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NY C86143

April 13, 1998

MAR-2 RR:NC:SP:221 C86143


Mr. Barry E. Powell
Grunfeld, Desiderio, Lebowitz & Silverman LLP 707 Wilshire Boulevard
Suite 4900
Los Angeles, CA 90017


Dear Mr. Powell:

This is in response to your letter dated April 1, 1998, on behalf of Pen-Tab Industries, requesting a ruling on whether an imported binder cover is required to be individually marked with the country of origin if it is later to be processed in the U.S. by a U.S. manufacturer. A marked sample was submitted with your letter for review.

The binder cover, which you describe as being made of 100 percent polyvinyl chloride (PVC), actually consists of two cardboard sheets measuring 10 1/2 inches by 11 1/2 inches, and one cardboard strip measuring 2 inches by 11 1/2 inches, heat sealed between two sheets of PVC. The combining of the cardboard and PVC forms a bifold binder cover with spine. After importation a binder mechanism will be riveted to the spine to form a loose-leaf binder. You have also included a sample of a textile bifold compartmented organizer with which the binder may be sold. The samples are being returned as you requested.

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.

In the instant case, the processes performed in the United States do not result in a substantial transformation such that the binder cover loses its identity in the finished loose-leaf binder. The cover is an essentially complete component which is not physically altered when combined with the binder mechanism and remains visible in the complete product. The combining of the cover with the mechanism involves a simple riveting operation which does not involve a significant investment in time, complex machinery, or technical skill. The manufacturing process is a minor one which leaves the identity of the imported article intact.

Nor does the binder lose its identity when it is sold with the textile compartmented organizer. The binder, which is identical to binders sold separately, is merely slipped into a sleeve in the organizer. The binder sold with the organizer does not lose its identity any more than a pen slipped into one of the writing utensil compartments in the organizer would lose its own identity.

In this case, the imported covers are not substantially transformed as a result of the U.S. processing, and therefore the consumer who purchases the finished binder at retail, whether sold separately or with the textile compartmented organizer, is the ultimate purchaser of the imported binder cover. Therefore, each cover is required to be marked with the country of origin "China."

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

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Joan Mazzola at 212-466-5580.


Robert B. Swierupski

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