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NY J86656

July 24, 2003

CLA-2-33:RR:NC:2:240 J86656


TARIFF NO.: 3304.20.0000; 3304.99.5000

Ms. Stacy Bauman
American Shipping Company Inc.
140 Sylvan Avenue
Englewood Cliffs, NJ 07632

RE: The tariff classification of various bulk cosmetics of US origin processed for retail sale in China

Dear Ms. Bauman:

In your letter dated July 1, 2003 you requested a tariff classification ruling on behalf of your client Topline Products Company.

Bulk cosmetics of US origin are exported to China for retail packing. The bulk cosmetics consist of wet/dry brow powder, concealer powder and bronzer powder. The powders are poured into aluminum pans. Pressure is applied to the pans compressing the powder. The aluminum pans are placed and glued into plastic compacts. The compact is packaged either onto a folding carton or on a blister card. The empty compacts and pans are products of China

Subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), provides for the free entry of products of the U.S. that are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1) are met. While some change in the condition of the product while it is abroad is permissible, operations, which either advance the value or improve the condition of the exported product render it ineligible for duty free entry upon return to the U.S. In United States v. John V. Carr & Sons, Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F.Supp. 1390 (1972), 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedule of the United States (TSUS) (the precursor to subheading 9801.00.10, HTSUS). The foreign processes at issue in the instant case also exceed mere repackaging. Accordingly, the U.S.-origin eye shadow and facial powder are ineligible for duty-free entry under subheading 9801.00.10, HTSUS, upon its return to the United States.

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 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.

Merchandise that is "of foreign origin," i.e., of a country of origin other than that of the U.S., is subject to the requirements of 19 U.S.C. 1304). In Upjohn Co. v. United States, 623 F. Supp. 1281 (CIT 1985), the U.S. Court of International Trade stated that:

[e]xported American products retain their identity as American products, provided they are not transformed into new products while abroad." Customs has ruled that products of the U.S. which are exported for further processing and subsequently returned, are not subject to country of origin marking upon importation to the U.S. unless the further processing in the foreign country constituted a substantial transformation of the product.

A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use that differs from the original material subjected to the process. In determining whether the assembly of parts or materials constitutes 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.

In this case, bulk cosmetic powder from the United States is sent to China, where it is measured and compressed into individual metal pans, which are placed/glued into a compact. While these operations exceed mere packaging for purposes of subheading 9801.00.10, HTSUS, they do not effect any significant change in the character or use of the cosmetic powder for purposes of establishing country of origin. Therefore, it is our determination that the foreign processes do not constitute a substantial transformation and the cosmetic powders remain products of the United States. Accordingly, the imported cosmetic powders are not subject to the country of origin marking requirements of 19 U.S.C. 1304. If a good is determined to be an article of U.S. origin, it is not subject to the country of origin marking requirements of 19 U.S.C. ยง1304. Whether an article may be marked with the phrase "Made in the USA" or similar words denoting U.S. origin, is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C. 20508 on the propriety of proposed markings indicating that an article is made in the U.S.

The applicable subheading for the wet/dry brow will be 3304.20.0000, Harmonized Tariff Schedule of the United States (HTS), which provides for Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or suntan preparations; manicure or pedicure preparations: Eye make-up preparations. The rate of duty will be free.

The applicable subheading for the concealer and bronzer will be 3304.99.5000, Harmonized Tariff Schedule of the United States (HTS), which provides for Beauty or make-up preparations and preparations for the care of the skin (other than medicaments), including sunscreen or suntan preparations; manicure or pedicure preparations: Other. The rate of duty will be free.

Perfumery, cosmetic and toiletry products are subject to the requirements of the Federal Food, Drug and Cosmetic Act, which is administered by the U.S. Food and Drug Administration. You may contact them at U.S. Food and Drug Administration, Office of Cosmetics and Colors 5100 Paint Branch Parkway, College Park, MD 20740-3835 (202) 418 3412.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 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 Stephanie Joseph at 646-733-3268.


Robert B. Swierupski

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