United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2002 NY Rulings > NY H87121 - NY H87183 > NY H87126

Previous Ruling Next Ruling
NY H87126

January 17, 2002

MAR-2 RR:NC:N1:113 H87126


Mr. Karl F. Krueger
Danzas AEI Customs Brokerage Services
29200 Northwestern Highway
Southfield, MI 48034


Dear Mr. Krueger:

This is in response to your letter dated January 7, 2002, on behalf of Canimex requesting a ruling on whether it is acceptable to mark the container in which imported nylon rollers, made in China, are repackaged in the U.S. or Canada with the words “Made in Canada” or “Made in USA.” A marked sample in a blister pack was submitted with your letter for review.

The article consists of a blister pack containing two nylon rollers with metal shafts used on garage doors. The rollers, which are individually marked “China”, are sent in bulk to either the USA or Canada to be repackaged. The sample you supplied has a package that is marked “Made in USA” on the front. The rear of the package has the importers address in the United States.

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 C.F.R. 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 C.F.R. §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.

Section 134.1(d), Customs Regulations (19 C.F.R. §134.1(d)) provides that:

The ‘ultimate purchaser’ is generally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the ‘ultimate purchaser’ is the last person in the United States who purchases the good in the form in which it was imported.

In this case, the rollers are wholly obtained or produced in China, and undergo only minor processing (repackaging) in the United States or Canada. Under the principle set forth in U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940), if an imported article will be used in domestic 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. 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)).

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 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). Repackaging does not result in a substantial transformation. The country of origin of the rollers remains China. A claim of American or Canadian origin is misleading and illegal.

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. In this case, the ultimate purchaser of the rollers is the consumer who purchases the product at retail.

Section 134.46, Customs Regulations (19 CFR 134.46), deals with cases in which the words "United States," or "American," the letters "U.S.A.," any variation of such words or letters, or the name of any city or locality in the United States, or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appears on an imported article or its container, and those words, letters or names may mislead or deceive the ultimate purchaser as to the actual country of origin. In such a case, there shall appear, legibly and permanently, in close proximity to such words, letters, or name, and in at least a comparable size, the name of the country of origin preceded by "Made in," Product of," or other words of similar meaning. The purpose of this requirement is to prevent the possibility of misleading or deceiving the ultimate purchaser of an article as to the actual origin of the imported good.

In this case, the containers in which the articles are repacked must indicate the origin of the articles to an ultimate purchaser in the U.S. by having the words “Made in China” printed adjacent to the importer’s US address.

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 646-733-3018.


Robert B. Swierupski

Previous Ruling Next Ruling