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HQ 559887

October 3, 1996

MAR-02 RR:TC:SM 559887 DEC


Ms. Ann Dea Chinni
Tate Engineering Systems, Incorporated
601 W. West Street
Baltimore, Maryland 21230

RE: Country of origin marking of loading arms; NY 850661; NY 866443; HRL 732940
HRL 731330; HRL 732350; HRL 558919; 19 CFR 134.35; substantial transformation

Dear Ms. Chinni:

This is in response to your letter of May 30, 1996, requesting a ruling concerning the country of origin marking requirements for top and bottom loading/unloading arms which will be built in the U.S. using, in part, imported components from India.


Tate Engineering Systems, Incorporated (Tate), specializes in the production of petroleum handling equipment. Tate intends to import swivel joints and torsion spring balance assemblies from India to be used in the production of top and bottom loading/unloading arms in the U.S. The loading/unloading arms will be installed at refineries and fuel terminals for the purpose of transferring petroleum products, acids, chemical solvents, and other fluids to and from vehicle and rail tankers. See NY 866442, dated September 11, 1991. The swivel joints will be used to connect two pipes which allow for varying degrees of movement or rotation of the pipes. See NY 850661, dated March 28, 1990.

The bottom loading/unloading arms will be welded, assembled, sandblasted, painted, and comprehensively tested in Tate's production facility in the U.S. You state that the partially assembled and/or fully assembled swivel joints and torsion spring balance will be not be in a condition to be sold as a final article when imported into the U.S. and that they will have no other use than for being modified and assembled into the bottom load/unload arm assembly.

You have submitted the following list of operations to be performed in the U.S.:

A. The imported shipping containers, containing the swivel joint and the torsion spring balance assembly will be opened and the contents checked against the bill of lading.

B. The components will be unpacked and the swivel joint with butt weld surfaces will be cleaned and inspected.

C. Individual components for the loading arm will be fixed in jigs to facilitate assembly.

D. The WNRF flange will be welded to the elbow at the swivel joint.

E. The primary tube will be welded to the two swivel joints.

F. The inboard arm will then be installed up to the WNRF flange on the header.

G. The split flange design will then be tightened.

H. Keeping the last elbow on the horizontal center line, the outboard arm is joined by welding.

I. The TTMA flange is then aligned with the bolt holes in the off-center line position and welded.

J. The TTMA flange joints (with gasket) are then tightened using nuts and bolts.

K. Keeping the outboard arm in the horizontal position, a sleeve to attach the torsion spring balance is then slid over the outboard arm.

L. The lever of the torsion spring balance is then fixed with a pin and nuts.

M. The sleeve is then tack welded to the outboard arm.

N. The end name tag is then tack welded to the bottom loading arm.

O. The connector end of the loading arm is then sealed with a blind plug.

P. The assembled bottom loading arm is then hydro tested.

Q. The rotation of each swivel joint is then tested for leaks.

R. After testing is complete, the bottom loading arm is evacuated of liquid.

S. The torsion spring balance springs are then tightened to check the balance of the loading arm.

T. After checking the balance of the loading arm, the torsion spring balance springs are loosened so the loading arm can be prepared for painting.

U. The surfaces are then prepared for painting by lightly sandblasting the loading arm assembly.

V. The bottom loading arm is then painted with one coat of primer and two coats of enamel paint.

W. After the paint has dried, an inspection of the loading arm is conducted to ensure the quality of the painting operation.

X. A comprehensive inspection of the loading arm is then performed to ensure that the finished product meets, or exceeds, all of the manufacturing requirements and specifications.

Y. The bottom loading arm is then prepared for shipment to a user or prepared for short-term storage.

A drawing depicting these operations was submitted with your ruling request together with brochures for the loading arms and the swivel joints.


What are the country of origin marking requirements of swivel joints and torsion spring balance assemblies imported from India to be used in the production of top and bottom loading/unloading arms in the U.S. as described above?


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 in 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. 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 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. If such substantial transformation occurs, then the manufacturer is 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. On the other hand, if the manufacturing or combining process is merely a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred and an appropriate marking must appear on the imported article so that the consumer can know the country of origin. Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1029 (CIT 1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983).

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.

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); 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); and HRL 558919, dated March 20, 1995 (an imported extruder subassembly is substantially transformed in the U.S. when it is wired and combined with the U.S. components to create a vertical extruder).

In this case, we find that the operations which involve the incorporation of the imported swivel joints and torsion spring balance assembly into the top and bottom loading/unloading arms result in a loss of the imported articles' separate identities. The use of the swivel joints and torsion spring balance assembly in the U.S. results in the complete integration of these components into the finished top and bottom loading/unloading arms analogous to the incorporation of various components as detailed in the rulings cited above and constitutes a substantial transformation of the imported swivel joints and torsion spring balance assembly. Accordingly, Tate will be deemed the ultimate purchaser of the imported swivel joints and torsion spring balance assembly and only their outermost containers must be marked to indicate that their country of origin is India. The finished top and bottom loading/unloading arms will be excepted from country of origin marking.

Please be aware that Customs will not address whether an article may be marked with the U.S.A. symbol. The determination of whether a good may be marked "Made in USA" under any circumstances is under the primary jurisdiction of the Federal Trade Commission and not the Customs Service. We therefore recommend that you contact the Federal Trade Commission, Division of Enforcement, located at 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20580, for any views concerning marking a product which is of U.S. origin with the "USA" symbol.


On the basis of the information submitted, we find that the imported swivel joints and torsion spring balance assembly are substantially transformed, and, therefore, are excepted from individual marking, provided the cartons in which Tate 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 produced in the manner described above.

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


John Durant

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