HQ 559021 - Country of origin marking requirements for spark plug wire sets which contain domestic and imported parts; substantial transformation - United States International Trade Commision Rulings

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HQ 559021

June 7, 1995

MAR-2-05 R:C:S 559021 WAS

CATEGORY: MARKING

Maureen D. Pearson, Esq.
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, IL 60661-3693

RE: Country of origin marking requirements for spark plug wire sets which contain domestic and imported parts; substantial transformation

Dear Ms. Pearson:

This is in reference to your letter dated February 1, 1995, on behalf of Robert Bosch Corporation ("Bosch"), concerning the country of origin marking requirements for spark plug wire sets which are assembled in the U.S. from domestic and foreign parts. In September 1994, you originally requested a ruling on this matter; however, this request was administratively closed by letter dated September 30, 1994, due to insufficient information. You have asked that the original ruling be reinstated, and that we treat your February 1, 1995, letter as a supplement to the original ruling request. We received a sample of the merchandise for our review.

FACTS:

Based on your letter dated December 22, 1993, Bosch sells silicone-jacketed spark plug wire sets to the U.S. aftermarket, which includes original equipment manufacturers and retail and auto stores. You state that the spark plug wire sets contain two types of wires; one type attaches to spark plugs, and the second type attaches to distributors.

The spark plug wire sets include an insulated, silicone-coated core wire, silicone boots, and terminals. The silicone boot combined with the terminal is often referred to as a "connector." Both the spark plug wires and distributor wires utilize the insulated core wire but have different connectors attached to the wire.

Bosch supplies the insulated wire and some of the terminals and boots to Ristance Products ("Ristance") for assembly. The insulated wire is sourced exclusively in the U.S. Most of the terminals and boots are supplied separately by Ristance, with all of the terminals and most of the boots being sourced in the U.S. The imported terminals and boots are die stamped with the country of origin before importation into the U.S. The assembly operations involved in the production of the spark plug wire sets are as follows:

1) The insulated wire is cut to proper lead lengths.

2) The wire insulation is stripped to expose the copper core 5/8".

3) The exposed wire strands are twisted together.

4) Terminals are then placed around each end of the cable core and crimped tightly.

5) The wires are placed on a conveyor that moves the subassembly to a booting station.

6) Boots are expanded and slid over the terminals and put into the proper location for terminal depth in the boot.

7) All wires are accumulated for each set and placed into a retail container along with a warranty card.

8) Retail containers are then put into master cartons consisting of 14 boxes per master carton.

9) Master cartons are palletized and shipped to Bosch's distribution centers.

You state that three quality control tests are performed, each at a different station by a different employee. The tests are as follows:

1) Pull Strength Test: This test involves attaching the connector of a completed wire to a test meter and pulling the connector until it detaches from the wire.

2) Electrical Test: A person trained to operate a volt meter attaches the completed wire to a meter, sends ohms through the wire, and measures the voltage to ensure that the wire will function. 3) Retail cartons are checked randomly to ensure that the wires are the correct length and that the appropriate number and combination of wires are contained within.

You claim that the production of the spark plug wire sets in the U.S. results in a substantial transformation of the foreign components into "products of" the U.S. for country of origin marking purposes. Therefore, you believe that the spark plug wire sets and their retail containers should not be subject to country of origin marking requirements.

ISSUE:

Whether the foreign boots and connectors are substantially transformed in the U.S. when they are assembled with other U.S. components to produce the spark plug wire sets, thereby excepting the foreign components from country of origin marking requirements.

LAW AND ANALYSIS:

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 (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its 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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

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. In U.S. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), the court held 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 and the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35.
We have previously held in Headquarters Ruling Letter (HRL) 557253 dated May 11, 1994, that the production of a coaxial electrical connector cables (CECC) from U.S.-origin coaxial cable, specialized connectors and insulated sleeves or sheathing results in a substantial transformation of the components into a "product of" St. Lucia, West Indies. In HRL 557253, the production of the finished CECC's involved three principal phases: first, the various connector components were assembled together to produce the finished connector; second, the connectors were assembled with the braided cable material; and third, sleeved cable materials, ferrule and connectors were finished to produce the finished article. We found that the turning, cutting, trimming, tinning, soldering, and heat-shrinking operations substantially transformed the various U.S.-origin components into a "product of' St. Lucia. However, we also found in HRL 557253 that the components used to produce the connectors did not undergo a double substantial transformation in the production of the final article.

In a similar case, HRL 556249 dated January 8, 1992, electronic wire was shipped to a GSP-eligible country, where it was cut to length, coiled, heated, reverse wound, trimmed and stripped at the ends, and assembled with connectors and shrouds to create retractile cord connectors. We held in that case that these operations resulted in a single substantial transformation. We also found that a second substantial transformation did not occur as a result of the assembly of the connectors with other materials, as these operations involved only a small number of components, which were merely attached, inserted and affixed to one another to form the completed article.

Based on your description of the assembly process and an examination of the sample, we conclude that the processing operations involved in the production of the spark plug wire sets constitute a substantial transformation. We are of the opinion that the production of the finished spark plug wire set is consistent with the production of the CECC and the retractile cord connectors in the above-cited cases in which we found that the assembly of wire with connectors and other components constituted more than a simple combining operation. In the instant case, the individual components of the spark plug wire sets lose their identity and become integral components of the finished article. Consequently, it is our opinion that the assembly of the various imported components with U.S.-origin components results in a new and different article of commerce with a new name, character and use. Accordingly, the U.S. manufacturer or processor is considered the ultimate purchaser of the constituent materials and, pursuant to 19 CFR 134.35, the imported components are excepted from country of origin marking, and only the outermost containers of the imported components are required to be marked. HOLDING:

Based on the information and sample provided, the assembly of the spark plug wire sets in the U.S. results in a substantial transformation of the foreign components into "products of" the U.S. Accordingly, the article itself is excepted from marking pursuant to section 134.35, Customs Regulations (19 CFR 134.35), and only the outermost container of the imported components must be marked.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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.

Sincerely,

John Durant, Director

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