Country of origin marking of imported golf tees.

NY R01303 February 11, 2005 MAR-2 RR:NC:2:224 R01303 CATEGORY: MARKING Michael D. Mazzarella Expeditors International of Washington, Inc. 3 Technology Drive Peabody MA 01960 RE: Country of origin marking of imported golf tees. Dear Mr. Mazzarella: This is in response to your electronic ruling request dated January 13, 2005, on behalf of Pride Golf Tee Co., requesting a ruling on the country of origin and marking requirements of wooden golf tees that are imported in various stages of manufacture and subject to different degrees of processing 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 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. You have listed several scenarios that describe suggested conditions of importation and follow-up domestic processing operations. Our opinions follow. Scenario 1: The Pride Golf Tee Company imports China-made wooden dowel rods into the U.S. in bulk. The company lathes, paints, prints and packages the wooden dowel rods into golf tees at their U.S. manufacturing facility. In this first scenario, the imported china-made wooden dowel rods are substantially transformed as a result of the U.S. processing, and therefore the U.S. manufacturer is the “ultimate purchaser” of the imported dowel rods. Accordingly, upon importation into the U.S., these parts are exempt from individual marking and only the outermost containers of these parts are required to be marked with the country of origin "China". You note in your request that you would like to mark the retail packaging of the tees as follows: “Made in USA.” However, the Federal Trade Commission (FTC), Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, must decide questions regarding the acceptability of such a marking on the retail packaging. The FTC has primary responsibility under statutes when a “Made in USA” claim can be made. Scenario 2: Pride imports unfinished China-made tees in bulk into their U.S. manufacturing facility. Pride then sands, paints, inspects, prints and packages the tees for distribution at retail sale. It is our position that when the unfinished tees are imported into the U.S. from China, the articles are still identifiable as golf tees. The sanding and painting operations fail to cause the articles to lose their identity as golf tees and emerge from the processing as an article having a new name, character, or use. Thus, it is our determination that a substantial transformation has not occurred in the U.S. for country of origin/marking purposes. The country of origin of the golf tees in this scenario is the country where the unpainted, nonsanded tees were produced, i.e., China. Regarding the marking of the country of origin on the imported golf tees in this scenario and in scenarios 3, 4 and 5, you give us no information, either in your letter or in the supplemental literature provided, describing the “retail packaging” intended to be used with the subject merchandise and how the articles will be sold. We should point out that an article otherwise subject to individual marking may be excepted from this requirement where its container will reasonably indicate the origin of such article. 19 U.S.C. 1304 (a)(3)(D) and section 134.32(d), Customs Regulations (19 CFR 134.32(d)). Accordingly, if the golf tees are sold at retail in plastic bags, for example, and Customs is satisfied that the golf tees will remain in their container until it reaches the ultimate purchaser and if the ultimate purchaser can tell the country of origin of the golf tees by viewing the container in which they are packaged, the individual tees would be excepted from marking under this provision. Marking only the polybags with the country of origin is not acceptable, however, unless the Customs and Border Protection officials at the port of entry are satisfied that the golf tees will remain in the unopened properly marked polybags until they reach their final recipient. Scenario 3: Pride imports painted tees in bulk from China. In the U.S., Pride inspects, sorts, prints and packages the tees at their U.S. facility. Our reply to this third scenario is essentially the same as our reply to scenario 2. The country of origin of imported finished golf tees ready for inspection, sorting and packing in the U.S. is China. Scenario 4: Pride imports unfinished China-made tees in bulk. In the U.S., the company sands, paints, and sorts the tees. The finished product is then packaged into a bag along with U.S. made tees. Approximately 60 percent of the tees in this retail packing bag will be of U.S. origin. The origin of the foreign originating tees is China. The processing operations following importation into the U.S. do not change that designation. See scenario 2. Regarding the proposed commingling of U.S. made tees with tees of Chinese origin in a retail container as set out here and in scenario 5, you should consult with the FTC in the matter of the proper country of origin mark as we noted in scenario 1. Scenario 5: Finished golf tees are imported in bulk into the U.S. from China. These imported tees are packed together with tees of U.S. origin. Approximately 60 percent of the tees in a bag will be of U.S. origin. The country of origin of the imported, finished golf tees is the country where the tees were produced and finished, i.e., China. 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 Tom McKenna at 646-733-3025. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division