Country of Origin Marking for Imported Plastic Sports Beverage Bottles and Plastic Sports Beverage Bottle Components; Substantial Transformation; Ultimate Purchaser; 19 U.S.C. 1304; 19 CFR 134.35; 19 CFR 134.46.

HQ 734827 December 21, 1992 MAR-2-05 CO:R:C:V 734827 ER CATEGORY: Marking Ms. Julie C. Vair Air and Ocean Services James J. Boyle and Co. 720 3rd Avenue #2020 Seattle, Washington 98104 RE: Country of Origin Marking for Imported Plastic Sports Beverage Bottles and Plastic Sports Beverage Bottle Components; Substantial Transformation; Ultimate Purchaser; 19 U.S.C. 1304; 19 CFR 134.35; 19 CFR 134.46. Dear Ms. Vair: This is in response to your letter of June 15, 1992, on behalf of Sirich International, regarding the country of origin marking requirements for plastic sports bottles imported in a completely assembled condition as well as for various components for such bottles which are imported separately and are subsequently assembled in the U.S. with certain U.S. components to form complete sports bottles. You have also requested information as to the tariff classification of these articles for which you will receive a separate response. FACTS: The imported articles are plastic sports bottles, for holding liquids, and various components for such bottles. The bottles consist of the plastic bottle base, a 3 inch diameter plastic lid which screws onto the bottle, a cartridge designed to contain a blue ice pack, a plastic lid which fits onto the cartridge, an 11 inch plastic drinking straw and a 2 inch long plastic stopper for the straw which prevents the liquids in the bottle from leaking out through the straw. The bottles or components will be imported in one of three scenarios. Under the first scenario, all the components would be manufactured in Thailand and would be imported as complete sports bottles. Under the second scenario, the bottle base would be manufactured in the U.S. and all the remaining components would be manufactured in Thailand. Under the third scenario, all the components would be manufactured in the U.S. except the blue ice pack cartridge which would be manufactured in Thailand. Subsequent to importation into the U.S., the components described in scenarios two and three will be assembled together to form complete sports bottles. The importer proposes to mark these bottles with the words "Made in U.S.A." on the bottom. The Sirich Logo and the words "Redmond, WA." will also appear on the bottle; however, it is unclear from your submission precisely where on the bottle the words will be located. When sold at retail, you propose to hang a cardboard tag featuring the American flag and the words "Made in U.S.A." around the neck of the bottle. No information was provided regarding the proposed marking of the bottle in the first scenario. Samples of the components were submitted with the ruling request. ISSUE: What are the country of origin marking requirements for the plastic sports bottles imported in a fully assembled condition and for those bottles assembled in the U.S. with foreign and domestic components, as described above in the three scenarios? LAW AND ANALYSIS: Section 304 of the 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 United States 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 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. The primary purpose of the country of origin marking statute is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will. United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940). Part 134.1(d) defines the "ultimate purchaser" generally as the last person in the United States who will receive the article in the form in which it was imported. 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. However, if the manufacturing process is a minor one which leaves the identity of the imported article intact, the consumer or user of the article, who obtains the article after the processing, will be regarded as the "ultimate purchaser" (19 CFR 134.1(d)(1) and (2)). In determining whether the combining 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. Belcrest Linens v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed. Cir. 105, 741 F.2d 1368 (1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, C.S.D.s 80-111, 85-25, 89-110, 89-118, 89-129, 90-51 and 90-97. The sports bottle described in the first scenario is unquestionably a product of Thailand and should be marked as such. The bottles in scenarios two and three are not substantially transformed in the U.S. The components are imported in finished form and do not require any additional processing prior to the final assembly. Moreover, the so-called "assembly" consists merely of screwing together parts which are designed to be screwed and unscrewed during use. The cap is routinely unscrewed whenever the liquid is placed into the container, the ice cartridge is unscrewed whenever placed in the freezer prior to use, and all the components are disassembled when the bottle is washed. (See, HQ 734497 (June 8, 1992) involving the assembly of components to form a baby stroller.) In determining the exact manner in which the sports bottles described in the second and third scenarios should be marked it is helpful to look to T.D. 67-173, 1 Cust.Bull. 366 (1967) which involved the domestic assembly of fishing rods imported in an unassembled or partially assembled condition. There, Customs ruled that the assembly did not constitute a substantial transformation because the manufacture did not result in a new and different article. Accordingly, Customs found that one of the parts, such as the main reel housing, should be marked to indicate the country of origin so that the marking would be legible and conspicuous after the assembly of the reels. Also see, HQ 734214 (November 19, 1991). This "common sense" approach to marking is both practical and much less onerous to the manufacturer, who otherwise would be required to mark each piece or material of the finished article with country of origin. See, T.D. 91-7 (January 21, 1991). Therefore, in the second and third scenarios, the sports bottle must be marked with a conspicuous country of origin marking which clearly indicates that the bottle is assembled with some foreign components. Wording such as "Assembled in U.S. with parts made in U.S. and Thailand", or similar language, would be appropriate. The marking must also be legible and permanent enough so as to reach the ultimate purchaser. It is unclear from your submission where the words "Redmond, WA." will appear on the bottles described in the second and third scenarios. The location of these words will determine the placement of the country of origin marking, as explained below. Such words trigger the application of special marking requirements set forth in section 134.46, Customs Regulations (19 CFR 134.46). The purpose of this provision is to prevent the ultimate purchaser from being misled or deceived when the name of a country or place other than the country of origin appears on an imported article or its container. 19 CFR 134.46 requires that the name of the actual country of origin appear "in close proximity" to the U.S. reference and in lettering of at least comparable size. Additionally the name of the country of origin must be preceded by "Made in", "Product of", or other similar words and must also appear on the same side or surface as the U.S. reference so that the information is viewable in one inspection of the item. (See, HQ 734345 (March 20, 1992) and rulings cited to therein.) The marking described above, "Assembled in U.S. with parts made in U.S. and Thailand", would satisfy the country of origin marking requirements of 19 U.S.C. 1304 so long as it appears on the same side or surface as the words "Redmond, WA." Therefore if the U.S. reference is located on the bottom of the bottle, so must the country of origin marking. Use of the cardboard tags is permissible for the sports bottles in scenarios two and three so long as the marking legend described above is used (and not "Made in U.S.A.") and appears on the same side of the tag as the American flag. HOLDING: The sports bottles described above in the first scenario which are imported from Thailand into the U.S. in fully assembled condition, must be marked to indicate that their country of origin is Thailand. The sports bottles described above in the second and third scenarios which are assembled in the U.S. with foreign and domestic components must be marked in close proximity to the words "Redmond, WA.", using a marking legend such as "Assembled in U.S. with parts made in U.S. and Thailand". Sincerely, John Durant, Commercial Rulings Division