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HQ 561450

April 14, 2000

MAR-05 RR:CR:SM 561450 KKV


John M. Peterson, Esq.
Neville, Peterson & Williams
80 Broad Street – 34th Floor
New York, NY 10004

RE: Country of origin of certain household coffee (espresso) machines assembled in Italy from domestic and foreign components

Dear Mr. Peterson:

This is in response to your letter dated July 12, 1999 (and subsequent facsimile dated July 27, 1999), on behalf of FrancisFrancis! USA, Inc., which requests a binding ruling regarding the country of origin of certain household coffee (espresso) machines assembled in Italy from domestic and foreign components. We regret the delay in responding.


The merchandise at issue is the X-1 home espresso machine, which is composed of approximately 60 components (not including fasteners), including heating elements, boilers, pressure vessels, grounding connectors, piping and electrical connectors. The machine utilizes heat to boil water to extremely high temperatures, so that some significant portion of the water is transformed into steam; both the water and steam are maintained under extremely high pressure.

We are informed that the machine will be manufactured in Italy by Quaha Italia S.r.l. of Trieste, using domestic (Italian) and foreign components. The pump system and electronic temperature control components will originate in Italy, while the boiler and housing components will originate in Spain. The principle steps in the assembly process, all performed in Italy, are as follows:

The plastic feet and guides will be attached to the metal body for the X-1 espresso maker. Components assembled during this processing step will include rivets, screws, washers, growers, metal body components, body covers, drawer sub trays, onyx bases, plastic guides, and O-rings;

Rubber pump brackets are connected to the body of the home espresso machine, together with a pump, an S2 valve, a silicon intake tube, a teflon tube and a connector. Components assembled during this step of the production process include a 110 volt electric water pump, a cable cover, a precisely-machined rubber O-ring, and a silicon intake tube;

The boiler and bayonet support components are attached to the body of the espresso maker, together with the various components comprising the espresso machine’s steam valve. The boiler is then connected to the water pump using a teflon tube and connector. Components assembled during this part of the assembly process include an S2000 steam valve, an X-1 valve steam tube, a D-6 steam outlet and cover, and an aluminum or stainless steel boiler (either 120 or 220 volts). A bayonet support, teflon tube, and O-ring are also assembled during this part of the manufacturing operation. In addition, the entire boiler assembly is made during this stage of the manufacture. Components used to fabricate the boiler assembly include insulated sensors, anti-return units, security valves, steam connectors, the upper and lower boiler chamber halves, a gasket, a filter holder gasket, a silicone boiler gasket, an anti-return pivot and spring, a safety fuse fixing clip, an electrical terminal, a coffee thermostat, a steam thermostat, a heating element, a quick connection clip, a grower, and related fasteners;

An electronic thermostat, together with 110 volt electrical wiring assemblies, are attached to the body of the espresso maker, and a sensor is assembled to the boiler. The connecting cable for the electrical wiring is then fastened to a three-way block terminal and a condenser. Components used in this phase of the assembly include electrical terminals, wiring, an electrical thermostat support, a terminal bock, a characteristic plate, and a plate rivet;

All electrical connections are made to the boiler, pump, thermostat, on/off switch, and signal light;

The switches, lights and thermometer are attached to the frontal mask of the espresso maker, and the sensor is attached to the boiler. Components involved in this step of the processing include the mask for the espresso maker, a signal light, a switch nut, a switch waster, and a niquel screw;

The assembled components of the machine are subjected to an electrical and hydraulic test.

The X-1 cover, with chromium-plated railing, is attached to the body of the machine. The drawer, water tank and grill are attached to the espresso machine; and

The X-1 espresso machine and filter holder are packaged into plastic bags, placed into an inner box with an instruction manual, and the entire assembly is placed into a cardboard outer box.


What is the country of origin of the espresso machine assembled in the manner set forth above?


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).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. "Country of origin" is defined in section 134.1(b), Customs Regulations (19 CFR 134.1(b)), 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.

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 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 issue of whether a substantial transformation occurs is determined on a casebycase basis.

In determining whether the processing operations constitute 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. If the manufacturing or combining process is merely a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See, Uniroyal Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (CIT 1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, Customs Service Decision (C.S.D.) 80111, C.S.D. 89129, and C.S.D. 90-51.

Where, as here, more than 60 components (not including fasteners) are subjected to a series of operations, many of them complex, which must be performed by skilled technicians (i.e., specialized mechanics, electricians), the assembly operations in Italy are sufficient to effect a substantial transformation of the component parts into an article with a new name, character and use – a home espresso machine. Therefore, the country of origin of the finished espresso machine is Italy, and must be marked accordingly upon importation into the U.S.


Based upon the information provided, components made in Italy and other countries, which are assembled into a finished home espresso machine in Italy as a result of complex operations performed by skilled technicians, undergo a substantial transformation into a new and different product with a new name, character and use. Therefore, the country of origin of the finished espresso machine is Italy, and must be marked accordingly upon importation into the U.S.

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
Commercial Rulings Division

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