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HQ 560223

November 25, 1997

MAR-05 RR:TC:SM 560223 KKV


Mr. Dan Gluck
Serko & Simon LLP
One World Trade Center
Suite 3371
New York, NY 10048

RE: Country of origin of imported "ceramic colors image" decals, bone china; substantial transformation; decalcomania; organic materials burned away during domestic processing; modification of HRL 734052; C.S.D. 93-1; imported chinaware exempt from marking where certification executed; 19 CFR 134.32(d); 19 CFR 134.26

Dear Mr. Gluck:

This is in response to your letter dated December 2, 1996, on behalf on Waterford Wedgwood USA, Inc. ("Wedgwood"), which requests a binding ruling regarding the country of origin of certain articles of china imported into the United States from England for further processing. Samples of a decal and a china plate at two stages of the production process have been submitted for our examination.


We are informed that Wedgwood intends to import into the U.S. glazed, bone china tableware, accessories and giftware of English origin. Wedgwood also intends to import decals of various designs of Japanese, English and other sources of foreign origin into the United States. In the United States, Wedgwood will transfer the designs to the glazed, bone china via application of the decals and kiln firing, a process referred to as "decalcomania." In addition to the decal of the design pattern, Wedgwood intends to simultaneously apply a decal of the backstamp, which will indicate the country of origin of the finished plate, in addition to other information.

With regard to the sample plate submitted for our examination, we are informed that, as a part of the processing performed in the U.S., the decal is removed from the paper backing and placed onto a glazed, but undecorated plate. Additionally, the plate is placed into a kiln and baked, during which:

1. the thousands of granules that make up the design will undergo a metamorphosis by melting and coagulating into one mass;

2. the melted and coagulated paint will adhere to the article of china;

3. the adhesive will melt;

4. the clear plastic film will burn away; and

5. a gold band will be applied to the rim, and the plate will be refired.

The Customs Service Office of Laboratories and Scientific Services was consulted with regard to the request for a binding ruling. In a report issued by that office, we are informed that the type of decal in question, a "ceramic colors image" which is suitable for the decoration of pottery and porcelain only, consists of a paper backing, an organic temporary adhesive or water-soluble adhering agent, plastic film, inorganic pigments in a given design and, in some cases, an inorganic adhesive (usually silicate).

To prepare the decal for firing, the decal is dampened, placed on the pottery or porcelain material (such as a plate) and dried. The paper backing is removed. Although the backing has been removed, the presence of a temporary adhesive or water-soluble adhering agent keeps the image affixed to the plate until heat is applied. Once the plate has reached a given temperature in the kiln, the organic materials (adhering agent, plastic film and carrier resins (if present)) are burned away. The plate is then raised to a higher "service" temperature, at which point the pigments will partially vitrify. Under partial vitrification, the pigment does not completely melt but the particles become soft and stick together without totally losing their shape. There is no chemical change in the pigment, but the applied heat results in a change in the crystallinity of the pigmentatious materials. Having undergone partial vitrification in the firing process, the design is transferred to the plate, where it has permanently fused with the porcelain or pottery surface.

You inquire whether the decals themselves or the finished articles must be marked with the country of origin of the imported decals and whether the finished china articles may be marked, "Fine English China" or "Made in England" or similar wording. In your comment on Customs proposed modification of Headquarters Ruling Letter (HRL) 734052, dated October 17, 1991, you state that Wedgwood wishes to import the china with the country of origin affixed to the containers but not to the china itself. As part of the subsequent decalcomania process in the U.S., a back stamp decal will be applied individually to the chinaware articles which will indicate their country of origin.


Whether imported "ceramic colors image" decals are substantially transformed when applied to porcelain or ceramic articles for purposes of the country of origin marking requirements of 19 U.S.C. 1304 and 19 CFR Part 134.


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 United States 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 United States the English name of the country of origin of the article. By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are 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., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).

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 United States.
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 this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

It is a well established policy, and it is not disputed here, that the decoration of imported ceramic or china articles by means of painting or decalcomania does not substantially transform these imported articles (See Treasury Decision (T.D.) 89-21, 23 Cust.Bull. 157 (1989); See also HRL 707057, dated December 10, 1976; HRL 058996, dated June 21, 1979; HRL 724978, dated July 13, 1984 (also published as Customs Service Decision (C.S.D.) 84-113, 18 Cust. Bull. 1111 (1984); HRL 732964, dated August 3, 1990); HRL 735595, dated August 2, 1994 and HRL 558734, dated November 4, 1994).

