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NY H89069

March 15, 2002

MAR-2 RR:NC:N3:351 H89069


Randy L. Pohler
R.L. Pohler & Co.
201 Farley Lane
P.O. Box 422165
Del Rio, TX 78842-2165


Dear Mr. Pohler:

This is in response to your letter dated March 6, 2002, on behalf of your client, Sanford Enterprises of New Orleans, requesting a ruling on whether imported unfinished flags are required to be individually marked with the country of origin if they are later to be processed in the U.S. by a U.S. manufacturer. A sample of the imported item was submitted with your letter for review, but it was not marked.

The merchandise is described as pieces of 100% woven polyester fabric, either 16½” x 11” or 39¾” x 24½”, hemmed on three sides, with no printing or other design work. The pieces are considered “made up” for classification purposes by the hemming. You state that after importation, the pieces of fabric will be further processed by cleansing, application of art designs, hemming the fourth side, and packaging, to produce decorative flags or banners.

The applicable subheading for the hemmed fabric pieces will be 6307.90.9889, Harmonized Tariff Schedule of the United States (HTS), which provides for other made up textile articles. The general rate of duty will be seven percent ad valorem.

You also ask about the correct marking for the hemmed fabric pieces when they are imported from Mexico. 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 this case, the imported hemmed fabric pieces are substantially transformed into flags or banners as a result of the U.S. processing, and therefore the U.S. manufacturer is the ultimate purchaser of the imported fabric pieces and under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin “Made in Mexico.”

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 Mitchel Bayer at 646-733-3102.


Robert B. Swierupski

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