined samples of the guitar parts as imported and the finished guitar after U.S. processing, it is our opinion that the processing does not effect a substantial transformation. As in National Juice Products Ass'n v. United States, 628 F. Supp. 978 (C.I.T. 1986), (imported orange juice concentrate is not substantially transformed by reconstitution in the U.S.) the
processing in the U.S. does not change the name, character, or use of the imported article, nor does it change the article's essential character. As to name, the only change resulting from the processing is that the guitar is assembled rather than unassembled. In character and use the article remains essentially a guitar before and after importation.

In HQ 706040 (August 3, 1976), Customs ruled that an electric guitar, imported with the neck and body disassembled, was not substantially transformed by assembly and stringing after importation. Customs characterized this U.S. processing as "a relatively minor operation which neither substantially changes the character and use of the guitar parts, nor renders your company the ultimate purchaser of the guitar parts under section 134.35 of the Customs Regulations." The assembled electric guitars were required to be marked with their Korean country of origin.

By contrast, Customs found in HQ 709098 (February 2, 1979), that imported components of a saxophone were substantially transformed by processing after importation which included substantial cutting, trimming, assembly, mounting, and adjusting of key, tube, and mouthpiece components. The U.S. manufacturer added 33 subassemblies and approximately 120 individual pieces to the saxophone body to form the finished instrument. This processing was performed at work stations on a production line, with each operator specializing in a fixed number and type of operations. In the case of the Gibson guitar, the operations are obviously far simpler, and involve fitting precut pieces together and adding a few minor components. There does not appear to be any significant cutting, shaping, or machining of the components. This is confirmed by the relatively short time (a little over two hours) required to complete the assembly exclusive of finishing.

A finding of substantial transformation was also reached in HQ 714639 (April 7, 1981), with respect to violins, violas, cellos and basses. The importer assembled stringed instruments from foreign components. The value of the foreign components was roughly equal to the value of the U.S.- origin parts and U.S. direct and indirect labor costs. A review of the submission for this ruling shows, notably, that the assembly process included milling, routing, planing, sanding, drilling, reaming, sawing, and shaping, in addition to finishing. This kind of physical change in the imported components, involving cutting, shaping, bending, and the like, would be required in the case of the Gibson guitar to result in a finding of substantial transformation.

We have also considered the extensive finishing of the surface of the instrument which is undertaken by Gibson. Refinishing alone accounts for more than 70% of the time expended in completing the Gibson instrument. In general, it is unlikely
that any change in the surface finish of an article would be regarded by Customs as sufficient to change its essential character so as to result in a substantial transformation. For example, previous Customs rulings have held that polishing and grinding of a semifinished aluminum bowl (C.S.D. 89-130), and glazing and painting of pottery and ceramics (C.S.D. 89-121) do not result in substantial transformations. The case of Carlson Furniture Industries Inc. v. United States, 65 Cust. Ct. 474, C.D. 4126 (1970), concerned unfinished parts of furniture, but it is noteworthy that the Customs Court's finding of substantial transformation was based upon the cutting, gluing, fitting, upholstering, and other manufacturing operations undertaken by the importer which the court considered more than mere assembly.

While finishing is important to the functioning of the guitar, i.e., a proper finish is necessary to produce the desired sound characteristics, it is our view that such finishing is only one of a number of production steps which contribute to the instrument's performance. Of at least equal and probably greater importance are the type of wood used, the seasoning of the wood, and the manner in which the box is constructed. Under the circumstances, we regard the finishing in the U.S. as merely one of several steps which, together, contribute to the desired sound, but which by itself or even in conjunction with the other assembly steps does not change the essential character of the instrument.

In addition to the foregoing principles of substantial transformation, tariff classification principles indicate that when major components of an article are imported for U.S. assembly, the imported components are classified under the provision for finished articles. Specifically, in C.I.E. 1975/64 (October 7, 1964), Customs ruled that incomplete hollow body guitars, consisting at the time of importation of basic drums and necks and finished after importation, would be classified as "other stringed instruments" in item 725.06, Tariff Schedules of the United States (TSUS). Customs applied General Headnote 10(h), TSUS, which provided that "unless the context requires otherwise, a tariff description for an article covers such article, whether assembled or not assembled, and whether finished or not finished."

Under the Harmonized Tariff Schedule of the United States (HTSUS), the successor to the TSUS, a similar General Rule of Interpretation, 2(a), directs that a reference to an article in a heading shall be taken to refer to the article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. The Gibson guitar components at issue have been classified under Heading 9202.9040.000, HTSUS, the provision for guitars valued at over $100. As applied here, the classification principles reinforce the finding that the guitar
components as imported constitute the essence of the instrument; no significant change, for tariff purposes, is brought about by assembly and finishing.

We conclude that the assembly of the Gibson guitar from major components which are imported does not result in a substantial transformation. The physical change is minor, and results in no change in the essential character of the guitar. The time involved in completing the assembly is not substantial, and the complexity of the operations and levels of skill required are modest. We note that the imported components are precut in order to fit together easily. We have not been provided with any data as to the value added to the guitar in the U.S., but it does not appear, in light of these other factors, that such data would change the conclusion reached here.

Accordingly, the ultimate purchaser of the imported guitar parts is not Gibson but the retail purchaser of the assembled guitar. Therefore the assembled guitar must be marked to clearly indicate to that ultimate purchaser its Japanese origin. In this case, the assembled guitar could be marked "Assembled and Finished in U.S. from Parts Made in Japan", or words to similar effect which clearly indicate the Japanese origin of the parts.


Imported guitar necks and bodies are not substantially transformed by assembly and finishing in the U.S., and must be marked so as to indicate their country of origin to ultimate purchasers in the U.S.


Harvey B. Fox
Director, Office of

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