Country of Origin of wooden nightstands and wardrobe

HQ H185121 December 13, 2011 OT:RR:CTF:VS H185121 EE CATEGORY: Marking Kristen S. Smith Sandler, Travis & Rosenberg, P.A. 1300 Pennsylvania Ave. NW, Suite 400 Washington, D.C. 20004 RE: Country of Origin of wooden nightstands and wardrobe Dear Ms. Smith: This is in reply to your letter, dated August 15, 2011, requesting a ruling on behalf of your client, Fairmont Designs (“Fairmont”), concerning the country of origin of certain wooden nightstands and a certain wardrobe. FACTS: You describe the pertinent facts as follows. Fairmont imports and sells furniture manufactured by a factory located in Taiwan. You state that the products at issue, two models of wooden nightstands and a wardrobe, are manufactured in Taiwan using materials from the U.S., Malaysia, Taiwan, China, and New Zealand. You state that the production process for each of the three models is the same. King Nightstand The king nightstand consists of a particleboard frame and one drawer unit. The drawer’s side, front, back and center panels are constructed from solid wood materials of U.S. or New Zealand origin which are shipped to China where they are cut-to-size. The solid wood pieces are then sent to Taiwan for additional processing and assembly. The drawer’s bottom panel is constructed in Taiwan from Malaysian medium-density fiberboard (MDF) where it is cut-to-size and further processed. In addition to the panels noted above, certain wood edge bands, the front bottom line, upper and upper rear rails and enhanced panels are also wood parts of U.S. origin which are shipped to China where they are cut-to-size. These parts are then sent to Taiwan where they are further processed and assembled. The king nightstand’s other major parts include the top panel, side panel, back panel, and rear bottom line which are constructed from particleboard. The particleboard of Malaysian origin is shipped to Taiwan where it is cut and further processed. Veneers of U.S. origin are cut in Taiwan and laminated onto the boards. The top panel is laminated with a U.S. or Chinese origin (prime) fire-resistant laminate and a Chinese origin sub(secondary)-fire resistant laminate. Both fire-resistant laminate and sub-fire resistant laminate are cut-to-size in Taiwan. In Taiwan, the solid wood and particleboard parts are assembled, painted and fit with Taiwanese-origin hardware. After assembly, the goods are inspected and packed for shipment. Nightstand The nightstand is constructed of a particleboard frame and three drawer units. The drawers’ side, front and back panels are solid wood. The wood of New Zealand or U.S. origin is shipped to China where it is cut-to-size and sent to Taiwan for processing including: further cutting, tenoning, drilling, and sanding. The drawer’s center panels and bottom panels are made from medium-density fiberboard (MDF) of Malaysian origin which is shipped to Taiwan where it is cut-to-size and processed. Certain wood edge bands, upper and middle rails for the drawers, the back frame, connected blocks and thickened blocks are also constructed from solid wood. As with the drawer panels, the wood of New Zealand or U.S. origin is shipped to China where it is cut-to-size and sent to Taiwan for processing. The other major parts of the nightstand, including the top panel, bottom panel, side panels, back panel, middle rail of the drawer, and upper and lower rear rails are made from particleboard. The particle board of Malaysian origin is shipped to Taiwan where it is cut-to-size. All particleboard pieces except for the top panel are then laminated with U.S. veneer that is cut-to-size in Taiwan. The solid and particleboard pieces are assembled and painted in Taiwan. All hardware and paint is of Taiwanese origin. The nightstand is then inspected and packed for shipment. Wardrobe The wardrobe has two large shelves that hang inside. The shelves consist of multiple parts, most of which are made from particleboard of Malaysian origin which is shipped to Taiwan where it is cut-to-shape and processed. The particleboard parts, except for the bottom panel, upper shelf and lower shelf, are then laminated with veneer of U.S. origin and cut-to-size in Taiwan. The bottom panel, upper shelf and lower shelf are laminated with a fire-resistant laminate of U.S. or Chinese origin and cut-to-size in Taiwan. The bottom panel is additionally laminated with a sub-fire resistant laminate of Chinese origin and cut to size in Taiwan. A small portion of the shelf, the connected blocks, rear rails and edge wood bands are solid wood. The solid wood of New Zealand or U.S. origin is shipped to China where it is cut-to-size and then shipped to Taiwan for further processing and assembly. The front bottom line, certain rails, supporting panels and back frames of the wardrobe are also constructed of solid wood cut in China and further processed in Taiwan. The solid wood parts are precision cut, tenoned, drilled, and sanded in Taiwan. In addition to the shelves, the wardrobe’s other parts are also made of particleboard including: the top panel, the side panels, door panel, back panel and bottom panels. As with the shelving, the particleboard of Malaysian origin is shipped to Taiwan where it is cut-to-size and further processed. The boards are laminated with veneer of U.S. origin and cut-to-size in Taiwan. The solid wood and particleboard pieces are assembled and painted in Taiwan. The wardrobe is then inspected and packed for shipment. You submitted photos and specs of the wooden nightstands and the wardrobe. You also submitted a flow chart of the production processes and summary of processing costs and labor hours.  