While agreeing that the plate is not substantially transformed by means of decoration, you assert that the imported decal is substantially transformed as a result of becoming affixed to the china plate. Customs has previously discussed the substantial transformation of decals. In HRL 734052, dated October 17, 1991 (also published as C.S.D. 93-1, 27 Cust. Bull. 10 (1991)), Customs considered porcelain dinnerware and decals imported into the U.S. for domestic assembly into finished signed, numbered collectable (non-food use) plates. Customs determined that neither the plates nor the decals were substantially transformed by the domestic application of the decals to the plates, as the decalcomania process left the identity of both the plates and decals intact. Upon review, however, we note that while the issue of substantial transformation was discussed in great detail with regard to the imported plates, the imported decals were not addressed with particularity. Therefore, we revisit this issue here.

The well-established test for determining whether a substantial transformation has occurred is derived from language enunciated by the court in Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 562 (1908), which defined the term "manufacture" as follows:

Manufacture implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labor and manipulation.
But something more is necessary, as set forth and illustrated in Hartranft v.
Wiegmann, 121 U.S. 609. There must be transformation; a new and different article must emerge, having a distinctive name, character or use.

Simply stated, a substantial transformation occurs "when an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing." See Texas Instruments, Inc. v. United States, 69 CCPA 152, 681
F.2d 778 (1982) (cited with approval in Torrington Co. v. United States, 764 F. 2d 1563, 1568 (1985)).

In C.S.D. 93-1, supra, Customs determined that no substantial transformation of the decals had taken place because "the decalcomania process left the identity of both the plates and decals intact." However, in the matter before us, while the pigment design of the "ceramic colors image" is, indeed, transferred intact, the "decal" itself undergoes significant changes as a result of domestic processing. The article at issue, a "ceramic colors image" decal, is, by its very nature, a temporary article which serves as an instrumentality of transference of ceramic colors. In the vitrification process, organic agents present in the original decal (temporary adhesive or water-soluble adhering agent plastic film and carrier resins) are burned away and the transferred pigment undergoes a change in crystallinity. Once partially vitrified, it permanently fuses to the surface of the chinaware. It is no longer a "decal" but is a permanent part of the plate (or other chinaware article). Inasmuch as the organic agents present in the original decal are no longer present to assist in a second transfer, what remains is not a "decal" but the pigment image whose revitrification (if possible) would ruin both the pigment design and the plate or other china article upon which it rests. Consequently, as a result of processing, the original decal has undergone a change in name, character and use -- prerequisites for a finding of a substantial transformation. Therefore, the U.S. processor is the "ultimate purchaser" of the imported decals. See 19 CFR 134.1(d) and 134.35. Accordingly, neither the porcelain articles nor the decals themselves must be marked with the country of origin of the decals. However, the outermost containers in which the decals are imported must be marked with the country of origin of the decals.

In regard to your request that Wedgwood be permitted to import the chinaware articles with the country of origin marked on the containers rather than on the chinaware itself, section 134.32(d), Customs Regulations (19 CFR 134.32(d)), exempts from the marking requirements those articles for which the container will reasonably indicate the origin of the articles. Therefore, provided the china is imported in properly marked containers, the certification set forth in section 134.26, Customs Regulations (19 CFR 134.26), is executed, the plates are not required to be individually marked at the time of importation. After processing in the U.S., however, the china must be individually marked prior to reaching the ultimate purchaser. With regard to the marking of porcelain plates, Customs has held that the plates must be individually marked with a more permanent means than adhesive stickers in order to satisfy the country of origin marking requirements of 19 U.S.C. 1304. See HRL 734052, supra, and C.S.D. 84-113, supra. The proposed markings, "Fine English China" or "Made in England" or similar words meet the requirements of 19 U.S.C. 1304 and 19 CFR Part 134.


Based upon the described facts, the application of a "ceramic colors image" decal to finished porcelain articles results in a substantial transformation of the imported decals and the U.S. processor is the ultimate purchaser of the imported decals. Thus, neither the finished porcelain articles nor the decals themselves must be marked with the country of origin of the decals. Accordingly, the holding in HRL 734052, dated October 17, 1991, also published as C.S.D. 93-1, 27 Cust. Bull. 10 (1991) is hereby modified as it pertains to imported decals. The imported chinaware articles are excepted from individual marking at the time of importation pursuant to 19 CFR 134.32(d), provided they are imported in properly marked containers and the 19 CFR 134.26 repacking certification is executed. After processing in the U.S., however, the chinaware articles must be individually marked with their own country of origin legibly, indelibly, and by a more permanent means than adhesive stickers. In addition, the outermost containers in which the decals are imported must be marked with their country of origin.

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.


John Durant, Director
Commercial Rulings Division

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