THE COUNTRY OF ORIGIN MARKING OF AN UNFINISHED PRECIOUS METAL BRACELET, OF WHICH THE COMPONENTS OF UNITED STATES ORIGIN AND COMPONENTS OF FOREIGN ORIGIN ARE ASSEMBLED TOGETHER IN THE DOMINICAN REPUBLIC.

N299959 August 14, 2018 MAR-2-71:OT:RR:NC:N4:433 CATEGORY: MARKING C.J. Erickson, Esq. Cowan, Liebowitz & Latman, P.C. 114 West 47th Street, 21st Floor New York, NY 10036 RE: THE COUNTRY OF ORIGIN MARKING OF AN UNFINISHED PRECIOUS METAL BRACELET, OF WHICH THE COMPONENTS OF UNITED STATES ORIGIN AND COMPONENTS OF FOREIGN ORIGIN ARE ASSEMBLED TOGETHER IN THE DOMINICAN REPUBLIC. Dear Mr. Erickson: In your letter dated August 8, 2018, on behalf of Tiffany & Co. (Tiffany), you requested a country of origin ruling on an unfinished precious metal bracelet made from jewelry findings of 18 kt. gold of United States origin and jewelry findings of 18 kt. gold of foreign origin sent to the Dominican Republic for assembly, and then returned to the United States for the setting of three diamonds of unknown origin, thereby completing the bracelet. For purposes of this ruling, the Italian origin component will be considered to be made of 18 kt. gold, the same precious metal as the United States components and other foreign components. The merchandise concerned consists of a gold tag of United States origin, gold chain on a spool of United States origin, gold wire on a spool of United States Origin, three gold cased bezels of United States origin, a spring-ring clasp of Italian origin, and four connecting rings made from the United States origin wire in the Dominican Republic. After assembly of the unfinished bracelet in the Dominican Republic, the item will be polished in the Dominican Republic and then returned to the United States for the setting of three diamonds of unknown origin into the gold cased bezels. To understand the country of origin and the country of origin marking of the merchandise concerned an eligibility review under the Dominican Republic-Central America-United States Free Trade Agreement Implementation ACT (DR-CAFTA) is necessary. General Note 29 of the Harmonized Tariff Schedule of the United States (HTSUS) sets forth the rules and requirements of the DR-CAFTA, and provides for the “Change in tariff classification rules” for purposes of originating goods under the DR-CAFTA. I. Originating Good Analysis: The DR-CAFTA was signed on August 5, 2004, and includes as parties the United States, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Costa Rica. The provisions of the DR-CAFTA were adopted by the U.S. in the Dominican Republic Central America Free Trade Agreement Implementation Act, Public Law 109-53 (2005). Pursuant to GN 29 (b), goods are eligible for treatment as an originating good if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the agreement; (ii) the good was produced entirely in the territory of one or more of the parties to the agreement and— (A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or (B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note; and the good satisfies all other applicable requirements of this note; or (iii) the good was produced entirely in the territory of one or more of the parties to the agreement exclusively from originating materials. The imported unfinished precious metal bracelet is not wholly obtained or produced entirely in the territory of the DR-CAFTA countries, as the spring-ring clasp is from Italy. The imported unfinished bracelet is produced and assembled entirely in the DR-CAFTA country of the Dominican Republic. Since the unfinished bracelet under GRI 2 (a) to the HTSUS is classified in subheading 7113.19 of the tariff schedule upon import into the United States, the applicable change in tariff classification rule or tariff shift rule of origin is set forth in GN 29 (n): Chapter 71 – 8: A change to heading 7113 from any other heading, except from heading 7116. In this instance, the spring-ring clasp of Italian origin is classified in heading 7113 with its subheading of 7113.19, and fails to make the required tariff shift rule of origin, in that there is no change to heading 7113 from any other heading, regardless of the exception from heading 7116. Because the cost of the spring-ring clasp of Italian origin appears to be relatively low in relation to purported costs of the components and various labor undertakings, we turn specifically to GN 29 of the DR-CAFTA, note (e) “De minimis amounts of nonoriginating materials” to determine if the nonoriginating materials do not exceed 10 percent of the “adjusted value of the good.” We also note that the purported costs for the gold chain spool and gold wire spool seem to be for the entire spool versus the components necessary to produce the unfinished bracelet. Nevertheless, upon a proper “adjusted value of the good” [study] verifying that the nonoriginating materials do not exceed the 10 percent requirement, the unfinished bracelet will be eligible for the preferential duty rate of free upon import into the United States. II. Country of Origin Marking: Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin 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 of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), “country of origin” means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940). 