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HQ 558919

March 20, 1995

MAR-2-05 CO:R:C:S 558919 MLR


John A. Bessich, Esq.
Follick & Bessich, P.C.
1 Cross Island Plaza
Suite 226
Rosedale, New York 11422

RE: Country of origin marking of extruder subassemblies; vertical extruder; feed section; stainless steel hopper; gear reducer; thrust housing; barrel; drive unit; control cabinet; screw; assembly; substantial transformation;

Dear Mr. Bessich:

This is in reference to your letter of November 17, 1994, requesting a ruling on behalf of Davis-Standard Division of Crompton & Knowles Corporation ("Davis-Standard") regarding the country of origin marking of extruder subassemblies.


Davis-Standard is a domestic manufacturer and supplier of various machine tools and equipment, including several models of extruders. Extruders are machine tools which form metal or plastic components by "extruding"; that is, by pushing or driving the materials through a die with great force. Among the extruder models supplied by Davis-Standard are certain "vertical" extruders. The vertical extruders are mounted on a pedestal and are capable of swiveling or pivoting on a column bracket, thereby allowing the extruders to be positioned at any angle, from fully vertical to fully horizontal. Literature describing two models of vertical extruders were submitted with the ruling request.

The principal components of both vertical screw models consist of the following: (1) the extruder subassembly which includes the feed section and stainless steel hopper, the gear reducer and thrust housing, and the barrel; (2) the drive unit which includes the DC motor, power unit, and belt drive; (3) the electrical control cabinet or panel which incorporates solid-state temperature controllers, screw-speed indicator, drive ammeter, pilot light on-off controls, and wiring; and (4) the extruder screw which mixes and moves the material to be extruded through the die.

The extruder subassembly is manufactured in England and shipped to Davis-Standard in a partially knocked-down condition. After importation into the U.S., it is stated that the subassembly is assembled together with the drive unit which is made in the U.S. by an unrelated manufacturer, and the electrical control panel and the extruder screw which are both manufactured in the U.S. by HES, a separate division of Crompton and Knowles Corp. Assembly includes the complete wiring of the motor and control panel to the subassembly, followed by a complete set up and testing program to insure that the vertical extruder is operating within its design parameters.

The relative costs of the various components and their assembly are included in the record. The completed and tested vertical extruders are sold to domestic and foreign manufacturers of plastic components, which either specify the dies to be supplied by Davis-Standard or supply their own dies for use with the extruders.


Whether the incorporation of the subassemblies into the vertical extruders constitutes a substantial transformation, thereby excepting the subassemblies from country of origin marking.


The marking statute, section 304, 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. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and the 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.

For country of origin marking purposes, a substantial transformation of an imported article occurs when it is used in the U.S. in manufacture, which results in an article having a name, character, or use differing from that of the imported article. In such circumstances, the manufacturer or processor in the U.S. who converts or combines the imported article into the different article will be considered the "ultimate purchaser" of the imported article, and the article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35.

In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 85-25. However, the issue of whether a substantial transformation occurs is determined on a case-by-case basis.

It is claimed that the imported articles at issue consist of partially unassembled portions of vertical extruders which, in their imported forms, are totally and completely incapable of operation. Without the addition of the drive unit which includes the DC motor, power unit and belt drive; the electrical control cabinet or panel which incorporates solid-state temperature controllers, screw-speed indicator, drive ammeter, pilot light on-off controls, and wiring necessary to operate the extruder; and the extruder screw which mixes and moves the material to be extruded through the die, it is stated that the extruder subassembly is totally inoperative for any purpose. Even the addition of a suitable die would not enable the extruder to operate, since there is no power/drive source, control device or conveying mechanism, all of which are stated to be essential to enable the extruder to operate for its intended purpose. It is also stated that the U.S. components added, and the assembly and testing performed in the U.S. is substantial. Consequently, it is claimed that the imported subassemblies, when combined with the U.S. components, become new articles with a different name, character, and use. Accordingly, it is claimed that Davis-Standard is the ultimate purchaser of the imported extruder subassemblies, and therefore the subassemblies should be excepted from marking pursuant to 19 CFR 134.35.

In several rulings, Customs has considered six factors in order to determine whether imported goods combined in the U.S. with domestic products were substantially transformed for country of origin marking purposes:

(1) whether the article is completely finished; (2) the extent of the manufacturing process of combining the article with its counterparts as compared with the manufacturing of the subject article;
(3) whether the article is permanently attached to its counterparts;
(4) the overall importance of the article to the finished product;
(5) whether the article is functionally necessary to the operation of the finished article, or whether it is an accessory which retains its independent function; and, (6) whether the article remains visible after the combining.

In Headquarters Ruling Letter (HRL) 732940 dated July 5, 1990, Customs considered water pump assemblies comprised of 6-8 components including a casting, bearing, impeller, hub, seal, mounting gasket, and in some cases, a spacer, and tubes or plugs. The casting and bearing were the most costly components. Although the assembly process was not exceedingly complex, and in one instance a Taiwanese-origin casting was used to produce the water pump, which remained visible after assembly, a substantial transformation was found. The main reason was because the casting was only one of several important components of the water pump (the others were of U.S.-origin), and because it was permanently attached to the remaining components. See also HRL 731330 dated July 13, 1988 (imported spark plug insulator assemblies consisting of a ceramic insulator and a center electrode mounted in the insulator, and a ground electrode were considered substantially transformed in the U.S. by the welding of the ground electrode to a steel shell, bending the ground electrode to the desired shape, and mounting the insulator assembly in the steel shell using seals; accordingly, the imported items did not require individual marking); and HRL 732350 dated June 23, 1989 (imported transducers (i.e., microphones and receivers) wired to a faceplate, along with a signal processing circuit, which was then cemented into a shell to create hearing aids were considered substantially transformed and excepted from individual country of origin markings pursuant to 19 CFR 134.35, primarily because the transducers could not be removed from the shell).

Similarly, in this case, while the extruder subassembly consists of pertinent components of the extruder, we find that the drive unit, extruder screw, and control cabinet are also important components of the vertical extruder. The direct current motor drive is important for accuracy of control; the extruder screw heats, fluidizes, and transports the plastic to the die; and the controller cabinet ensures precise control of the heating or cooling zones on the barrel. See McGraw Hill Encyclopedia of Science & Technology (6th Ed. 1987); and Encyclopedia Britannica (15th Ed. 1975). Consequently, it is our opinion that the imported subassembly is substantially transformed in the U.S. when it is wired and combined with the U.S. components to create a vertical extruder. Accordingly, the imported subassemblies will be excepted from individual marking, provided the cartons in which Davis-Standard receives them are properly marked with their country of origin, and Customs officials at the port of entry are satisfied that the components will be assembled in this manner.


On the basis of the information submitted, we find that the imported subassemblies are substantially transformed, and, therefore, are excepted from individual marking, provided the cartons in which Davis-Standard receives them are properly marked with their country of origin, and Customs officials at the port of entry are satisfied that the components will be assembled in this manner.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


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