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HQ 733883

February 22, 1991

MAR-2-05 CO:R:C:V 733883 KG


Midas Optical Co. LT.
632-1 Deung Chon-Dong
Gang Seo-Gu
Seoul, Korea
Att: Mr. Young Il KIM

RE: Country of origin marking of imported eyeglass frames; substantial transformation; 19 CFR 134.32(m); 19 CFR 10.22; subheading 9802.00.80 HTSUS

Dear Mr. Young:

This is in response to the letter of October 11, 1990, submitted by the Customs Attache in Korea on your behalf requesting a country of origin ruling regarding imported eyeglasses. Samples of the unfinished and finished eyeglass frames were submitted for examination.


Your company proposes to make eyeglass frames. In the U.S., the front is cast in a mold with parts of the hinge imbedded and the temples are injection molded without a hinge. The fronts and temples are shipped to Indonesia where they are assembled into eyeglass frames, deburred, colored with dies, coated with lacquer, inspected and packaged. You ask whether it is acceptable to stamp "Made in U.S.A." on the finished frames.


What are the country of origin marking requirements for the imported eyeglass frames?


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 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. The Court of International Trade stated in Koru North America v. United States, 701 F.Supp. 229, 12 CIT (CIT 1988), that: "In ascertaining what constitutes the country of origin under the marking statute, a court must look at the sense in which the term is used in the statute, giving reference to the purpose of the particular legislation involved. The purpose of the marking statute is outlined in United States v. Friedlaender & Co., 27 CCPA 297 at 302, C.A.D. 104 (1940), where the court stated that: "Congress intended that the ultimate purchaser should be able to know by an inspection of the marking on the 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 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."

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 the country of origin of an article 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 for country of origin marking purposes. However, there is a different definition of the country of origin for American goods assembled abroad eligible for the partial duty exemption set forth at subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States ("HTSUS").

I. Subheading 9802.00.80, HTSUS eligibility of these eyeglasses

Section 10.22, Customs Regulations (19 CFR 10.22), provides that assembled articles entitled to the partial duty exemption set forth at subheading 9802.00.80 of the HTSUS are considered products of the country of assembly for the purposes of country of origin marking. Because there is a different definition of country of origin for goods assembled abroad with U.S. components which are eligible for the partial duty exemption set forth at subheading 9802.00.80 of the HTSUS, the threshold question presented here is whether these eyeglasses meet these eligibility requirements.

HTSUS subheading 9802.00.80 provides a partial duty exemption for:

[a]rticles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process such as cleaning, lubrication, and painting.

All three requirements of HTSUS subheading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full value of the imported assembled article, less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 10.16(c), Customs Regulations (19 CFR 10.16(c)), which lists examples of operations not considered incidental to the assembly process, includes painting primarily intended to enhance the appearance of an article or to impart distinctive features or characteristics, and dying. In this case, both the fronts and temples are dyed abroad. Since this operation is not considered to be incidental to the assembly process, the fronts and temples would not be entitled to the partial duty exemption set forth at subheading 9802.00.80 HTSUS and 19 CFR 10.22 would not apply.

II. Substantial transformation analysis

Since it has been determined that the eyeglasses are not eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, the standard set forth at 19 CFR 134.1(b) applies. For articles not wholly manufactured, produced or grown in a single foreign country, this standard turns on the question of substantial transformation. A substantial transformation occurs when articles lose their identity and become new articles having a new name, character or use. United States v. Gibson- Thomsen Co., 27 C.C.P.A. 267 at 270 (1940), National Juice Products Association v. United States, 10 CIT 48, 628 F.Supp. 978 (CIT 1986), Koru North America v. United States, 12 CIT ___, 701 F.Supp. 229 (CIT 1988).

In this case, the manufacturer states that 90% of the value of the frames is attributable to the processing and parts made in the U.S. The temples and fronts made in the U.S. are unfinished eyeglass pieces which determine the basic shape and character of the finished eyeglass frames.

Customs ruled in HQ 709266 (July 11, 1978), that the assembly of eyeglass frames does not constitute a substantial transformation. With regard to the coloring and lacquering of the frames, Customs ruled in HQ 733693 (October 17, 1990), that applying epoxy and paint to sunglasses frames did not constitute a substantial transformation. That ruling was in accordance with C.S.D. 88-23 (August 12, 1988), in which Customs ruled that U.S.- made earrings painted a solid color in Canada are not substantially transformed. Painting the earrings was characterized as a "minor finishing operation which leaves the fundamental identity of the earrings intact" rather than the creation of a highly decorative article with artistic qualities. In this case no new article of commerce is created in Indonesia and there is no change in name, character or use as a result of the coloring, lacquering and assembly of the frame in Indonesia. Therefore, no substantial transformation occurs in Indonesia.

Section 134.32(m), Customs Regulations (19 CFR 134.32(m)), excepts from country of origin marking products of the U.S. exported and returned. 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 they are substantially transformed in a foreign country. See HQ 729519 (May 18, 1988). Since these fronts and temples are not substantially transformed in Indonesia, they would be excepted from marking in accordance with 19 CFR 134.32(m).

The Federal Trade Commission has jurisdiction over whether or not goods can be marked "Made in the U.S.A." and should be contacted in regard to that question.


The eyeglass fronts and temples are not entitled to the partial duty exemption set forth at subheading 9802.00.80 HTSUS and therefore, the country of origin rule set forth at 19 CFR 10.22 is not applicable.

The fronts and temples are not substantially transformed in Indonesia and therefore, are considered to be products of the U.S. exported and returned pursuant to 19 CFR 134.32(m). Therefore, the frames would not be required to be marked for the purposes of 19 U.S.C. 1304.


John Durant

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