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NY H86061

December 21, 2001

MAR-2 RR:NC:1:102 H86061


Christopher E. Pey
Coudert Brothers LLP
1114 Avenue of the Americas
New York, NY 10036-7703


Dear Mr. Pey:

This is in response to your letter dated November 9, 2001 requesting a ruling on behalf of your client Watts Industries, herein after “Watts”. The issue raised is whether country of origin marking is required on imported parts for use in the manufacture of valves. Samples were submitted with your letter for review.

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 USC 1304.

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 the manufacturer subjects the imported article to a process which results in a substantial transformation of the article. 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. Pursuant 19 CFR 134.35, in such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked.

In your request you indicate that Watts imports a variety valve parts as well as some completed valves from various foreign sources. Watts assembles the imported parts and makes valves in manufacturing plants located throughout the United States. You also explain that the ruling request pertains only to the marking of foreign parts for valves, which are made by Watts in the United States from a combination of domestic and foreign parts, and request that the foreign parts be excepted from individual marking because they are substantially transformed by assembly operations performed by Watts, and that Watts is the ultimate purchaser of the imported parts.

You submitted information on the manufacture, assembly and testing of four sample valves that are typical of the products that Watts makes in the United States from a combination of domestic and foreign sourced components. You state that the overwhelming majority of the valves will be sold domestically to OEMs, distributors, and retailers. Further, no imported parts will be sold as spare parts because replacing a valve is more cost-effective than replacing parts.

Based on the information and samples provided we find that the subject valve parts are substantially transformed into articles with a new name, character or use, when incorporated with other components to produce finished valves. Accordingly, Watts is the ultimate purchaser of the parts in question.

In accordance with 19 CFR 134.35, the subject parts, provided that they are used by Watts in the assembly of completed valves and not sold separately in their condition as imported, are excepted from individual marking and only the outermost containers of the imported articles must be marked with 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 Kenneth T. Brock at 646-733-3009.


Robert B. Swierupski

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