ISSUE: What is the country of origin of the nightstands and the wardrobe? 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 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 United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose 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.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. § 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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 within the meaning of [the marking laws and regulations].” A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See Texas Instruments, Inc. v. United States, 69 C.C.P.A. 142, 681 F.2d 778 (1982). In Carlson Furniture Industries v. United States, 65 Cust. Ct. 474 (1970), the U.S. Customs Court ruled that U.S. operations on imported chair parts constituted a substantial transformation, resulting in the creation of a new article of commerce. After importation, the importer assembled, fitted, and glued the wooden parts together, inserted steel pins into the key joints, cut the legs to length and leveled them, and in some instances, upholstered the chairs and fitted the legs with glides and casters. The court determined that the importer had to perform additional work on the imported chair parts and add materials to create a functional article of commerce. The court found that the operations were substantial in nature, and more than the mere assembly of the parts together. In HQ W563456, dated July 31, 2006, CBP held that certain office chairs assembled in the U.S. were a product of the U.S. for purposes of U.S. government procurement. The office chairs were assembled from seventy U.S. and foreign components. The imported components alone were insufficient to create the finished chairs and substantial additional work and materials were added to the imported components in the U.S. to produce the finished chairs. In finding that the imported parts were substantially transformed in the U.S., CBP stated that the components lost their individual identities when they became part of the chair as a result of the U.S. assembly operations and combination with U.S. components. In HQ 561258, dated April 15, 1999, CBP determined that the assembly of numerous imported workstation components with the U.S.-origin work surface into finished workstations constituted a substantial transformation. CBP held that the imported components lost their identity as leg brackets, drawer units, panels etc. when they were assembled together to form a workstation. In HQ H083693, dated March 23, 2010, CBP held that a certain wood chest assembled in the U.S. was a product of the U.S. for purposes of U.S. government procurement. The wood chest was assembled from over twenty U.S. and foreign components in a twenty-step process which took approximately forty-one minutes. CBP held that the components that were used to manufacture the wood chest, when combined with a U.S. origin laminate top, were substantially transformed as a result of the assembly operations performed in the U.S. In the instant case, solid wood of New Zealand or U.S. origin is shipped to China where it is cut-to-size. The cut parts are then shipped to Taiwan where they are further processed including cutting to precise size, tenoning, drilling, sanding, assembling, and painting. Similarly, plywood, particleboard, and/or fiberboard from Malaysia and veneers from the U.S. are shipped to Taiwan where they are cut-to-size, finished, and laminated. These parts are then integrated with the solid wood parts, fit with hardware and painted to make a finished piece of furniture. Under the described assembly processes, we find that the foreign components lose their individual identities and become integral parts of new articles, the king nightstand, the nightstand, and the wardrobe, possessing a new name, character and use. Based upon the information before us, we find that the components that are used to manufacture the king nightstand, the nightstand, and the wardrobe, are substantially transformed as a result of the assembly operations performed in Taiwan, and that the country of origin of these three products for marking purposes is Taiwan. HOLDING: The imported components that are used to manufacture the king nightstand, the nightstand, and the wardrobe are substantially transformed as a result of the assembly operations performed in Taiwan. As a result, we find that the country of origin of the nightstands and the wardrobe for marking purposes is the Taiwan. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, Monika R. Brenner Chief Valuation & Special Programs Branch