United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 NY Rulings > NY 804231 - NY 804345 > NY 804276

Previous Ruling Next Ruling
NY 804276

November 29, 1994

MAR-2-44:S:N:N8:230 804276


Mr. William Ortiz
S.J. Stile Associates Ltd.
153-66 Rockaway Boulevard
Jamaica, New York 11434


Dear Mr. Ortiz:

This is in response to your letter dated November 15, 1994, on behalf of your client, Red Devil, Inc. (Union, N.J.), requesting a ruling on whether wooden paint-scraper handles imported from Taiwan are required to be individually marked with the country of origin if they are later to be processed in the U.S. by a U.S. manufacturer. Unmarked samples, both before and after U.S. processing/packaging, were submitted with your letter for review.

The handles imported by your client are solid, formed pieces of wood having a size and shape resembling a paint brush. The narrow end of each sample has been drilled with a hang-up hole, and the broad end incorporates a slot designed to accommodate a metal paint-scraper blade. (Although you note that American oak is sent to Taiwan for use in making the handles, you apparently do not take issue with the fact that the cutting, shaping and drilling of the wood in Taiwan renders the resulting articles Taiwanese products.)

At its plant in New Jersey, your client, after importing the handles from Taiwan, attaches metal blades to them and places the individual, finished scrapers in printed retail blister packs. Attaching the blades, which are evidently of U.S. origin, is accomplished merely by mechanically pressing them into the pre- existing slots in the handles.

Your client believes that, because of this "processing" which takes place after importation, and because "the majority of the work and costs" are said to be in the blade, the handles should not have to be individually marked with their country of origin (Taiwan), and that the finished, packaged scrapers offered to the consumer should be considered products of the United States. (The submitted blister cards are printed with the phrase, "Made in U.S.A." In addition, Red Devil's New Jersey address appears on both the front and back of each card.)

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. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. 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 and that 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 find that in this case, however, the imported handles are not substantially transformed as a result of the U.S. processing. 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. Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. We believe that the mere insertion of a blade into a handle's slot is a minimal or simple operation here (presumably of very low relative cost), and one which does not cause the handle to lose its own identity. In its imported condition, the item is a scraper handle, and it remains so, despite the addition of a blade, when it is sold to the consumer. In this connection we note that the blade is not permanently attached to the handle, but is considered removable and replaceable. (The blister card provides the user with the proper replacement blade part number, together with simple changing instructions.)

Since the manufacturing (assembly) process here is merely a minor one which leaves the identity of the imported article intact, the consumer or user of the article, who obtains the article after processing, will be regarded as the ultimate purchaser. Accordingly, the imported items are required to be individually marked "Handle made in Taiwan," and must ultimately be placed in the retail package in such a way that this marking is clearly visible to prospective purchasers through the plastic "blister."

However, because the handles will not reach ultimate purchasers until after they are individually packaged by the importer, an acceptable alternative to the above marking requirements would be to follow the procedures outlined in 19 CFR 134.34. The latter provides that an exception under 19 CFR 134.32(d) may be authorized at the discretion of the district director for imported articles which are to be repacked after release from Customs custody under the following conditions:

(1) The containers in which the articles are repacked will indicate the origin of the articles to an ultimate purchaser in the United States.

(2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense, or secures such verifi- cation, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

If your client elects to utilize this marking alternative, approval of the district director and adherence to the above procedures would be necessary. The blister cards, rather than the handles themselves, would then be required to be marked "Handle made in Taiwan," legibly and in a conspicuous place. (Only the outermost import shipping containers of the handles would have to be marked at the time of entry.)

Please also bear in mind, under either marking scenario, the requirements of 19 CFR 134.46, which necessitates that the foreign country of origin marking (e.g., "Handle made in Taiwan") appear in close proximity (and in lettering of at least a comparable size) to any references to "U.S.A." or any localities therein. The sample blister cards each have three such references, in various places, and would thus trigger these requirements.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177).

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.


Jean F. Maguire

Previous Ruling Next Ruling