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, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 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. 85-25. You indicate in your position paper on behalf of Tiffany that the operations in the Dominican Republic involves the cutting of chain, assembling the components and polishing, and therefore should be considered simple assembly, which does not result in a new or different article of commerce. It is your belief that country of origin for the unfinished bracelet assembled in the Dominican Republic is that of the United States. In support of your position that the assembling of the unfinished bracelet from 18 kt. gold chain of United States origin does not result in a new and different article of commerce, you reference Headquarters ruling number HQ 560331 dated December 2, 1997. Of pertinent interest, you extract a small portion from ruling HQ 560331, in which to make a comparison of the bracelets and necklaces of HQ 560331 to the Tiffany’s unfinished bracelet of the merchandise concerned. Because the pieces of the bracelets and necklaces in HQ 560331 were in {final form} prior to assembly in the Dominican Republic, which you suggest is the same condition as the pieces of the unfinished Tiffany bracelet, it is your position that no substantial transformation occurred by means of the assembly process in the Dominican Republic, resulting in the country of origin for the unfinished bracelet being the United States. With emphasis placed, we note within the same ruling of HQ 560331 that “Customs held that cutting or bending materials into defined shapes or patterns suitable for use in making finished articles, as opposed to mere cutting to length or width which does not render the article suitable for a particular use, constitutes a substantial transformation. See HRL 055726 dated September 18, 1979, where a substantial transformation resulted from cutting, bending, and crimping wire into identifiable trigger pins for spring rings.” By observation of the depicted photograph of the Tiffany bracelet, we find that not all of the pieces (jewelry findings) are in final form – the wire is cut to length and bent, and made into three connecting O-rings and one connecting irregular shaped, oval-ring. As such, “the wire is beyond final form absent some minor shaping, grinding or polishing operations,” resulting in the unfinished Tiffany bracelet being more than simply assembled. 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.”] We recognize that the assembly process is not overly complex, which entails the cutting of gold chain into four segments and the soldering of three gold cased bezels to the four segments of gold chain. Yet without the fabrication of the three connecting O-rings and one connecting irregular shaped oval-ring from gold wire, the gold tag could not be attached nor could the gold spring-ring clasp be attached, thus preventing the completion of the unfinished 18 kt. gold Tiffany bracelet. The unfinished Tiffany bracelet is not simply taking continuous gold chain and cutting it to length, affixing three bezel castings and adding four connectors to attach a tag and clasp. The unfinished Tiffany bracelet involves cutting the spooled chain into four segments, soldering three bezels onto the four segments, and with emphasis placed “fabricating” four connectors in which to attach the tag and clasp, thereby completing the unfinished bracelet. Consistent with Carlson Furniture, it is our opinion that additional work was performed on the gold spooled wire of United States origin by means of fabricating in the Dominican Republic four connecting rings, also known as functional jewelry findings. This additional work performed on the United States wire, undertaken in the Dominican Republic is substantial in nature as it relates to the completion of the unfinished Tiffany bracelet and is more than the mere assembly of the parts together. As such, we find that the fabrication of components coupled with assembling of other components, all of which are jewelry findings, in the Dominican Republic to be a substantial transformation producing a new article in the form of an unfinished Tiffany bracelet. Accordingly, the country of origin of the unfinished Tiffany bracelet is that of the Dominican Republic. 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 Neil H. Levy at neil.h.levy@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division