The country of origin of non-prescription reading glasses

N310487 March 18, 2020 MAR-2:OT:RR:NC:N2:212 CATEGORY: Marking Rick Van Arnam Barnes, Richardson & Colburn, LLP 100 William Street New York, NY 10038 RE: The country of origin of non-prescription reading glasses Dear Mr. Van Arnam: In your letter dated March 6, 2020, you requested a country of origin marking ruling on behalf of your client, FGX International, Inc. The merchandise at issue is described as non-prescription reading glasses with frames made of either plastic or metal. In your request, you describe multiple manufacturing scenarios for the subject sunglasses that are detailed in the following paragraphs. The first scenario begins with the importation of empty frames of Chinese origin into the Philippines. Non-prescription reading lenses, also of Chinese origin, are cut and beveled before being placed within the frames to create finished reading glasses. The completed articles are then inspected, cleaned, tagged, and packaged for shipment to their final destination. The second scenario begins with the importation of empty frames of Chinese origin into Vietnam. Non-prescription reading lenses, also of Chinese origin, are cut and beveled before being placed within the frames to create finished reading glasses. The completed articles are then inspected, cleaned, tagged, and packaged for shipment to their final destination. In the third scenario, unassembled frames of Chinese origin, consisting of fronts and temples, are imported into the Philippines where they are assembled into empty frames. Non-prescription reading lenses, also of Chinese origin, are cut and beveled before being placed within the frames to create finished reading glasses. The completed articles are then inspected, cleaned, tagged, and packaged for shipment to their final destination. The fourth and final scenario begins with the importation of unassembled frames of Chinese origin, consisting of fronts and temples, into Vietnam where they are assembled into empty frames. Non-prescription reading lenses, also of Chinese origin, are cut and beveled before being placed within the frames to create finished reading glasses. The completed articles are then inspected, cleaned, tagged, and packaged for shipment to their final destination. 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. The “country of origin” is defined in 19 CFR 134.1(b), in pertinent part, 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 this part.” For tariff purposes, the courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer, the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted, “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. With regard to the country of origin of the subject reading glasses in the first and third scenarios, it is the opinion of this office that the Chinese origin frames and lenses are substantially transformed in the Philippines. The assembly into complete reading glasses renders the constituent items into a new and different article of commerce with a name, character, and use distinct from the imported articles. Based upon the facts presented and the pertinent authorities, it is our opinion that the finished, non-prescription reading glasses are considered products of the Philippines for marking and origin purposes. With regard to the country of origin of the subject reading glasses presented in the second and fourth scenarios, it is the opinion of this office that the Chinese origin frame parts and lenses are substantially transformed in Vietnam. The assembly into complete reading glasses renders the constituent items into a new and different article of commerce with a name, character, and use distinct from the imported articles. Based upon the facts presented and the pertinent authorities, it is our opinion that the finished, non-prescription reading glasses are considered products of Vietnam for marking and origin purposes. Additionally, you request this office to issue a determination as to the applicability of Section 301 trade remedies for the finished reading glasses. As previously noted, a substantial transformation occurs in all scenarios in the Philippines and Vietnam. Therefore, as the origin for marking and 301 trade remedy is not China, Section 301 trade remedies are not applicable. 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 Luke LePage at luke.lepage@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division