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NY H82435

June 28, 2001

MAR-2 RR:NC:N1:113 H82435


Mr. Aaron Feinberg
1777 East 10 Street
Brooklyn, NY 11223

RE: Country of origin marking of imported key blanks

Dear Mr. Feinberg:

This is in response to your letter dated June 5, 2001, on behalf of Commercial Metals, Inc., requesting a ruling on whether imported key blanks or slugs are 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. You did not mention the name of the country of origin of the imported article. Five samples were submitted with your letter for review. The finished article is marked “American Lock/USA.” The phrase “American Lock’ appears to be a trademark. Use of the phrase "made in U.S.A." or “USA” is within the jurisdiction of the Federal Trade Commission. Therefore, you should contact the FTC regarding the appropriateness of the use of this phrase. The FTC address is: Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508.

The merchandise consists of key slugs or key blanks. The slugs are key-shaped, having a clearly defined bow, shoulder and blade. After importation, they will be milled, coined, plated, and finally, cut to the lock. Milling creates the grooves to fit the lock cylinder. Coining puts a lip on the edge of the bow and shoulder.

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 HQ 558790, pencil slats, made in China, were imported in the US to be processed into finished pencils. The slats were subject to at least six processes before they were finished. Nevertheless, HQ held that “the pencil blank imparts the essence, or essential character, to the completed pencil. The pencil blank contains the lead ingredient which determines the end use of the finished product, and its underlying shape is retained through completion of the product. Thus, the character of the final product is predetermined by the shape and use of the imported article. While a change in name is a factor to be considered, it is not dispositive, as the determination must be based on the totality of the evidence. See National Hand Tool and Superior Wire, supra. The extensive processing performed in the U.S., in completing the ‘designer pencils’, while aesthetically pleasing, does not change the underlying shape of the pencil blank nor its primary function, as a writing tool, which use was predetermined upon importation. Under the circumstances, we find that the U.S. processing does not effect a substantial transformation of the imported pencil blank.”

In the same letter, HQ also noted that “a similar finding was made in Superior Wire v. United States, 867 F. 2d 1409 (Fed. Cir. 1989), where the appellate court affirmed the Court of International Trade's holding that no substantial transformation occurred from the multi-stage process of drawing wire rod into wire. In that case, the court noted that the "end use of the wire rod is generally known before the rolling stage and the specifications are frequently determined by reference to the end product for which the drawing wire will be used." Accordingly, the court found that the character of the final product was predetermined and that the processing did not result in a significant change in either character or use of the imported material. While the wire rod and processed wire had different names and identities in the industry, the court concluded that they were essentially different stages of the same product.”

In the same manner, what you refer to as a slug has a predetermined end use in a specific lock type. Since the imported articles are not substantially transformed as a result of the U.S. processing, they are required to be marked with the country of origin.

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 James Smyth at 212-637-7008.


Robert B. Swierupski

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