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HQ 735281

February 24, 1994

MAR 2-05 CO:R:C:V 735281 RSD


Mr. Ike Inagaki
Okaya (U.S.A.) Inc.
Parker Plaza
400 Kelby Street
Fort Lee, New Jersey 07024

RE: Country of origin marking requirements for micro floppy disks; computer components; abbreviations; Hong Kong; 19 CFR 134.45; HQ 732087

Dear Mr. Inagaki:

This is in response to your letter dated July 16, 1993, concerning the marking requirements for micro floppy disks imported from Hong Kong or China. We regret the delay in responding.


The disks that you are planning to import are blank and your customer will install a program onto the disks at its plant in the United States. They will then sell the disks with a program label. You state that you want to mark the country of origin cartons rather than on each disk. 50 floppy disks are stored in one carton box, which you call the inner carton, and 10 to 20 inner cartons are put into a bigger carton, which you call the outer carton. Instead on marking each disk you want mark both inner and the outer cartons either "Made in H.K." or "Made in China."


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 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. 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.

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. 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 section 134.35, Customs Regulations).

In HQ 732087 (February 7, 1990), (copy enclosed) Customs ruled that writing a program onto a blank computer diskette was a substantial transformation of the diskette. Accordingly, under the country of origin marking law, your customer, the party performing the programming is considered the ultimate purchaser of the blank diskette for country. Therefore, the individual diskettes can be excepted from country of origin marking provided that the diskettes are imported in properly marked containers. Customs officials at the port of entry must be satisfied that the diskettes will reach the ultimate purchaser in these sealed containers. In this is case, if your customer receives the diskettes in properly marked sealed cartons then the individual disks would be excepted from marking.

We do not consider "H.K." to be an acceptable abbreviation for Hong Kong. Section 134.45 of the Customs Regulations (19 CFR 134.45), states that abbreviations which unmistakably indicate the name of a country are acceptable. We find that "H.K." does not unmistakably indicate the country name Hong Kong.

With respect to your question as to whether there was any difference in duty for products made in Hong Kong or China, we have been advised by the Metal and Machines Classification Branch that the blank computer diskettes are classified as unrecorded media under 8523.90.00 of the Harmonized Tariff Schedule of the United States (HTSUS) and would be dutiable at rate of 4.2%. Both Hong Kong and China are presently under the column one so that there is no difference in the rate of duty for products made in either country. We have also been advised by the Customs Office of Trade Operations that anti-dumping duties or countervailing duties are not being assessed against computer micro disks classified under 8523.90.00 of the HTSUS for products of China and Hong Kong.


Writing a program onto a blank micro diskette is a substantial transformation of the diskette. Under 19 CFR 134.35, the individual diskettes are excepted from marking provided that their outermost containers which reach the ultimate purchaser are properly marked with the country of origin of the diskettes. "H.K." is not an acceptable abbreviation for Hong Kong.


John Durant, Director

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