Country of origin marking requirements applicable to certain automobiles to be imported from Malaysia

HQ 731568 July 31, 1989 MAR-2-05 CO:R:C:V 731568 jd CATEGORY: Marking Thomas B. McVey, Esq. Lane & Mittendorf 919 18th Street, N.W. Washington, D.C. 20006 Re: Country of origin marking requirements applicable to certain automobiles to be imported from Malaysia Dear Mr. McVey: This is in response to your letter of July 6, 1988, concerning the application of country of origin marking requirements to an automobile to be imported from Malaysia. We regret the delay in responding. FACTS: According to your submission, your client will be importing into the U.S. an automobile assembled in Malaysia. The components for the automobile will be sourced from various countries: the transaxel, i.e., the engine and transmission, is from Japan; plastic parts are from Australia; electrical parts are from the United Kingdom; textile and related products are from the U.S.; lamps and seatbelts are from Korea; and most or all of the remaining parts are from Malaysia. Although you did not provide details as to the assembly process, Customs takes notice of the sophistication of modern automobiles, and we have some familiarity with the procedures used in manufacturing such articles. ISSUE What is the country of origin of an automobile assembled in Malaysia from components of Japanese, Australian, British, U.S. and Malaysian origin? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that every article of foreign origin (or its container) 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 the English name of the country of origin of the article. --2-- In defining "country of origin", 134.1(b), Customs Regulations (19 CFR 134.1(b)), states in regard to articles produced with components from two or more countries that, "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'...." The test of substantial transformation is whether as the result of some manufacturing or processing operation an article emerges as a new and different article of commerce with a new name, character or use. Customs has previously ruled that the assembly in Taiwan of a typewriter from parts from Taiwan, Japan and third countries constitutes a substantial transformation such that the finished typewriters could be marked as products of Taiwan for country of origin marking purposes. The assembly combined hundreds of parts in a process taking approximately 36 to 46 minutes (730837 lw; June 10, 1988). In ruling 731076 (November 1, 1988), Customs determined that the assembly in Taiwan of an automobile with components from Taiwan, Japan and the U.S. was a substantial transformation of the components and rendered Taiwan the country of origin for purposes of 19 U.S.C. 1304. HOLDING: It is the opinion of this office that the subject automobiles are, for country of origin marking purposes, products of Malaysia. We believe that the manufacturing process taking place in Malaysia causes the component automobile parts to lose their separate identities and emerge from the assembly process as a new article of commerce with a new name, character and use. Marking indicating Malaysia as the country of origin displayed in a conspicuous place on the automobile will satisfy the requirements of 19 U.S.C. 1304. This ruling is rendered in regard to that statute only. Sincerely, Marvin M. Amernick Chief, Value, Special Programs and Admissibility Branch