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HQ 734653

October 22, 1992

MAR-2-05 CO:R:C:V 734653 RSD


Mr. Charles Johnson
Vice President
W.A. Phelps & Co., Inc.
One World Trade Center
Suite 2109
New York, N.Y. 10048

RE: Country of origin marking requirements for pieces of cut crystal; cutting of crystal; glass; blanks; substantial transformation; 19 CFR 134.1(b); 19 CFR 134.35; HQ 734387; HQ 734283

Dear Mr. Johnson:

This is in response to your letter dated April 8, 1992, on behalf of your client, Donegal Crystal U.S.A., Inc., requesting a ruling on the country of origin marking requirements for crystal pieces blown in Germany and hand-cut entirely in the U.S. You have submitted samples of the two uncut crystal blank bowls and the two finished cut crystal bowls for our consideration.


Donegal Crystal U.S.A. imports plain rough crystal blanks manufactured in Germany. The imported crystal blanks will be cut off or broken off from a glass blowers blow pipe or a mold. The crystal blanks will usually have defects such as bubbles. The imported crystal blanks are plain and rough.

After importing the crystal blanks, Donegal employs skilled craftsmen who cut it to size and shape it. The skilled craftsmen then hand-cut a design into the crystal blank. After the hand- cuts are completed, the crystal is smoothed and put into an acid bath for finishing. It is then polished.

It takes Donegal about 3 and 1/2 hours to complete its processing of a piece of crystal. Donegal purchases the plain sample crystal blank for $11.81. After the processing, Donegal claims that the value of the piece of crystal is $87.00 and it sells at wholesale for $105.

The two sample crystal pieces are bowls. The sample blanks are clear, but contain numerous imperfections such as bubbles and chips. The edges are rough and sharp. Both of the finished crystal bowls contain numerous intricate hand-cuts. In fact, most of the outer surface area of the finished bowls contain hand-cuts. One of the sample bowls has several different designs cut into its outer surface. The other sample bowl has had three curved sections sliced out of it so that it comes to three points. The shape and size of both finished bowls are different than that of the blanks. The edges of the finished pieces are smooth. It is our understanding that all the cutting is done in the U.S. by hand.


Does the extensive hand-cutting of the imported uncut crystal blank bowls in the U.S. constitute a substantial transformation?


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. Congressional intent in enacting 19 U.S.C. 1304 was 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." United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).

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 "country of origin" 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" within the meaning of the marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), 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. In such circumstances, the imported article is excepted from marking. The outermost containers of the imported article shall be marked. (See 19 CFR 134.35).

Customs has previously considered the cutting of crystal, as in this case, when the cutting was extensive and intricate. In HQ 734387, June 8, 1992, Customs ruled that crystal glassware "blanks" were substantially transformed into formal, elegant stemware suitable for indoor decoration by the extensive hand- cutting operations performed in Ireland. We based this determination on the fact that the hand-cutting operation was a substantial and intricate processing operation performed by highly skilled craftsmen. The hand-cutting significantly changed the appearance and the shape of the stemware imparting a decorative use to the glassware. In addition, the cutting added significant value. We also noted that the glassware lost its identity as mere glassware and became a new article bought primarily for its appearance, rather than for its utilitarian use.

Similarly, in HQ 734283, June 16, 1992, Customs found that a crystal blank bowl, vase, and basket were substantially transformed as a result of extensive and intricate hand-cutting done in Ireland. In that ruling, we noted that these items were largely bought for their appearance and that the hand-cuts were the key factor which made the crystal blanks into fine pieces of crystal which could be displayed.

The important factors in the two cases cited above which led Customs to conclude that the cutting of the crystal blanks was a substantial transformation are also present in this case. The cutting of the crystal is all done in one country, the U.S. The hand-cutting is extensive, intricate and performed by highly skilled craftsmen. The shape and the appearance of the crystal pieces was changed considerably. The crystal blanks were crude and not capable of use. Finally, the cutting added considerable value to the crystal pieces. Therefore, in accordance with the analysis of HQ 734387 and HQ 734283, we find that the crystal blanks are substantially transformed by the extensive hand- cutting done in the U.S. In accordance with 19 CFR 134.35, the imported crystal blanks are excepted from marking and only the outermost containers in which the blanks are delivered to Donegal Crystal USA, Inc. must be marked with the country of origin of the crystal blanks.

You also inquire as to whether the finished crystal bowls can be marked "Made In the U.S.A." The Federal Trade Commission ("FTC") has jurisdiction concerning the use of such a phrase; consequently, any inquiries regarding its use should be directed to the FTC in the future. The address is: The Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508. HOLDING:

The extensive and intricate hand-cutting of the uncut crystal glass blank bowls entirely in the U.S. substantially transforms the blank bowls. In accordance with 19 CFR 134.35, the imported crystal blanks are excepted from marking and only the outer most containers must be marked.


John Durant, Director

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