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NY H82073

June 28, 2001

MAR-2 RR:NC:1:104 H82073


Ms. Nancy Jih
Peace International Corporation
831 Foster Avenue
Bensenville, Illinois 60106


Dear Ms. Jih:

This is in response to your letter dated May 24, 2001 on behalf of Hand Tool International of Lake Zurich, Illinois requesting advice on the country of origin marking requirements for imported tool kits and bulk shipments of bits, screwdrivers and adapters. Two unmarked samples of tool kits in textile tool rolls were submitted with your previous letter dated April 25, 2001 for review. The samples were returned as requested. Classification of these items was addressed in this office’s NY ruling letter H80677 dated May 15, 2001. This ruling will address only the marking of the items in question. You have indicated that the country of origin is Taiwan for each item.

The first sample included 4 screwdriver bits, a screwdriver handle and an extension adapter. The tool roll had pockets for the screwdriver handle and the adapter and a hard plastic strip riveted at each end to the inside of the roll. Four hard plastic sliders with posts were attached to this strip. The bits, which are mounted in a socket type holder, fit snugly over the posts for storage.

The second sample included 10 screwdriver bits (no handle or adapter). It had two hard plastic strips riveted to the roll, each with five sliding posts for the bits.

The kits in question cannot be considered as sets for tariff purposes as you indicated that the kits will not be imported in retail packaging. They may or may not be repackaged after importation. The textile tool rolls are not generic tool rolls.

You have requested marking guidelines for merchandise imported in two manners, i.e., (1) items imported as described above as tool kits in textile tool rolls and (2) bits, screwdrivers and adapters imported in bulk to be repackaged in the U.S. You also indicated that when shipped in bulk, shipments may contain only bits and/or a mixture of bits, screwdrivers and adapters. In the case of mixtures, the items will be separated after importation. The textile tool rolls will not be shipped in bulk.

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. The primary purpose of the country of origin marking statute 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)]

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. As provided in section 134.41(b), Customs Regulations [19 CFR 134.41(b)], the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is 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. If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, the ultimate purchaser of the bits, screwdrivers and adapters is the consumer who purchases the product at retail.

With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.

Neither the marking statute nor the regulations make any provision for the marking of kits. Treasury Decision 91-7 (“T.D. 91-7”) states, in part, that with regard to materials of foreign origin, "if the materials or components are not substantially transformed as a result of their inclusion in a set or mixed or composite good, then subject to the usual exceptions, each item must be individually marked to indicate its own country of origin.". Although T.D. 91-7 specifically addresses the country of origin marking of sets and composite goods by virtue of General Rule of Interpretation 3(b), the position set forth in that decision can be applied to the items at issue.

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.”. [Texas Instruments, Inc. v. United States, 69 C.C.P.A. 152, 681 F.2d 778 (1982) (cited with approval in Torrington Co. v. United States, 764 F. 2d 1563, 1568 (1985)] The combining of the items in question into kits does not constitute a substantial transformation because the resulting product is not a new article in which the items lose their separate identities. Each item remains clearly identifiable. None are considered to be an insignificant component. In the absence of any special requirements, the general country of origin marking requirements apply, i.e., every article that is imported into the U.S. must be marked to indicate its country of origin as determined by where the article underwent its last substantial transformation. Therefore, under section 304 of the Tariff Act, the items must be marked to indicate to the ultimate purchaser in the U.S. the foreign origin of the items.

An article is excepted from marking under 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)), if the marking of a container of such article will reasonably indicate the origin of such article. However, since the items are not imported in their marked retail container, whether the subject articles are excepted from individual marking under 19 CFR 134.32(d) is for the port director to decide. In this regard section 134.34, Customs Regulations (19 CFR 134.34), provides that an exception may be authorized at the discretion of the port director under 19 CFR 134.32(d) 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 U.S.; (2) The importer arranges for supervision of the marking of the containers by Customs officers at the importer's expense or secures such verification, as may be necessary, by certification and the submission of a sample or otherwise, of the marking prior to the liquidation of the entry.

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 Robert Losche at 212-637-7038.


Robert B. Swierupski

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